ELEVENTH PARLIAMENT OF SINGAPORE

(SECOND SESSION)

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WRITTEN ANSWERS TO QUESTIONS FOR ORAL ANSWER

NOT ANSWERED BY 3.00 PM

TUESDAY, 12 JANUARY 2010

9                                                                                                                                                 138

INCREASE IN HOUSING OPTIONS

(Impact on HDB’s Housing Policy)

Mdm Ho Geok Choo: To ask the Minister for National Development in view of the proliferation of housing options and the fact that demand for basic housing has shifted to that of quality housing, how will this impact HDB in terms of policy, eligibility criteria and pricing.

                        Mr Mah Bow Tan:

                        HDB has progressed from the mass production of basic flats in the 70s and 80s to offering many choices across different locations, flat types, designs and prices. This caters not only to rising aspirations, but also to different segments of flat buyers with varying preferences and budgets within the $8,000 income ceiling.  This means that such choices are offered to almost 80% of households in Singapore.

                        HDB remains committed to keeping flats affordable, especially for those setting up their first homes. I am happy to note that about 8 in 10 new flat buyers service their housing loans entirely using CPF monies without any cash outlay. This is possible due to our generous subsidy system. All new flats come with a generous market subsidy.  Households earning less than $5,000 monthly can apply for Additional CPF Housing Grants (AHG) of up to $40,000. HDB also offers concessionary loans to eligible households. First-timers can also enjoy a CPF Housing Grant of up to $40,000 when they buy a resale flat, DBSS flat or EC.

                        The main supply of new flats is the Build-To-Order (BTO) Exercise, where HDB offers generously-subsidised flats for the mass market.  For those with higher income and aspirations, there are premium flats under the Design, Build and Sell Scheme (DBSS), and one-off special projects in mature estates such as the Pinnacle@Duxton. Households earning up to $10,000 per month can buy Executive Condominiums (EC).  Further, a wide range of flats is available in the resale market. For those with specific preferences in terms of location, they may have to pay a premium.

                        While HDB provides many choices, flat buyers must play their part too.  They should exercise prudence and buy within their means. Let me illustrate. A family with monthly household income of $3,000 who spends 30% on housing can buy a flat of up to $250,000.  This covers all the new 3-room flats in HDB’s most recent BTO projects in Choa Chu Kang and Hougang in Jan 10. They also have a selection of the 4-room flats, where prices start at about $230,000. At $4,000 monthly income, a family can afford up to $333,000 without spending more than 30% every month. They can comfortably buy any of the flats offered in the Jan 10 BTO.

                        HDB is committed to ensuring a sufficient supply of new flats. In 2009, HDB sold 13,500 new flats, half of which were launched in the last quarter to meet strong demand. These flats were in a variety of towns, across all flat types from Studio Apartments, 2-room, 3-room, 4-room to 5-room, with 4-room making up the majority. HDB is also building more 2- and 3-room flats to cater to the needs of the lower income, even as it continues to provide for other groups. This year, taking into account the expected demand, flat buyers can look forward to about 12,000 new BTO flats if demand is sustained. These BTO flats will also be supplemented by DBSS flats and ECs.

                        HDB will continue to monitor changing demand and will make necessary changes to the BTO programme, in terms of number and mix, to ensure that there is adequate supply of affordable public housing for the various income groups.