Monday, March 11, 2013

Keeping HDB homes affordable

Business Times  |  MARCH 11, 2013
Khaw says any policy change will not drastically impact market

[SINGAPORE] Will the HDB one day return to the policy where public flats can be sold only back to the board?

Such a move is among several the government is looking at in its push to drive down prices of new flats.

Minister for National Development Khaw Boon Wan said that other measures being considered to keep flat prices affordable include lengthening the minimum occupation period and shortening leases.

Mr Khaw cited these as "reasonable" options that will be discussed further to consider their impact on the market.

Speaking at the sidelines of a community event yesterday, Mr Khaw said any policy change will be made carefully so as not to drastically impact the property market.

He also acknowledged that policy changes needed to balance the trade-offs between the differing needs and wants of older homeowners and younger homebuyers.

"What the young want may affect the old. What the old want may affect the young. What homeowners want may not coincide with what homebuyers would prefer and that is the reality of life," he said.

"How do we make sensible trade-offs which are sustainable and not something that is good for five years? You enjoy a honeymoon period of five years, then what? What's worse is when your solutions raise new problems, then I think that's not being responsible."

Mr Khaw declared in the Committee of Supply proceedings in Parliament on Friday that the MND will review housing policies in light of Singapore's significant demographic and economic shifts and "return to basics".

He pledged that his ministry will bring new flat prices down 30 per cent in order to keep public housing affordable. This is on top of what the government has done since 2011 to "delink" new flat prices from that of resale flats by offering varying discounts to first-time buyers.

Said Mr Khaw on Friday: "We have stopped BTO (build-to-order) prices from rising by delinking them from resale prices. We can now pause and see what else we can do to bring BTO prices in non-mature estates to, say, around four years of salary as it was before the current property cycle started."

Current prices of new flats are equivalent to about 5.5 years of salary.

Mr Khaw also said yesterday that the government is open to raising the income ceiling imposed on singles buying HDB flats.

New rules announced on Friday allow single Singaporeans aged 35 and older who earn $5,000 or less to apply for two-room BTO flats in non-mature estates.

However, Mr Khaw said a further adjustment will depend on the subscription rates for the first BTO exercise in July, when singles are allowed to buy a new Housing Board flat.

Martin Koh | 86666 944 | R020968Z
Sherry Tang | 9844 4400 | R020241C

Senior Sales Director
DTZ Property Network Pte Ltd (L3007960A)

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