SINGAPORE: Deputy Chair of the National Development Government Parliamentary Committee, Liang Eng Hwa said it’s probably time for HDB to go back to the drawing board and examine the issue of affordability.
Both he and at least one property analyst are waiting for more details of the new housing schemes announced in Parliament on Friday.
More help for first time married couples and singles to meet their housing needs were just some of the measures announced by National Development Minister Khaw Boon Wan in Parliament on Friday.
Mr Liang said the measures take into account feedback given to the government by Members of Parliament (MPs).
He said: "We see action being taken. Minister Khaw Boon Wan has been listening and also discussing with many of our MPs. There will be some safeguards, there will be some rules to go by. But, by and large we should be accommodative to help the singles especially to get flats.
"Many of them, as flat prices go up, they buy from the resale and with higher COV (cash over valuation), it is going to cost them quite a fair bit. And so we should try to assist them especially those in the lower income groups to give them a peace of mind with a home set aside a number, quota for our singles so that they do not have to compete with the many others."
Key executive officer of ERA, Eugene Lim said: "It serves their needs but there will be some who will be asking why not three—room flats. Currently, most of the singles who buy flats in the resale market are buying the three—room flat type, so they are pretty used to the size. Allowing them to buy two—room flats is actually capping the size of the flats they are used to."
Both, however, agree that it’s time to go back to the basics of quality housing at affordable prices.
Mr Liang said: "When public housing started, the main intent was to provide quality housing at affordable prices. This appreciating asset portion was not intended to be. But as the country progressed, with our economic growth and incomes going up and savings going up, the value of the flat has gone up as well and it is a good thing. It does add wealth to our citizens, who do see their valuation go up and the possibility of them to monetise.
"As we see property prices at these kinds of levels and the economic growth that we will see in the next two decades which will be slower and coupled with the demographic changes like the ageing population, the lower fertility rate, more singles, all these do impact public housing going forward including whether it will be appreciating asset.
"The HDB should go back to where it started and look at affordability. We must tackle the affordability part, though flats are still affordable, they are on the upward end of the range of affordability.
"We should look at how we can price our flats so that it can be affordable to Singaporeans, especially for the first time home buyers and come out with different packages or schemes so that the lower income groups are able to buy a flat and raise a family."
Mr Lim said: "The idea is not to bring down the property market prices, the idea is to keep housing affordable and monitor the response of the market and make necessary tweaks to the system.
"For example, is it necessary to cap it at two—room flats for singles or should they also allow them to buy three—room flats which is something they are used to. The adjustment in the BTO ratios increase to 30 per cent only applies to small flats. What about extending it to four—room flats because four—room flat owners are made up of majority families with one or two children, some even have three children. The current policy of applying to three—room flats sort of limits the scope of the policy; no policy is cast in stone we expect after implementation they may tweak the necessary parts they need to do so."
Also described as timely, the plan to impose a quota on non citizens renting HDB flats and rooms to prevent the formation of foreigner enclaves.
Both said the numbers are becoming more visible in some estates causing some unease and discomfort to the residents.
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