I am a bit confused here. If supply and demand applies to every where, then why it did not apply to your latter case?
It applied-- except the CEO of HDB refused to, and did not need to, meet it. In other words, HDB had holding power, and they simply refused to sell at a lower price. On the other hand, the demand curve at the price HDB was asking was practically nil. That's supply and demand in action all right.
Demand curve can only tell you what the demand is at every price level. It cannot tell you why people refuse to acknowledge reality and refuse to meet demand.
On the other hand, is it just for the garment to acquire land cheaply and later sell it at an astronomical price for public housing purpose?
Actually they're supposed to obtain it at fair prices, and if the owners don't think it's fair, they can appeal and even sue the govt, as some did when LTA acquired the land for the Circle Line.
As to the selling price, I've already explained what I believe their thinking is-- don't sell too far below market.
No doubt HDB flat prices are high (compared to Malaysia)-- but they compare favorably against resale.
Can you explain why public housing is not a basic necessity?
"Housing" is a necessity. "Public" housing is not. Why? Because I think people should not expect the govt to build cheap flats for them. Not any more. Not when most people already have a roof over their heads, you hardly have any homeless people in S'pore, and there's lots of flats in the resale market.
I say again, do you expect that the govt should provide you a cheap HDB flat just because you voted P A P? Maybe that's the expectation in this country, but if you go to US, UK, etc. they don't expect any cheap housing from the govt, those who cannot buy will rent, and the homeless people live in shelters run by NGO's, churches, etc.
Can I say that public transport is also not a basic necessity as well? You can always walk to your destination, right?
Again-- transport is a necessity, but "public" transport is not. Frankly, anyone can provide bus or train services-- the govt or state-owned enterprises are usually not the best parties to do so. It's better for public sector players to provide services and for govt to stick to regulation. Decades of experience show that private sector is better at running services efficiently than govt.
We're really getting into public policy now... lets just say that the times have moved. Deregulation, privatisation are now the way things work. In other words, govt should step back and allow the private sector to do what it does best (which is make things work efficiently) while govt concentrates on what it does best (which is to govern and ensure level playing field).
In other words, if possible govt should not run bus services, train services, phone services, electricity services, etc. These should be (and indeed are being) done by private sector players. In S'pore these private sector players happen to be GLC's, but in other countries, they are really private sector. The govt issues regulations on pricing, regulates the behaviour of the licensees, but as far as possible, does not actually provide the service itself.
I am pointing out that, HBD regulates the market through various means, eg. Controlling the number of unit to be built, when and where to build, in order to maintain the current selling price. Like what you have pointed out, the CEO tries to regulate the market by deciding not to cut price despite there is no demand. The whole market is ineffcient as a result.
HDB influences the market, of course. But does not regulate it. There is a very clear distinction, and you should be careful in your choice of words.
But HDB is not the only player. And in fact, I think they are a lot less powerful than you portray. There is very little their building programmes can influence resale prices, which are mainly in mature estates, as new flats in Sengkang do not compete with resale flats in Marine Parade.
They can of course influence the market through other means, eg policies such as minimum occupation period, loan policies, racial quotas, eligibility for singles, etc. But these have nothing to do with how many flats HDB builds or does not build.
HDB announces how many units it intends to build well in advance, so that the market can be prepared. I don't think they do it to target any particular selling price for new flats. They may hold back their building programme when they think demand is not there. But did you notice private sector players also did the same? A lot of them just built up their land bank in the last few years and held back their launches because of the recession.
I don't agree the market is inefficient. HDB cannot just build X flats a year totally ignoring market conditions, and sell at price Y regardless of market prices. If the market is hot, it should build more than X. If cool, it should build less than X, maybe even zero. That is what any rational private sector developer would do as well. I do not consider that an act of trying to control the market. And such actions by the actors in the market do not make the market inefficient. Indeed, the market would be highly inefficient if the actors all built X units per year, regardless of demand.