Tuesday, 12 March 2013

Govt open to extending singles' housing policy to more people

By Dylan Loh, Channel NewsAsia, 10 Mar 2013

National Development Minister Khaw Boon Wan says the government is open to raising the income ceiling to allow more singles to buy new HDB flats.

But this will depend on how manageable application rates are for the new scheme, which was announced on Friday during the Committee of Supply debate for the Ministry for National Development.

Singaporeans aged 35 and above, who are singles and earn up to S$5,000 a month, can soon apply to buy two-room Build-To-Order (BTO) flats in non-mature estates.

The government is still finalising details of the policy but aims to let the first batch of eligible singles apply in the July BTO launch.

Speaking on the sidelines of a community event on Sunday, Mr Khaw said housing policies need to be gently tweaked before more adjustments are made.

He explained that baby steps are taken so as not to impact the property market drastically.

This goes for building new homes too, and the trick is to determine the correct supply to meet demand.

Mr Khaw said it would not be practical for the government to build 25,000 flats annually, if there are only 15,000 marriages.

Building in excess may also hurt the rental market where some 40,000 HDB flats are being sublet in whole. 

"There are something like 80,000, 90,000 families out there - which is a lot - who are depending on rental income. So they will suffer, for example, if there is a collapse in the rental market," said Mr Khaw.

Mr Khaw said housing policies cannot be toyed around with, like the computer game "SimCity" where players are tasked to develop a virtual city.

"Singapore is not 'SimCity', because if you manipulate wrongly, it hurts people, real people, fellow Singaporeans. Then what? So, I think, let's be a little bit reflective," he said.

Mr Khaw said there is no one perfect housing initiative that will please everybody. The important thing is for Singaporeans to think carefully about the trade-offs between different policies, he said.

In this respect, he hopes citizens will come forward and have a conversation with him, as the government fine-tunes the various steps taken to improve the housing situation in Singapore.

Mr Khaw said it should take around two to four months to gather views from different stakeholders.

While Members of Parliament and the public have offered suggestions, Mr Khaw said it is crucial to determine which of them are workable.

And a key indicator of this is how housing prices are impacted.

Whatever trade-offs are made, they have to be sustainable over the long term, said Mr Khaw.

On the various cooling measures introduced, Mr Khaw said the government is aiming for a "soft-landing" approach, not a sharp correction to the property market.

He said around 40 to 50 per cent of homeowners are still servicing mortgages and a drastic drop in property prices may prompt banks to ask the homeowners to top up loans, causing severe financial problems.

Not true that new housing scheme only appeals to small group: Khaw
By Olivia Siong, Channel NewsAsia, 11 Mar 2013

National Development Minister Khaw Boon Wan has rebutted claims that the new scheme, which allows singles to buy new flats directly from the government, appeals to only a small group of people.

Mr Khaw had announced last week that singles aged 35 and above who earn up to S$5,000 a month will be allowed to apply for two-room Build-to-Order (BTO) flats.

He was responding to a clarification raised by MP for Nee Soon GRC Lee Bee Wah in Parliament.

Ms Lee said she had received feedback from her residents that they might not fall into the 5,000-dollar income ceiling.

Separately, Mr Khaw said he had also received feedback that the new scheme is something that only a few can enjoy.

In response, Mr Khaw said more than 80 per cent of singles aged above 35 earn under S$5,000.

Mr Khaw stressed this is not a small group.

He said it is fair to open up the scheme to this group of singles first, before reviewing the conditions again.

Mr Khaw added if the demand is manageable, he will definitely consider raising the income ceiling.

"If you set too high a salary ceiling, what it means is when you have to ration and through balloting, then it is luck of the draw and you may end up offering units to those who are earning S$10,000, while depriving those who are truly earning S$4,000 or S$3,000, who may need it more badly and have fewer options," explained Mr Khaw.

Mr Khaw added that it is not possible to try and forge a perfect solution in policy making.

He said his approach is to be clear of where the end point is, but to start off cautiously and progressively open up.

This is opposed to opening up in a liberal manner in the beginning, and risk disappointing many at the first stage.

Responding to another point raised by Ms Lee that some might prefer to buy three-room flats so that they can live with their parents, Mr Khaw said he understood the wish.

He added some have also written to him to ask for five-room flats.

But Mr Khaw said his ministry will need to judge the demand for the two-room flats first, before liberalising from there.

As for those who want to stay with their parents, Mr Khaw said they can already apply as a family unit for three, four, or five-room BTO units.

National Development Minister Khaw announces several new housing measures

"On Monday, one lady from Queenstown came all the way to my MPS at Sembawang. She came with her son. She had not slept well since she heard the news that I may stop the resale of HDB flats in the open market, and that all resale would be to HDB only. She wanted to know if she had heard correctly."
Sleepless over possible HDB price reduction

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