Mah Bow Tan
Singapore
“The previous generation of Singaporeans overcame huge odds together to create this improbable nation which we call home. Let this generation work as one to define our country for the next lap of our journey. Sir, on this note, I fully support the amended Motion. Page: 143”
“Like all upgrading programmes, there is a certain budget, and a certain pace at which we will build. We have completed the LUP and now we are going on towards the HIP. The Estate Upgrading Programme (EUP) is ongoing.”
“For those who cannot afford home ownership, we will provide rental flats. For the rest where there is hardship involved, that is where the safety net comes in. I do not think we should make the safety net so wide as to bring in everybody.”
“Building a studio apartment is no different from building any other HDB flat. If a person applies now and the building works start now, he can get it in two-and-a-half years to three years. We have stepped up the building of studio apartments over the last couple of years.”
“Mdm Halimah Yacob asked the Minister for Health (a) how many people have signed an Advance Medical Directive (AMD) and how many have revoked them since; and (b) whether there is a need to review the current rules on AMDs which do not require a person who has revoked the AMD to inform the Registrar, thus causing uncertainty for hospitals t…”
“Parents who wish to exert more control over the maximum mobile service charges incurred by their children may consider service options such as mobile pre-paid cards. IDA is aware of the public's concerns on mobile subscriptions, and will continually review policies and look into measures to further protect the interest of consumers.”
The complete record
Every one of 3,030 lines we hold for Mah Bow Tan, in date order, each linked to its source. Free to read, in full, without an account. Page 6 of 61.
“I wish we could fix the COV problem like the Members are asking for. I think fixing the COV problem is not really fixing the problem. The real issue is whether there are sufficient flats for first-timers who want to buy, whether it is new or resale, ie, the overall demand. On the overall demand for housing, we calculate based on long-term projections: household formations – what is the projected new household formation. We also take into account new arrivals, ie, new immigrants, how many new Singaporeans there are. We also take into account the PRs. We model this on a medium- to long-term basis. As a result, we get a certain base number of flats that we need to build. It ranges from 10,000 to 12,000. But ultimately it is still a projection because there are other factors that come into play for demand: the state of the economy, the liquidity in the market, the jobs situation. I give you an example. Before 2006, between 2000 and 2005, HDB flat prices were languishing. If you took 1999 as the reference point – all the way from 1999 to 2006 – flat prices were below the 1999 level. So, that was the index. Salaries were also languishing but salaries were higher than that. If you take the salaries compared to 1999, they were higher than the 1999 levels. So, affordability was very good. But the demand for flats was low. Why? We had flats waiting for people to buy. I have had people who come to me and say, "I could not buy a flat in 2003, 2004", yet there were many flats available. So, the actual demand for flats is not just a result of an arithmetical computation where you put these numbers in and out comes the demand. The real demand – the people who really book the flats – varies from year to year. So, that is the difficulty.”
“For resale flats, the same applies – if you get a HDB loan for the resale, of course, you enjoy the 90%; if you get a bank loan you enjoy 80%. So, we do not make any distinction when it comes to getting a bank loan. I think this is a prudent thing to do because, by definition, those who go to the bank for loans are usually those who are not able to enjoy HDB loans, either because of income ceiling or because they have enjoyed many HDB loans, or they are PRs.”
“Let me take the second one first because it is counter-intuitive in a way. If we were to say that you can get financing for the COV as well, ie, in addition to the valuation, what will happen? Prices will go up even further. Why? Because what the seller is asking for, really, is what you can afford to pay over and above what the valuation is. So, whatever the valuation is, the buyer is just going to ask for more cash. And the moment we allow for higher cash or we allow for loans to pay for the COV, that is just going to chase prices up even further. So, rather than helping the buyer, by giving him more loans, you are actually not doing him a favour. The Member asked why do we not have valuations which are closer to the actual price. The answer is that there is always a lag because the valuation is always based on transactions. Even if those transactions were done yesterday, there is still a lag and you need those transactions to be able to find out what the valuation is. That is what valuation means. So, once you do that valuation based on transactions yesterday, whatever that number is, the seller says, "I would like Cash-Over-Valuation, who can afford to pay me this?" And that is what will happen. So, we can do all these things, but my point is that this is not going to help. I will ask HDB to study it, but please do not get your hopes up and that this will solve the problem. On LTV for young couples who are buying private property, I am afraid the rules for private property will have to apply to everybody, whether young couples or others. My responsibility is to help young couples who are buying HDB flats for the first time to own their own homes and this is what we will do.”
“So, the Member's wish has been granted. The second point was about valuation – whether we can actually give information faster, monthly instead of quarterly. I think HDB can do that but, frankly, I do not think that will address the crux of the problem. The crux of the problem really is in this kind of market, people are either worried about prices going up and are prepared to pay more or did not buy in the past and therefore now have to buy. In other words, pent-up demand, and also having to pay more. So, that is a real fundamental issue – the supply and demand issue. We can speed up or make the valuation publications more frequent, that is not a problem. But my worry is that that may not address the problem. In fact, when the supply and demand situation becomes more stabilised and as the anxiety about prices going up or about not enough flats, etc, abates, I think that is when the COVs will start to come down.”
“Thank you, Mr Chairman, Sir. I am sorry and I apologise that I have not answered all the Members' questions, so it is good that we have a lot of time for clarifications. I will take each of those points that I have missed, in turn. First of all, Mr Cedric Foo's point about LTV. He mentioned that I have only been able to say "yes" to a few of his suggestions. The good news is that I can tell him that there is "yes" for this suggestion of his. In fact, it is already being done. What do I mean? For young couples who are buying their flats for the first time, there is already a bias towards such young first-timers buying their first flats. We set aside the bulk, 95% of the flats, for them so that they do not have to compete with the second-timers. We also give them additional tickets, additional chances in the draw – two tickets if they are first-timers, another two more if they are near their parents, etc. But, as far as the LTV is concerned, I think he may have had the wrong impression that the reduction of LTV from 90% to 80% applies to these young couples – they do not. The reduction of LTV from 90% to 80% only applies to bank loans, not HDB loans. HDB will continue to give such couples 90%. In addition to that, for young couples – this may not be well known – there is a scheme known as the Staggered Downpayment Scheme, and this applies only to young couples buying for the first time. Under this scheme, instead of paying the 10%, they only need to pay 5% of the deposit upfront in cash or CPF when they book their flats. In other words, they get a 90% loan, they pay 5% in cash or CPF and the remaining 5% will be paid when they collect their keys. They can save up for the remaining 5%. It is like a deferred payment for the 5%.”
“Families may also be referred to transitional shelters run by VWOs, where social workers will work with the families on their underlying social and employment problems. Sir, we recognise that there are families with housing difficulties due to various reasons. Our approach is holistic and pragmatic. We aim to help the families address their underlying problems and to stand on their feet again. We will help these families work towards home ownership, where possible. However, this will also call for hardwork and adjustments on the part of families. For genuinely needy cases who do not have family support and cannot afford their own homes even in the longer term, HDB will help them with a public rental flat. Lift Upgrading Programme (LUP)”
“Others have families whom they can stay with. We need to look at their problems holistically and address the root cause of their housing woes, including referring them to Family Service Centres for counselling on family relationship problems. Interim housing support – while these families work towards their long term housing solution, HDB will also assess how best to address their immediate housing needs. Often, it is in their interest to stay with parents or siblings temporarily if possible, while they build up their finances. Alternatively, they may consider renting a flat or room in the open market. Where families are unable to afford renting a room in the open market, Interim Rental Housing (IRH) could then be offered. Dr Faishal had asked about this. IRH is a temporary shelter let out by managing agents to help families who cannot afford market rent. To keep the rents low, two families will generally share a 3-room flat. Dr Faishal said that some of his constituents in financial difficulties were offered IRH, but were rather reluctant to take up this offer. He mentioned the changes to the routine of these families if they were to take up the IRH. I would like to emphasise that IRH is not meant to be a permanent housing solution. Compared to living in your home, the IRH arrangement is certainly less ideal. It is no different, however, from having to rent a room in the open market, but with the advantage of lower rents in the IRH. Families have to be willing to make some temporary adjustments as they work towards their permanent homes. They may be referred to CDCs and FSCs for help and counselling where necessary. Where possible, the managing agent will take into account the characteristics of families in pairing them.”
“Wherever possible, families should be the first line of support. If they have no family support and are unable to rent from the open market, interim housing options such as Interim Rental Housing (IRH) and Transitional Shelters run by VWOs would then be considered. Within the context of this approach, let me now address the specific comments from Members. Helping with underlying problems – Ms Lim asked for "broader financial assessment for housing loan eligibility" so as to help divorced parents achieve home ownership. However, granting a larger loan is not an appropriate option if families are unable to afford to service the loan. This is not in their interest as it may lead to spiralling debts. Fundamentally, these families need to improve their earning capacity and financial situation first. HDB can help to refer families to the Community Development Councils (CDCs), which can then provide financial assistance, help in job matching and skills upgrading. HDB will help these families to buy a flat when they are financially ready, by providing them a second or even third mortgage loan on a case-by-case basis. For other families, such as the "homeless" mentioned by Mr Low, their housing problems are often also a manifestation of deeper issues, such as unemployment or strained family relationships. HDB has looked into the housing history of those who overstayed at our beaches and parks. Many have enjoyed housing subsidies in the past and sold their flats with sufficient proceeds to buy a new flat or rent one from the open market. More than half of them have other housing options. Some of the "homeless" have even been allocated rental flats by HDB or are already listed as current owners, tenants or occupiers of sold flats, but chose not to stay in them.”
“We will not change the Malay and Chinese limits because the current limits still provide a reasonable margin of flexibility relative to the Chinese and Malay share of public housing. In other words, these will remain at 22% at the neighbourhood level and 25% at the block level for Malays, and 84% and 87% respectively for Chinese. Sir, my Parliamentary Secretary will now address queries on other groups such as divorcees and families in distress. Dr Mohamad Maliki Bin Osman: Mr Chairman, Minister Mah has spoken at length about how HDB caters to the needs of different groups to ensure an inclusive home for Singaporeans. Let me now focus on the specific groups with immediate housing needs as raised by some Members. Mdm Ho Geok Choo and Dr Ahmad Magad asked about help for families who are now unable to afford another flat as they have spent away all the money from the sale of their previous subsidised flat. Ms Sylvia Lim highlighted the housing needs of divorced parents with children, who may be earning only slightly above the $1,500 income ceiling and thus cannot qualify for HDB’s Public Rental Scheme. While Mr Low Thia Khiang called for the Government to support the housing of homeless families. Sir, for all of these groups, their housing woes are often a manifestation of deeper underlying problems, for example, inadequate income or family disputes. Our approach in helping such families is to work with MCYS and Voluntary Welfare Organisations (VWOs) to understand the root of their problems and to then help them to look for a sustainable housing solution for the long term. Wherever possible, HDB will strive to help families work towards home ownership. In the interim, HDB will help the families to identify temporary housing options to meet their immediate needs.”
“Because of our close historical and cultural links. The quota will be applied on top of the Ethnic Integration Policy (EIP). This means that a PR family will have to fulfil both the EIP quota and the new SPR quota. Details will be provided by HDB shortly. Finally, I want to talk about the issue of racial harmony in HDB estates. I think, as Mr Cedric Foo rightly pointed out, the importance of racial harmony cannot be overstated. Mr Foo and Mdm Ho asked if the EIP has been effective in preventing ethnic enclaves. I think the answer is to be found in any of our HDB estates today. We do not see ethnic congregations anywhere. But that is not to say that it will not happen if we do not implement this EIP policy vigorously. We do implement it vigourously. As a result of doing so, some transactions cannot take place because the EIP quota has been reached. We need to work hard to maintain this racial harmony. Although the EIP limits are reviewed periodically, they have not been changed since 1989. In line with demographic shifts since then, we will raise the Indian and Others limit from 10% and 13% at the neighbourhood and block levels respectively, to 12% and 15% – by two percentage points for the block as well as the neighbourhood. The overall proportion of Indian and Others households in public housing has grown over the years to about 10% in 2009, which is pushing at the current neighbourhood limit. That is the reason why we have to tweak the numbers and revise them. This revision will allow the EIP limits to better reflect current demographic situation. Based on HDB's projections, the limits should remain relevant until 2020.”
“And if they buy a new flat from HDB, they will pay $10,000 more on top of HDB's subsidised selling price. 6.15 pm Once the PR converts to citizenship or when they have a Singapore-citizen child, we will return the withheld subsidy. The full $10,000 will be refunded into their CPF accounts if they convert, or if they have a citizen child. These measures will give greater assurance to citizens that they are our priority, and at the same time encourage our permanent residents to view citizenship more favourably. HDB will release further details soon. Mr Cedric Foo, Dr Lim Wee Kiak and Mr Christoper de Souza also raised concerns about foreigner enclaves in HDB estates. Let me say that, currently, this is not a major problem. Last year, PRs made up 14% of our resident population. But PR families owned only 5% of HDB flats. PRs buy flats all over Singapore. However, there are some towns in the western and northern regions where the proportion of PRs owning flats is slightly higher than the national proportion of 5%. As I said, PR enclaves are not a problem today, but we try to look ahead. If we see a trend, we should put precautionary measures in place early. Otherwise, it may be too late when the problem is already there and you have to unravel the problem later. It is also important that PRs integrate well in our local communities as they are long-term residents in Singapore. To prevent enclaves from forming, HDB will introduce a new quota for PR families buying resale flats. PRs will be subject to quotas of 5% and 8% at the neighbourhood and block levels respectively. In other words, a PR family cannot buy a flat if the neighbourhood or block already has 5% or 8% of flats owned by other PR families. This quota will only apply to non-Malaysian PRs. Why?”
“HDB will announce details later. Let me now touch on permanent residents. Mdm Ho Geok Choo, Dr Lim Wee Kiak and Mr Ang Mong Seng all raised questions about PRs buying HDB flats. The first point I want to make is that in the purchase of HDB flats, Singaporeans always come first. PRs can buy HDB flats, resale flats, not new flats. Why? Because they also need a roof over their heads. If we do not allow them to buy resale flats, and if the private property market is out of their reach, they have to rent. When they buy resale flats, they get no subsidies, no grants, no concessionary loans from HDB. They have to go to the banks to get a loan. They have to pay whatever the banks ask of them. Only Singaporeans can get new flats, only Singaporeans can get grants for buying resale flats. But PRs are long-term residents in Singapore. They live, they work, and they study in Singapore. Their experience here is a major factor in whether they take up citizenship and we want them to take up citizenship. My Ministry will adjust our public housing policies to nudge them in this direction. Currently, a PR married to a citizen can enjoy exactly the same housing benefits as Singaporean couples for homeownership flats. To provide an incentive for PRs to take up citizenship, we will withhold $10,000 of the subsidies for citizen/PR households, that means one member is a citizen and one member is a PR, when they buy a HDB flat. This will reinforce the principle that Singaporeans are our priority. What this means is that if such a couple buys a resale flat and is eligible for a CPF Housing Grant, we will hold back $10,000. So if their grant previously was $30,000, it will now be $20,000. If it was $40,000 previously, it will now be $30,000 if they are staying near their parents.”
“But in land-scarce Singapore, I would appeal for their understanding that we need to build these rental flats to meet demand and we need give-and-take in a city like Singapore where land is so scarce, where it is necessary to make space for other groups in our society. I am glad to see that this is a view that is shared both inside and outside the House, as reflected by views expressed by Members as well as by writers, reactions in the media and other forums. Let me now touch on another group of HDB residents and that is the elderly. One of the benefits I have always said about owning a HDB flat is that you have a valuable asset that you can use for your retirement. You have two valuable assets in your old age – your CPF and your HDB flat – and both of them combined together can provide an elderly Singaporean with a comfortable retirement. We introduced the Lease Buyback Scheme (LBS) in March 2009 and this allowed elderly lessees the twin advantage of continuing to live in their flat – because we do know that the elderly do not wish to move if they can – at the same time they receive a lifelong stream of income. Er Lee Bee Wah and Mr Teo Ser Luck asked if LBS is working well and can be expanded. I am glad to announce that we will revise the criteria to allow more elderly lessees to benefit. Lessees who had previously owned 4-room or larger HDB flats can now apply for the LBS. We have excluded these lessees in the past but now we are prepared to include them. We will also allow lessees with an outstanding loan exceeding $5,000 to apply for the LBS, so long as the amount available for the purchase of an Immediate Annuity is at least $60,000. So the relaxation of these two criteria will allow another 3,800 elderly lessees to be eligible for LBS.”
“If you are an elderly retiree with no income, under the old criteria, you could have joined the queue. No questions asked and then when your turn came, you got the flat. If we had continued with that, no amount of new rental flats that we build will be sufficient. Our position is that if you have family support, if you can stay with your families, please do not compete with the truly needy for these flats because they are really for those who have no other housing option. In that particular case where the old lady had a daughter who was willing to take her in, we would say "go and stay with your daughter." The fact that you want to be independent is not a good reason for you to come and ask HDB for a rental flat. For those families who do not or cannot get along, we will refer them to the Family Service Centre to see whether they can provide counselling to make sure that the family can at least try to accommodate one another. In some cases, we do exercise compassion, for example, where there is a history of family violence. On the supply side, HDB is building 7,000 more rental flats over the next three years and this will increase its stock to 50,000. By next year, we should have 20% more rental flats. As a result of this two-pronged approach – increase supply, manage the demand – the waiting time for a rental flat for those who need them has been reduced by 50%, or halved, from 21 months a year ago to 12 months today. But this effort to build more rental flats is not as plain sailing as we would have hoped. Recently, you all know that HDB came under fire from some residents who were unhappy that new rental blocks are springing up in their neighbourhood. I think their concerns are quite real.”
“HDB revised the eligibility criteria last year for the Public Rental Scheme and now, in addition to an income limit, HDB also looks at an applicant's assets and whether he has family support, because income alone is not a sufficient criterion to assess whether that applicant really deserves a rental flat. Mr Lim Biow Chuan suggested that strained family relationships should be considered for rental flat applications. I think he knows the Government's philosophy, which is not just reflected in housing policies but reflected in many other policies as well, is that the family must be the first line of support. It is almost self-evident that if you have a family, if you have children, the family or the children, and not the Government, should provide for the parents, whether it is housing or whether it is financial help if they are able to. So when we look at availability of alternative housing for rental flat applicants, we look at the kind of flats that they own, we look at whether they have rooms available, whether the family or whether the children are capable of looking after the parents. And in many cases, we find children living in 5-room flats, with spare rooms, 4-room flats with spare rooms, even landed property and private property. And in those cases, we say, "Sorry, you cannot join the rental flat queue." I think that is eminently reasonable. Rental flats are heavily subsidised. And that is one of the reasons why the queue is so long. Because we charge $30 or $40 for a flat, and the flat is very comfortable. If you look at the new flats that are being built, they are very, very comfortable, not like the old days. Thirty dollars, a flat of your own, who does not want? Everybody wants to join the queue.”
“I do not know what it is but I am almost certain that there is another part of the story which has not been told, and I would dearly love to hear what the other part of the story is. If the Member could please pass me the details, I will look into that case personally because I do know for a fact that HDB does grant a lot of leeway and forbearance to such hardship cases, particularly when the financial difficulty is through no fault of their own – ie, illness, loss of job, etc. Please be rest assured that the HDB will continue to be the housing authority with a heart. But compassion has to be reciprocated and the other party also needs to do something. I hope Members will help to solve their residents' problems, not just by asking for forbearance but also persuading them to try to come up with a long-term solution. But despite this help that HDB gives, I know for a fact that there will still be families who cannot afford to own their homes and HDB will help those who are in genuine need, with no housing options, by the provision of a subsidised rental flat. Mdm Ho Geok Choo asked if rental flats are going to the truly needy and Mr Teo Ser Luck also asked about supply, and the rental queue. If Members remember last year's COS debate, I announced that HDB will adopt a two-pronged strategy. One, increase supply; and two, manage demand. I also explained that if I just increase supply and not manage demand, the queue is just going to get longer and longer, including some of those cases that various Members have brought up here.”
“And they still refuse to accept offers to solve their problem on a longer-term basis, to rent out a room, to sublet their flat, to add family members to pay for the loan, for spouse to work or for children to work or, ultimately, to downgrade. And when they downgrade, HDB does offer them help with loans. It is not a matter of showing compassion. I think the compassion is already there. There needs to be some reciprocity on the part of the lessee to be willing to make adjustments in their life and lifestyle, and to be able to contribute towards finding a solution. It is not enough just to say, "No, I refuse to move, I don't want to move, I don't want to downgrade, I don't want to do this, I don't want to do that. HDB should just allow me to stay on. Why? Because I am in financial difficulty." Obviously, that is not a tenable solution and that is the reason why HDB had to deal with non-performing loan portfolio of close to 9% at one stage. Today, with all these upstream measures – HLE, credit assessment, etc – as well as downstream measures helping them to right-size, HDB has managed to bring the arrears situation down, as I have mentioned in this House, to something like 7%, which is still very high. Included in this group are many who are caught in very long-term arrears situation. But even as HDB tries to resolve these NPL (non-performing loan) arrears cases, it still exercises a lot of compassion, a lot of forbearance, and I am surprised to hear the case that Er Lee Bee Wah mentioned just now about a terminally-ill person being asked to quit. There is another part of the story somewhere.”
“Sir, earlier, I talked about what HDB does for families looking to set up their first home. Let me now, at this stage of the debate, focus on some of the specific groups, namely, the lower-income, the elderly, and PR issues which Members have raised. Helping people buy their flats is one part of the story. But we all know that after buying, some people run into trouble. I have spoken about the upstream measures that help to manage this problem. Er Lee Bee Wah asked about downgraders and compulsory acquisition and, generally, called for HDB to have a kinder heart. The HDB that I know – and I hope it is the same HDB that Members are familiar and worked with – spares no effort in helping households to find a long-term solution to their arrears problem. Right-sizing their flat is one key solution. I have announced changes to HDB's loan policies to help families do so, and I believe that this will go some way to helping the low-income families, particularly those with financial difficulties, to right-size their homes. Compulsory acquisition only comes into the picture when all other options are exhausted, and households repeatedly ignore HDB's efforts. Sir, I can assure the House that HDB's heart is in the right place. But sometimes I wonder whether they are a little too compassionate, so much so that people do take advantage of HDB's kindness. 6.00 pm I have come across many cases, because all appeal cases come to the Ministry, where residents fall into arrears for years, not months, but years and some as long as three to four years.”
“HDB has the power to compulsorily acquire flats or impose a heavy fine on those found subletting without authorisation. Members of the House, members of the public, if you know of any such cases, you can help HDB by reporting such cases to me. Sir, several Members have asked us to review the one-year Minimum Occupation Period (MOP) for resale of flats bought without subsidies. While there has been an increasing trend of flat owners selling their flats shortly after the MOP, especially those who have bought non-subsidised flats where the MOP is either one or two-and-a-half years, the numbers are not large. Just looking at the numbers, there is a trend and, if the trend continues, buyers who genuinely need housing could be crowded out. To reinforce the principle of owner-occupation and reduce the possibility of speculation, HDB will be raising the MOP for resale of non-subsidised flats from one and two-and-a-half years to three years. This will align the MOP for home owners to resell and fully sublet non-subsidised flats. The extension of MOP will apply to all flats and not just to the larger flats. Sir, the Government has provided high quality public housing for the last 50 years. For the next 50 years, we face new challenges. But I assure Members that we will strive to enable the majority of Singaporeans to meet their housing aspirations, which is to own a home that is comfortable, of good quality and yet affordable. Mr Chairman, Sir, may I take clarifications on these and other housing issues after item (u) instead of at the end of the whole debate while these housing issues are fresh in the minds of Members?”
“In other words, there is no empirical evidence to suggest that PRs are more prone to paying higher COVs or pushing up resale flat prices. 5.30 pm It is the same thing for Private Property Owners (PPOs). They do pay higher COVs in general but their numbers are exceedingly small and not large enough to drive up prices. There is a very populist or common suggestion that we should ban Private Property Owners from buying resale flats. The issue is not just Private Property Owners buying resale flats. What about HDB flat owners buying private properties? Do we also disallow HDB flat owners from upgrading to private property? Surely not. And if we allow HDB flat owners to buy private properties, why do we stop Private Property Owners from buying HDB flats? So long as the owner occupation condition is satisfied–in other words, they must stay in the HDB flat that they can buy. So I urge that we take a longer-term view and do not over-react and do things that we may have to unwind sometime down the road. Although flats are mainly for owner-occupation, we do allow flat owners to sublet their flats if they meet the Minimum Occupation Period (MOP). Currently, the MOP policy allows flat owners to sublet their entire flat after three or five years, depending on whether their flat purchase was subsidised. Of the 682,000 flats that have fulfilled the MOP and are eligible for subletting, only 23,200 or 3% are actually subletted. So the extent of subletting the whole flat is not as prevalent as many would suggest. Most flat owners are really buying flats for occupation, and not for rental. But just to make sure, I have asked HDB to step up enforcement against unauthorised subletting of flats.”
“If we were to say no COV for their flat, how is the seller going to decide who to sell to. Can we force the seller to say you must sell to this person or that person? Obviously not. So the person who comes up with the COV that the seller asks for or close to that gets to buy the flat. That is free market at play – negotiation between willing buyers and willing sellers. If the buyer cannot or does not want to pay the COV, he just walks away. So let us keep the system as it is. Ultimately, as I have said, COVs do not rise indefinitely. They have been zero, they have been negative. Not too long ago, just one year ago, COVs were at zero. Today, on average, they are about $22,000 to $24,000. Will they keep going up? I do not know. Will they come down? I believe so, one day. Mr Hri Kumar asked about subletting, and whether private property owners (PPOs) should be allowed to own flats. The majority of resale flat buyers are citizens who do not own private property. So I do not think we want to go chasing after private property owners. Only those who are eligible get CPF housing grants to buy resale flats. We do not have any evidence that specific buyer groups, like PRs and PPOs, are driving up prices. The median COV paid by PRs has been the same as the overall median COV paid for resale flats for the last two quarters. In other words, PRs are not more cash-rich than other Singaporeans. There are reports of PRs paying high COV but these are the exception, not the rule. *Cols. 3251-3252; 3253-3254 I think Ms Sylvia Lim made mention of this yesterday in one of her interventions. Thirty-seven thousand resale transactions in 2009 – 58 cases had COVs exceeding $70,000. Of these 58 cases, eight cases involved PRs, and the rest of the 50 were Singaporeans.”
“Dr Lim Wee Kiak and Mdm Ho Geok Choo were concerned about high prices and COV levels and they asked what can be done to curb speculation. Mr Masagos Zulkifli also asked about the outcome of our review to curb speculation and whether PRs (Permanent Residents) are driving up flat prices, and how we have dealt with illegal subletting. Sir, I think we have to decide whether we want to control resale flat prices or we do not. If we control HDB resale flat prices, basically we are going back to a regime where we say we will sell it to you at a certain price, and you sell it back to us at a certain price. This is a regime which we had many years ago. There is no capital appreciation, no profit to be enjoyed. The flat is not an asset. Basically, what you are doing is that you are collecting rental upfront, which is akin to a rental scheme. Under the Home Ownership Scheme, where we sell the flat to the resident, we allow the resident to sell the flat after a certain minimum occupation period and to keep that profit or retain that flat until retirement, and then cash out and use the proceeds for retirement. That is the Home Ownership Scheme. That is what makes Singapore's public housing scheme different from any other scheme in the world. And I believe, that, that is the best scheme for Singaporeans. That is the reason why I believe that we should not interfere in the resale market. The moment you interfere in the resale market, and you say that we will ban COV, we will limit COV or we will not allow COV, I think that is the day when we are controlling the market, and that means we will be moving backwards and that will be to the detriment of 800,000 HDB flat owners or more. So, why high COVs? Very simple. Because people are willing and prepared to pay for that particular flat.”
“Therefore, I have decided to remove this upgrading condition for the second concessionary loan. What this means is that in future, both upgraders as well as those who downsize will be eligible for the second HDB loan, with the focus on helping families to right-size their housing choices. I know many Members have been pressing for this for a long time. I hope that their residents will also take that second loan carefully and cautiously. But just in case they do not, to further encourage financial prudence, HDB will reduce the second concessionary loan quantum – by the full CPF balance, and half of the cash proceeds from the sale of the first flat. The household will get to retain at least $25,000 in cash proceeds, and this will give them some cash in hand. Let me illustrate what this means. Look at Chart 8*. Sir, if a couple sell their flat and receive $60,000 in CPF refund and they had $80,000 in cash proceeds, they will need to use their full CPF refund of $60,000 and half of their cash proceeds, in other words, $40,000, to pay for their next flat. HDB would grant them a loan, which is $100,000 less than what they would have got. In this case, the household would retain $40,000 in cash proceeds for their use. Sir, the changes to the second concessionary loan will help Singaporeans right-size to a home that they can sustain over the long term. It will help homebuyers manage their finances for their flat purchases upstream so as to avoid financial difficulties downstream. Let me now talk about Members' concerns on maintaining the owner-occupation status of HDB flats. I want to emphasise that HDB flats are provided primarily for owner-occupation. They are not for speculative profit or rental return.”
“If they did not buy the new 4-room flat in Punggol, they could have chosen from other BTOs or any of the resale flats: a 3-room flat, smaller but better location, in Bukit Merah at $300,000; a 4-room flat in Yishun, which is slightly cheaper; or a 5-room flat in Jurong West, a bigger flat at $370,000. So there are choices – new flats, resale flats, different locations, different sizes, but there are tradeoffs to be made and this is the decision that every flat buyer has to make. Dr Ahmad Magad and Mdm Ho Geok Choo asked about families in difficulty. I think we all know that these are families who have over-stretched themselves. They have bought flats which are bigger than they could have afforded or they have run into financial difficulty in the course of servicing their loans. HDB helps them in many ways – reducing their loans, deferring their loan instalments; in some cases, even offering them another loan to right-size their housing. Mr Cedric Foo and others have been asking whether we can provide loans for those who wanted to downgrade. Some MPs also gave me feedback that by providing that second concessionary loan to households only for upgrading, it may inadvertently drive them to upgrade even though it may be prudent for them not to do so. I have also personally come across cases where in trying to get a second loan so that they can cash out of their flat – because they cannot get a loan when they downgrade – they say they will upgrade, which is not a very wise decision – But given the circumstances, they thought that it was the right thing to do at that time. But we are now seeing a situation of greater economic volatility where the flexibility to right-size becomes more important and we need to maintain that flexibility.”
“It is because we need to cater for this wide variety of buyers who come to us with different aspirations and different budgets. Sir, I just want to assure Mr Lim Biow Chuan that we will continue to build basic flats. Indeed, the bulk of our flats is actually 2-room, 3-room and 4-room flats. But, surprisingly, the ones that are in the greatest demand, ie, the ones where the queue is the longest, are the larger flats – the 4-room and 5-room flats. The 2-room flats, in fact, are undersubscribed. So, any of your residents who want to buy a 2-room flat, can come and see me, and we will give them a flat straightaway. For 3-room flats, similarly, it is just barely even. But the 4-room and 5-room flats, especially, are in the greatest demand. When you come to developments, like the Pinnacle and Dawson there is a huge demand. Very high prices but huge demand. Why? Because it represents the greatest value for money. So, we have to build basic flats and we will continue to build basic flats, but we will also need to build some of the more premium flats, the better designed flats and the DBSS flats. They will not represent the bulk because it constitutes only 10% of the flat supply and they are indeed built by the private developers. When I talk about affordability, I am also talking about buying a flat that is within your means. Buyers must exercise financial prudence. They must carefully consider what they can afford, taking into account their income and other commitments. Look at Mr and Mrs S, the couple I mentioned earlier, who bought a flat at Punggol with a monthly income of $4,500.”
“How has it moved over the last decade? The levels in the last decade hovered between 20% and 21%. So, we have moved from about 20% to 22%, still well within the affordability benchmark of 30% to 35%. In Singapore's case, this 22% figure means that 80% of Singaporean new flat buyers are able to service their housing loans completely through their CPF Ordinary Account without any cash payment because the CPF Ordinary Account is 23% of their salaries. Eighty percent of Singaporeans do not use any cash or any of their take-home pay to service their HDB mortgage loans. I think this is a very significant fact and that is a very real measure of affordability. Let me walk the House through an actual example of a couple. If you look at Chart 6*, this is Mr and Mrs S. They have a monthly income of $4,500. They bought a new 4-room flat in Punggol, priced at $297,900. I quoted this example because I met the couple when I went to HDB to visit the sales counter. They received $10,000 in AHG to offset the price of the flat, so they took a loan of $268,100. This is the 90% loan from HDB at concessionary rate. The monthly instalment came up to $1,073, 24% of their income. They used $1,035 from their CPF to service the instalment and paid $38 in cash. So he belongs to the 20% who had to use some cash to pay for their mortgage loan, but he paid $38. So this, basically, leaves him with the bulk of his take-home pay for other expenses. I want to stress one other point, and that is, when I talk about housing affordability, it is also about how people make choices. I mentioned earlier that HDB builds a wide variety of flats – different sizes, different locations, different designs, different features, etc – from basic 2-room flat in Yishun to the Pinnacle. Why we do this?”
“So this is a very significant additional help given especially to the lower-income to buy their first HDB flats. How do we measure affordability? There are many suggestions and articles written about affordability. What does affordability mean? Many Members here have also expressed their own views about affordability. One generally accepted way is to compare the house price with the income. So if you compare, say, the median house price to the median annual household income, you end up with a housing price-to-income ratio. That is one way of measurement. I am not suggesting that this is the ideal way. But I am just mentioning it as one way. If you take that as one measure, how does Singapore fare? Our house price-to-income ratio is 5.8; in other words, for the price of the house, it takes about 5.8 years to buy one house. In Hong Kong, the corresponding figure is 19.8, it takes you 19.8 years to buy an average house; in London, 7.1. I stress again this is not the only way of measuring affordability. This is a very rough ballpark rule of measuring affordability across disparate cities. Another well-established and a more commonly used benchmark of housing affordability is how much of your household income is spent on your mortgage loan to service your housing mortgage. This is what is known as the Debt-Service Ratio (DSR), which Mr Cedric Foo talked about just now. Generally, financial planners recommend that households should have a DSR of less than 30% or 35%, as a benchmark of affordability. *Cols. 3249-3250; 3251-3252 5.15 pm In the case of new HDB flats in non-mature estates, the average mortgage payment for new flats in non-mature estates sold in 2009 was 22% of monthly household income. In other words, our average DSR for last year was 22%.”
“But, on average, I submit that three years is a reasonable time for somebody to wait for a flat because it is a significant decision in life, whether you are planning for marriage or whether you are buying a flat. It is a very major decision, and it is not something that you do not plan for. Yes, we can shorten it further. But it is not possible nor is it a good idea to have a situation where flats are available straightaway, the moment somebody wants it or flats that are available on the shelf waiting for somebody to walk in and book. Of course, for those who cannot wait, there is the resale market. But, as we all know, the resale market fetches a premium in the form of higher Cash-Over-Valuation. Sir, let me now move on to this other hot topic of affordability, a topic which many Members have spoken about – Mdm Ho Geok Choo, Mr Lim Biow Chuan, Mr Ang Mong Seng, among others. Sir, my assurance again to all Singaporeans is that we will provide sufficient flats that are priced within their reach. In terms of affordability, there is already a very generous housing subsidy framework in place, and this housing subsidy framework is skewed towards the lower-income group. In other words, we give more to those who need the subsidy more. We have a basic CPF Housing Grant of $30,000 or $40,000. On top of that, we have the Additional Housing Grant (AHG) which was introduced in 2006. Members will recall that we enhanced the AHG for a second time last year, extending it to those earning up to $5,000, increasing the maximum grant to $40,000. As at 31st January this year, we have disbursed a total of $330 million in AHG alone, which is a very significant sum. Twenty thousand families have benefited from AHG. Last year, 9,400 families received $176 million in AHG.”
“I think that is going to be an even more unsightly and unwelcome experience for our residents. But I would take up the Member's suggestion to see whether we can reduce the hurdle rate for new BTOs in order to build up some buffer flats. There is already a buffer stock in existence today. This is because we do not wait until it is 100% subscription rate before we start a BTO project. Generally, we start between 60% and 70%. So, if we reduce that further to 50%, that, in essence, builds up a buffer stock along the lines that the Member suggested. And it is because of this that we are able to offer every year, or thereabouts, a stock of flats that are either ready to move in or almost ready to move in. But that cannot be our mainstay, because if that was our mainstay, then we are going back to the time when we tried to anticipate the demand, and we built a large stock. Obviously, when these flats are put up for sale, because they are near completion or because they are in mature estates, the subscription rates for them are much higher than the four, five times that I talked about. So we have to have both the BTO as well as the balance flats for sale as part of our overall sales programme. Three years to get a BTO flat – is that unreasonable? Well, we can shorten it further, as I said, by moving the subscription rate down from 70% to less, and we will examine that. But three years is probably the fastest time frame if you add in the lead time for all the other things to build an average development. Some of the developments can be built faster – the smaller ones, the simpler ones – and some of them will probably need more time.”
“Sir, I can understand flat buyers wanting to get the best flat available, if they can. After all, buying a flat is a major investment. However, they also have to be realistic. The Government is committed to helping Singaporeans own their first homes. But it is not possible to promise every applicant who buys direct from HDB his "choice" flat, at the floor of his choice; at the place of his choice; at the time of his choice; and at the price that he wants. Our land is limited, especially in the mature estates. So is our housing budget, generous as it is. Buyers have to decide on the tradeoffs they want to make – whether they should keep on trying for their "choice" flat, and delay setting up their home, or to settle first for one that is within their budget and move to a better flat when they have built up their finances. Last year, 10,228 Singaporean families bought new flats, of which 8,200 were first-timers. 3,500 of these first-timers bought their flats under the Fiance/Fiancee scheme. They should be able to move into their new homes soon after they get married. Sir, let me address some of the other questions that Members have raised, for example, the issue of lead time – whether the lead time for the supply of new flats can be shortened. As I have explained in this House earlier, it is better for building plans to be based on real demand as shown by the booking of flats. Because if we build ahead of demand, we would end up with a large stock of unsold flats if that demand disappears, which it can. The only way to assure ourselves that this demand is real is when they actually book these flats. By the same token, if we were to pile in advance, we could also end up with idle sites with a lot of piles in the ground.”
“Mr C wrote to me complaining about his lack of success in getting a flat after several tries. HDB checked and found that he had indeed submitted four flat applications, one of which was for a BTO flat in a non-mature estate, the other three were not so. What was even more astonishing was that he had actually been offered flats on three occasions, but he rejected them all. When HDB pointed this out to him, he replied, and I quote: " ... you are right, however, those we are asked to select is not of our choice. So how would one want to proceed when choice units we would like to select is taken?" I was puzzled, so I asked HDB to find out what does he mean by "choice units"? Chart 5* – his first chance was in February 2009, there were 121 flats in Punggol and Sengkang available for his selection. He turned all of them down because he was, and I quote: "targeting the unit in Buangkok which is just opposite to where I am putting up." So he wanted only a flat opposite to where he is currently staying with his parents. In April 2009, he was offered BTO flats in Punggol, which he also rejected, despite having 143 units to choose from, virtually the whole of that project to choose from. His reason was that "the units that are left are those facing the mosque." But HDB tells me that there were actually 118 units remaining that were not facing the mosque. On his third chance in July 2009, there were 14 units available for his selection, in Serangoon, Yishun, Ang Mo Kio, Tampines and Woodlands. Again, he rejected his chance to select, because these were not his "choice" flats. Within a span of six months, he rejected three chances to select a flat, when there were many flats available for his selection.”
“They had all the flats to choose from and one-third of them said, "No, thanks." The results were similar for the most recent selection exercise which has completed first-day selection for all flat types, which is at Boon Lay Meadows. One-third of the applicants dropped out on the first day. This is quite consistent in all the recent BTO launches. When asked for their reasons, the applicants told us that their choice units were taken, or they were considering other housing options – whatever that means. I can only conclude that these applicants were not in urgent need of a flat and preferred to wait for their choice flat. Unfortunately, they do drive up the application rates, and they do create this heightened sense of anxiety. So when you see headlines about four or five times over-subscription, understandably people get concerned. I hope that greater clarity about the situation will help to allay some of these concerns. I have also received appeals from MPs and the public who tell me that they cannot get a flat, despite many attempts. I am sure many Members of this House would have heard similar stories in their MPS. I ask HDB to review all these cases carefully to ensure that our commitment to our first-timer Singaporeans is met. In the last six months, we received 477 such appeals. Twenty-nine cases or 6% of these applicants genuinely did not have a chance to choose a flat in at least two BTO exercises in non-mature estates. We will figure out how to give them more tickets, so that their chances of getting a flat will be much higher. The rest of the appellants were either only interested in flats in the mature estates, which were in short supply, or they had given up one or more chances to select a flat. Let me share a recent case with you.”
“And when we fully build up Punggol, we can consider opening up new areas such as Tengah and Simpang which are the areas marked in yellow on the map. So why this perception that there are not enough flats? Perhaps it is because of the high application rates for recent BTO launches – three times, four times, five, even six times of the flat supply. But these high application rates do not reflect the true demand for flats and I will explain why. First of all, about one-quarter, 22% of the applications for the BTO projects in the last four months are repeat applications. In other words, they apply every month and that is quite all right because we have BTOs every month. Second, and more importantly, I believe that not all applicants are in urgent need of a flat. The true test of the demand is not when they apply for the flat, but when they actually book the flat. *Cols. 3247-3248. 5.00 pm The difference between actual booking and invitation to apply is called the drop-out rate. HDB monitors the drop-out rates for BTO flats. Last year, the overall drop-out rate was close to 50%. In other words, one in two applicants did not book a flat when they were invited to do so. Take the most recent BTO project that completed selection – Fernvale Palms. When Fernvale Palms was launched in October 2009, the application rate was four times the flat supply. But if you look at Chart 3*, by the end of the selection exercise just this week, 44% of first-timers who were invited to select a flat did not do so. They were given the chance, they went, they saw, they said, "No. Thank you. I don't want it." Even when all the flats were available on the first day, 34% of applicants gave up their chance to select a flat.”
“These are the unsold flats that we are able to offer for sale in the Sale of Balance Flats exercise every year. For 2009, we started conservatively with a smaller planned supply of 6,000 BTO flats. Why? Because when we started in January 2009, some people thought that the world was going to collapse. Economies were in disarray, governments all over the world were coming up with very huge rescue packages. Singapore was not spared. Under those circumstances, we decided, "Let us continue to build but build 6,000 flats." But in the second half of last year, 2009, sentiments improved sharply, against all expectations. What did we do? We responded swiftly by increasing BTO supply to 9,000 units and then together with the DBSS and the surplus flats that we had over the previous few years, we offered 13,500 new flats in 2009. Again, not all of them were taken up, and I will explain later. For 2010, we will provide 12,000 new BTO flats or more if there is demand. This is a substantial number. Just to give you an idea of what this means. Clementi and Jurong East – each town has about 23,000 flats. So at the rate we are building, we are going to build another Clementi or another Jurong East in two years' time. HDB will launch at least one BTO project each month for the next few months. In addition, they will be launching new EC sites and also new DBSS sites for sale. So for 2010, I expect that the total flat supply will be in excess of 12,000. Therefore, flat buyers really need not fear that there are not enough flats. These are flats that will be built in various locations, spread out throughout Singapore – be it Sembawang, Punggol, and if you look at Chart 2*, you will see them in Sengkang, Yishun, Woodlands, etc.”
“Recently, my aunt who passed away, left the flat to the cousin. The cousin sold the 4-room flat, and moved to a studio apartment. Sir, that is a typical Singapore story for my generation. Start in a modest flat, work hard, accumulate savings, upgrade. Then if you need to, right size to a smaller flat. But times have changed. Our rapid progress has brought a new generation of HDB flat buyers who start from a different baseline. It is no longer a rental flat or a kampong house. Most probably a 3-, 4- or 5-room flat, or even a landed property. The challenges we are tackling in public housing today is not just about providing a basic simple roof over the head, but also about meeting these rising expectations. Some Singaporeans worry that their children would not be able to afford their own homes. These are the concerns that Members have reflected in this House. I understand these concerns. I hope in the next 30 minutes or so, to allay some of these concerns. Let me start off by addressing the issue of adequacy of housing supply. Mr Cedric Foo and Mdm Cynthia Phua both commented on this. I want to start by giving a very categorical assurance to all Singaporeans, especially young couples buying their homes – their first homes – that the Government is committed to helping you. We will provide enough new flats to meet demand. At the height of the last boom, that is, between 2006 and 2008, HDB offered a total of 36,400 new flats, or an average of about 12,000 flats per year. The actual take-up was 10,400 flats per year on average. In other words, there were 1,000 to 2,000 new flats left unsold every year. And this is at a time when everybody is saying that there are not enough flats.”
“So our housing policies will have to cater to the demands of all these groups, not just one particular group. And that is why we cannot just build the standard flats of the 1960s or the 3-room flats or 4-room flats only, as suggested by the Member, Mr Lim Biow Chuan just now. We need a wide variety of housing to meet the diverse aspirations. From the BTO flats to the DBSS (Design, Build and Sell) flats to the Executive Condominiums, with different features, different sizes and different locations. Through our home ownership policies, growing up in HDB flats is a common Singapore experience for many of us and Mr Hri Kumar's story of his family home that was bought in 1976 is one that I think many of us in one way or another are familiar with. Take my own story. When I was young, I lived in various places with my mother, who was a domestic servant. I lost my father when I was three years old, so we moved around a lot. We stayed in a kampong in Lorong Ah Soo, which today has become HDB flats in Mdm Cynthia Phua’s constituency. Every time I go to visit the flats there, I still remember where that kampong house was. Then we moved to a shophouse in High Street. My mum was working for a High Street merchant at that time. Today, that is where MTI and MOF are. Then we moved to a room in Bugis Street. Today, it is Bugis Junction. There were 10 of us living in that room. We had one bed which slept five. Then we raised the bed, put it on stilts, so that another five of us could sleep underneath. So 10 of us in that room. Then, I moved to Kim Keat Avenue with my aunt and her family – eight of us in a 3-room flat, sharing one toilet and bathroom. My mother stayed in a 1-room rental flat in Whampoa Road. Later, we upgraded to a 4-room flat in Toa Payoh.”
“Mr Chairman, Sir, someone asked me recently whether I was feeling the heat and I do not think he was talking about the weather. Public housing has always been a hot topic, but it is especially hot this year as can be seen by the exceptionally high number of cuts for MND, particularly for housing this year. But I just want to say that I appreciate Members raising these concerns because these are the concerns that people have on the ground and I thank them for this opportunity to respond. As Mr Cedric Foo reminded us just now, HDB celebrates its 50th Anniversary this year. It has been an outstanding half century for HDB. Recently, the international news service, AFP, described HDB as a powerful agency whose projects have taken Singaporeans out of the slums and ghettos that once blighted the island and into multi-storey apartment buildings surrounded by shops, markets, banks, transport links and other essentials. International news agencies are not usually prone to writing good things about Singapore. So I thought this was particularly relevant. The UN and the World Bank have also commended our success in achieving quality public housing but, as Mr Hri Kumar noted just now, with success comes new challenges. And what is the challenge for HDB? Having to house over 80% of the population. Not 10%, not 20%, not even 50% – as in Hong Kong, which is the next highest. 80% of the population means that HDB has to cater to a very broad spectrum of flat applicants, from the low income to the high income. And we are talking about the upper middle-income households. From the young couples, first timer couples, to the elderly, and to the upgraders. From singles to new immigrants and to others.”
“Mr Viswa Sadasivan asked the Minister for Manpower (a) what is the total foreign domestic workers (FDWs) levy collection to-date for 2009; (b) whether the Government will consider using part of the levy for a group medical insurance scheme for FDWs with top-ups from employers to reduce the employers' financial burden; and (c) whether the Government has assessed the impact of the increased minimum medical insurance coverage for FDWs on other national priorities such as encouraging procreation and making it easier for children to care for the ageing parents.”
“The Selective En bloc Redevelopment Scheme (SERS) is part of the Government’s estate renewal strategy for older public housing estates. Under the scheme, residents trade in their old HDB flats for new HDB flats. The land where the old flats are sited can then be freed up for more intensified use. Most of the vacated SERS flats have been demolished. For sites which are not required immediately for new developments, the vacated SERS flats are sometimes put to interim use, such as short-term rental housing. Currently, 2,200 vacated SERS flats or 6% of flats undergoing SERS are leased out to managing agents for short term use. The managing agents can only let out these flats to approved categories of tenants, both Singaporeans and foreigners. These include citizens, PRs, employment pass and S-pass holders. The tenants pay full market rates for these rentals. In addition, some flats in these sites are designated for Interim Rental Housing, which are reserved for Singapore citizens in financial hardship and need temporary accommodation. These flats are offered at below market rates. In short, these vacated flats are being put to good interim use. They help provide short term housing to needy Singaporeans and other approved categories of tenants. FOREIGN DOMESTIC WORKERS LEVY COLLECTION (Use for group medical insurance scheme) 16.”
“In addition, the Building and Construction Authority (BCA) conducts Temporary Occupation Permit (TOP) inspections to ensure that buildings are constructed according to the approved building plans and comply with Building Control Regulations to ensure the safety of occupants. While BCA cannot intervene in private contractual disagreements between buyers and developers, BCA will try to facilitate meetings between the parties concerned to resolve such disputes, as part of its Standard Operating Procedure for good service, whenever it receives such feedback or complaints from home owners. (1) Developers building more than four residential units will need to obtain a Housing Developer's licence from URA BRIC COUNTRIES (Enhancement of bilateral trade) 2. Mdm Ho Geok Choo asked the Minister for Trade and Industry in view of the growing clout of BRIC countries (Brazil, Russia, India and China) (a) how can Singapore enhance bilateral trade with these countries; and (b) whether IE Singapore will increase its number of trade representative offices in these countries and, if so, how many more are being planned and where will they be located.”
“The Government has put in place safeguards under the Housing Developers (Control and Licensing) Act to protect the interests of purchasers who are buying uncompleted private residential properties. Under the Act, developers are required to ensure that no false or misleading information is included in advertisements for their housing projects, including the sales brochures. Licensed developers(1) are required to use the prescribed Option to Purchase, and Sale and Purchase (S & P) Agreement forms in the sale and purchase of the units. These prescribed forms seek to ensure a fair contract in the sale and purchase of the property, and provide an avenue for a purchaser to seek recourse should the developer fail to complete the unit according to the specifications as stated in the S & P Agreement. Licensed developers are also required to build the unit and housing project according to the approved building plans and specifications set out in the S & P Agreement. These include the type of floor tiles, sanitary fittings, cabinets and wardrobes provided in the unit. If there are any defects in the unit or housing project that surface within the 1-year defects liability period provided for in the prescribed S & P Agreement, the purchaser is entitled to require the developer to rectify these defects at no charge. In the event that the developer fails to rectify the defects, the purchaser may follow the procedures set out in the S & P Agreement to claim the cost of rectification works from the stakeholding money held by the Singapore Academy of Law.”
“Mrs Mildred Tan asked the Minister for Manpower (a) to what extent does his Ministry take responsibility for the integration of foreign workers of all levels into the workplaces in Singapore; and (b) whether the workplace provides a good platform for integration to begin and, if so, what is his Ministry doing to promote integration in the workplace.”
“The Government recognises the importance of the local agriculture industry in supplementing our food supply with local produce such as leafy vegetables, fish and eggs. We have set aside over 700 ha of land in six Agrotechnology Parks and more than 500 ha of sea space for fish farming activities. In addition, the Agri-Food and Veterinary Authority (AVA) has established the ornamental fish and plant business clusters, to provide platforms for industry collaboration in areas such as research and development; technology transfer; advisory and extension services; skills upgrading and agri-trade facilitation. Our ornamental fish and orchid industries are renowned worldwide for the quality of their produce. As part of the on-going Concept Plan 2011 review, my Ministry, together with AVA, will identify the longer-term land needs of local farming and exportable agricultural activities such as ornamental fish and orchids. Apart from providing affordable land, AVA also provides support to develop the capabilities of our local agriculture industry. AVA has recently launched a $5 million "Food Fund". Companies can apply for the fund to improve their farming technology and capabilities. In addition, companies can apply to other agencies such as SPRING for various capability upgrading and business financing schemes. Our agriculture industry has also benefited from the assistance and training in areas such as quality and productivity improvements, provided by AVA's Aquaculture Services Centre and the Horticulture Services Centre. AVA will continue to work with the industry to maintain Singapore's competitiveness and market share in the world trade for ornamental fish and plants. INTEGRATION OF FOREIGN WORKERS 39.”
“Most flat buyers are able to select a Build-To-Order (BTO) flat in non-mature estates within two tries. HDB will offer 12,000 new BTO flats in 2010 or more, if there is demand. This will be supplemented by flats built under the Design, Build and Sell Scheme (DBSS) as well as Executive Condominiums. The Government also heavily subsidises the home-ownership programme to ensure that HDB flats remain within the reach of Singaporeans. As a result of these subsidies, 80% of flat buyers today service their mortgage loans entirely with their CPF contributions, without any cash outlay. There are also ample housing options for citizens who are not eligible for HDB flats or choose not to buy one. They can buy resale flats, private property or rent from the open market. FLOODING INCIDENTS (Assistance to affected residents) 5. Mr Christopher de Souza asked the Minister for the Environment and Water Resources (a) what measures are taken to alleviate the incidence and severity of flooding; and (b) what help was provided to residents affected by the flooding incident on 19th November 2009.”
“I think this question is similar to Mdm Cynthia Phua's question just now which I have answered. Just to reiterate the answer, there is no additional time involved in meeting the 75% because once the bookings close – and there is between 70%-75% of bookings – then we will proceed to build. In fact, since we started the system, all, except for one that I remember, the BTO projects actually proceeded. So, this hurdle rate of 70% is not difficult to achieve. On the other hand, it does give us a fairly comfortable assurance that if we proceed to build, there will not be an oversupply. So, the answer is no – there is no additional time and no additional delay involved in meeting the 70% or 75% hurdle rate. INCREASE IN NEW CITIZENS (Population size and ownership of properties) 4. Mr Terry Lee asked the Minister for National Development (a) how many new citizens were added to our population in 2009; (b) how many of them rented homes as compared to those who bought properties; and (c) what type of properties do they own. The Senior Minister of State for National Development (Ms Grace Fu Hai Yien) (for the Minister for National Development): Mr Speaker, according to the latest data released by the National Population Secretariat, there were 20,513 new citizens in 2008. The figure for 2009 is not yet available. The Government does not track the type of properties rented, purchased or owned by new citizens. As a policy, we do not distinguish between indigenous and new citizens. Our commitment in housing is to provide sufficient and affordable flats for first-time Singaporean homebuyers, whether new citizens or otherwise. I wish to reassure the House that HDB continues to uphold this commitment.”
“We can tweak the system, if need be, at the edges, but I do not think we should go back completely to the old system which has its major disadvantages. As to whether the figure of 12,000 is enough, I think I have given assurance to the public many times that if 12,000 flats are not enough, we will continue to roll out BTO projects. That, again, is another advantage of the BTO because that gives us a chance to know whether the genuine demand is there or not. And if there is genuine demand and there is booking, and people are putting down the downpayment and saying, "Yes, I want this flat", then we will continue to roll it out. Unfortunately, the subscription rates that we are getting now – although it appears large – do not seem to indicate that there is such a large pent-up demand, contrary to what many of us think. So, we will have to wait and see. We will keep on rolling out 1,000 or more than 1,000 units a month over the next few months to see whether that demand is being met or not. If the answer is there are not enough flats, we just keep rolling it out. On the other hand, if there is enough demand or more than enough demand, we will be able to scale down the supply accordingly. It is very much responsive to actual demand, and I think that is the advantage of the BTO system. So I think we should keep the system.”
“If I may explain again the BTO system, it gives certainty to both HDB as well as the buyer. In that way, there is much greater sense of what you are getting, when you are getting it, and at what price. In the old system, ie, the Registration for Flats system or the Build-to-Sell system, there was an element of uncertainty. For example, the queue could build up, for example, in the 1990s, to as much as 150,000. I do not know what that queue would be today if we were to implement that system, probably in the same order of magnitude. That creates a lot of uncertainty for both buyers as well as HDB. When HDB sees 150,000 people in the queue and it, at the maximum, builds 20,000 to 25,000 or even at a stretch 30,000 flats a year, you are talking about five years before you can even clear the queue. There is no assurance that by the time you build those flats, the buyers will still be in the queue. And that was, in fact, what happened then. In other words, you are anticipating demand based on the length of the queue and you would not know whether that is genuine demand or not, because there is no commitment to buy. Here, under the BTO system, you build when there is a commitment to buy and, then, there is certainty of time. Granted that three years for some couples may be long – and I think this is the thrust of the Member's question – here we have a way for couples to shortcut that process. A significant number of people are making use of that change in the booking system. In short, I do not think we want to go back to the previous system. In fact, we have improved the system and the BTO system is superior to the other system.”
“I think the Member has a point in that there is a certain time period from booking a flat and before construction starts. The amount of time needed is really for HDB to process the applications and also to press the button in order to start the construction. That time lapse is not very long because usually, after the bookings are made, the contract would be let out. It is not a very significant amount of time. What may lengthen the process is really the number of tries that the person or the couple may be putting in to get that first booking. I mentioned in my reply that under the current rate of rolling out BTO projects – which is once a month – the chances of the person being successful in getting to book a flat is actually very high. In other words, the time taken to book a flat is now considerably shortened. So, if you add that time, in total, you would probably add a couple of months to six months, to the whole process. That is the order of magnitude that we are talking about. Obviously, it varies from project to project and it varies from person to person but on average, that is the order of magnitude.”
“My advice to young flat buyers is to plan ahead and to buy a flat within their means. For those who apply for BTO flats in non-mature estates, the vast majority will be invited to select a flat within two tries.”
“Mr Speaker, Sir, the current Build-To-Order (BTO) system was introduced in 2001. Prior to this, HDB adopted the Registration for Flats System (RFS), which is what the Member refers to as Build-to-Sell. Under the RFS, HDB built flats based on the number of applications in the queue. At the height of the property boom in the mid-90s, there were 150,000 applicants in the queue, and the waiting time for flats was between six and seven years. When the Asian Financial Crisis struck in 1997, the 150,000 applications in the queue dissipated and HDB was left with 31,000 unsold flats. HDB took five years to clear its stock of unsold flats. Having such a large stock of unsold flats is a waste of public money, as many Members in this House pointed out at that time. That is why HDB has decided to build only upon confirmation of demand. Under the BTO system, construction will commence once the majority of the flats in a project are booked and downpayments are made. The time required to construct a typical HDB block takes about three years. This is no different from buying private properties. This certainty of being able to collect the keys to a new flat in three years in fact helps the flat buyers in their planning, and gives them time to save up for their renovation and purchase. To facilitate couples in planning ahead, HDB has introduced the Fiancé/Fiancée Scheme to allow courting couples to apply and book a flat ahead of their marriage. Hence, the couples will have a new home when they are ready to get married. About 30% of first-time flat buyers make use of this scheme currently. For those who prefer to have a flat immediately, the resale market offers a wide range of flats in different locations, but at market prices.”