Saturday, 23 March 2013

'Cut frills' to keep HDB flat prices down

Instead of copying condos, allow for bigger flat area to plan homes: Ex-HDB chief
By Daryl Chin, The Straits Times, 22 Mar 2013

PUBLIC housing flats can be kept affordable by offering them with minimum frills, rather than by trying to emulate condominiums, a former Housing Board chief said yesterday.

Mr Liu Thai Ker stressed that at the same time, owners should be given as much floor area as possible so that they have more leeway to organise their homes. The 74-year-old, a former HDB chief architect and chief executive officer, said: "The HDB's role is to provide the stage and it's up to the inhabitants to provide the drama."

Mr Liu was speaking to reporters after giving a talk at the Ministry of National Development headquarters covering his 20-year career with the HDB, which he left in 1989 after overseeing the development of 24 new towns and more than half a million HDB homes. In his talk, he added that beauty could still be created by playing around with the proportions and the colours of HDB blocks.

National Development Minister Khaw Boon Wan has promised to bring down the prices of flats in non-mature estates to four times the annual household median income of its applicants. Last year, prices were about 51/2 times the annual household median income.

Among the suggestions floated by Mr Khaw is to have longer occupancy periods for new owners, shorter leases and even selling new flats back to HDB.

During Mr Liu's stint, when flats cost less than three times an applicant's annual income, the HDB matched selling prices to the economy's growth and the income of buyers eligible for public housing.

But as the property market developed, the HDB moved towards a market-based pricing approach which pegs new flats to comparable resale units but with a discount.

To keep new build-to-order flats within reach, Mr Khaw has delinked them from the resale market since taking over the housing portfolio in 2011.

Applauding the move, Mr Liu said the pricing of BTO flats should stand on its own. He added: "If we do this part of the work well, and with timely supply, the resale market will adjust itself."

HDB resale prices have hit record highs, driven by low interest rates and strong demand.

Mr Liu also suggested having a "marginal oversupply" of several hundred units in order to control resale flat prices and ensure demand is being met. Last year, Mr Khaw hinted that he may do just that once the current backlog of demand has been sated, although he added that it might be costly.

Mr Liu added that while doing all this, it was also important to ensure that the Government's finances remained sound. "If the Government is bankrupt, nothing can happen," he said.

Each empty flat is estimated to cost HDB about $10,000 each year in interest and maintenance.


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