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.”
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“Currently, our rental flats are priced below 10% of the market value. So one room, on average, in the market is about $400-$500 depending on location. The rental for a subsidised 1-room flat is $30. So it is probably closer to 5% rather than 10% of the market rate. You just do the mathematics. That is the kind of subsidy we are talking about, and it is a substantial subsidy, $20,000, $30,000 over the lifetime. And that is the reason why we say if you have already enjoyed two housing subsidies, you cannot come back for a rental flat because you have enjoyed more than your fair share of the housing subsidies. On his other suggestion, one of the things we could do is to price all our flats at market rate and provide subsidies. You can use that subsidy for your rental flat or you can use it for something else. But is that something that the Member would advocate?”
“On affordability, the debt servicing ratio is calculated based on an average mortgage tenure of about 30 years, because mortgages cannot go beyond the age of 65 years for the mortgagee. HDB will not give you a loan that stretches beyond 65 years because we want to make sure that when you retire, you are not saddled with this housing debt. It is based on a subsidised concessionary loan rate currently set at 2.6%, and on the average price of the flat and your median income. So based on these numbers that I showed, the debt servicing ratio is comfortably below what most financial institutions would regard as affordable for the family. On rate of return – I think the point is not the rate of return per se. The point is really from the time you buy your flat to the time you can unlock the value of the flat, whether there is this store of value that has been created. The track record shows that there is this store of value. It is just like making any other property investment. The longer you hold and if the economy grows, the better will be your return. Of course, if you buy and sell, as some people did in the heydays of the 1990s, you can make a lot of money, but you can also lose a lot of money. So, here we are talking about the HDB flat as a long-term investment. It is not for speculation. It is not for short-term profit. I try to emphasise that many times. I did that again in my speech just now. If you start talking about what is your rate of return, I think you have already started off on a wrong footing. Basically, you own your flat, you have a roof over your head, it is a comfortable roof, it will appreciate in value over time and it will be your nest egg in your old age. Finally, on rental subsidy.”
“Sir, the last I looked, Yishun South is in Yishun town. It has not changed. I do not think. But that does not mean that the rejuvenation of Yishun town means that we will be doing all the lift upgrading for Yishun, we will be putting linkways all over the place for Yishun. As far as the Lift Upgrading Programme is concerned, it is still a programme, it still has to be prioritised across different precincts, different blocks at different constituencies. But please rest assured, your turn will come, soon, I am told. But when it comes to linkways, when residents asked me, "Why isn't there a linkway? How am I going to walk from this block to that block? You know there are linkways from there to there, but here to there, there is no linkway. How am I going to walk?" I asked the resident, "Have you heard of umbrellas? Why not walk from here to there?" I think we have to have a sense of proportion. Yes, we are going to build linkways. But I think we need to build linkways where it makes economic sense. I am not pre-judging the linkway that the Member is asking. I think we will look into that. But, as a general rule, it does not mean that we are going to build, just because we have a linkway policy, linkways criss-crossing the whole of Singapore.”
“Sir, I think in this respect, I have confidence that the HDB housing counsellors will be able to do a good job. It is not an easy job, but I am encouraging them to persist and to carry on. 4.30 pm The other question by Dr Faishal is about land lease structures, whether there are requests by private residential housing developers to have shorter leases. The answer is, "no". We had in fact put one piece of land at 30-year lease, on the reserve list, for developers to indicate interest, so that developers are able to consider other housing forms, for example, retirement homes. So far, that land has not been tendered for. Er Lee Bee Wah: Thank you, Sir. I would like to ask the Minister, does Nee Soon South come under Yishun town or under Ang Mo Kio town. The feedback from my residents is that for the rejuvenation of Yishun town, they do not see many things being done at Nee Soon South. And I would like to urge the Minister to look into bringing forward the lift upgrading for the remaining 35 blocks as well as the linkway, that I mentioned just now, for the seven blocks. The Senior Minister of State also mentioned that the payments for most of the public projects are very prompt. But I would like to bring up that when it comes to settlement of the VOs, I have a lot of feedback from contractors that it takes years to settle the VOs. The other thing is whether the Ministry can look into the downpayment method for the contractors because this has been the practice in some of the bigger projects, for example, Marina Sands.”
“Yes, for housing counsellors, I informed Members that HDB has appointed housing counsellors in all our branch officers. These are existing HDB officers and they have been trained to deal with financial counselling, ie, to deal with cases in financial difficulty. Although they may not be professional financial counsellors, they do have the information and ability to counsel these difficult cases. They have been successful in what they do. In fact, the number of arrears cases has seen a drop in the last year. They have been able, through very patient and painstaking efforts, to work with the individual cases to resolve their financial problems in a more sustainable way. So when I described the various ways that they can help these residents – giving them a loan to downgrade, providing them with temporary interim accommodation where necessary and now providing them even with a new flat but at market rates – all these measures are made known to the counsellors and the counellors in turn would advise the residents accordingly. So they have all the information at their fingertips and they will be able to give the necessary and proper advice to the residents. I have faith that they will be able to do a good job. Many a time, it is not the professional expertise that is required. It is in trying to convince the residents to have a change in their lifestyle. Many a time, when they approach the HDB officer, they are not psychologically and mentally prepared to make that change. And it is difficult change. So the counselling involves not just showing them what they can save from downgrading, but also giving them some time to psychologically prepare themselves.”
“Essentially, our policies on divorced women are quite sympathetic and we have quite a lot cases where divorced women who have custody of children continue to stay in the flat. However, we also have certain situations where they cannot afford to buy over the flat and we have looked at it sympathetically and provided them with a rental flat.”
“My apologies to Ms Eunice Olsen. I missed out on her cut on single mothers. She asked whether our current policy on singles mothers undermines other policies such as home ownership and also being pro-children. I just want to say on this point that the principle underlying our housing policy for single mothers is to be pro-family. That is the major policy imperative. That means HDB flats will only be sold at subsidised rates to those who can form a family nucleus, whether it is a couple or whether it is a couple with children or whether it is parents and grown-up children. Single mothers would be considered under this policy as singles. Under the singles policy, they can form a family nucleus with their parents and they can buy a new flat. If they are over 35, they can buy a resale flat under the Singles Singapore Citizen Scheme and of course, they will be eligible for the singles grant. For young umarried parents below 35 years, what do they do? We encourage them to stay with their parents for mutual care and support. But we all know that in some cases, this is not always possible and we have instances where we have granted exemptions for single parents to actually buy a HDB flat. So exemptions have been made for poor families in difficulties. As for divorced women, although divorced couples do not constitute a family unit, HDB does allow the divorced party, with custody of children to keep their flat. So they are able to retain the matrimonial flat, of course, subject to the usual eligibility conditions. This will help the divorcees who do not have the means to buy another flat to live in the flat.”
“The number of studio apartments that we are going to build, the 1,000 over that we are going to build, will be distributed all over the place. In terms of the types of flats that we are building, definitely, this is going to cater to the elderly because they will have elder-friendly features. They will have, as far as possible, VWOs to look after their needs in the vicinity, either in the block itself or nearby. And to create a more balanced environment, we will be relocating them together with the other flats – the 3-room, 4-room and even 5-room flats. I am not sure I have answered the Member correctly on this. If she has any other questions, I will be happy to clarify later on.”
“Therefore, the rebuilding programme for Punggol 21 was stalled. We have decided to restart that programme in a big way. We have deliberately targeted most new flat developments in Punggol so that there will be a critical mass. That has allowed us to restart the programme as well as to put a whole new dimension to it. So the "plus" in the Punggol 21 Plus programme is actually quite substantial. For each of these genre of estates, the old, the middle-aged as well as the new, there will be something. But as Members all know, there is a limit, in terms of budget and resources, and we simply cannot do everything all at once. But rest assured that we have your estates in mind and we will try to implement those programmes as fast as possible. As far as rental demand is concerned, yes, I think the Member is right. We cannot just keep on building and chasing after demand. Demand for rental flats can be limitless. Who does not want to live in a new rental flat for $25-$30 a month? I think if we did not put new rental eligibility criteria, the demand for rental flats would hit the roof. And all of us, at the meet-the-people sessions, will suddenly find long queues of people wanting to come and apply. So this is the reason why we had to look critically at the situation and find out who are the people that we are building these flats for. And make sure they get them and not have everybody else coming in and joining the queue. That is the reason why we have to change the criteria and not to allow the demand to dictate how much rental flats to be built. For the housing for elderly, I have explained that we are stepping up the building of studio apartments.”
“Sir, my Ministry tries to love everybody equally but some need more love than others. I sympathise with the Member for Boon Lay. I think Boon Lay has more than its share of residents who are in financial difficulties (the lower income). We need to do more to help these people in Boon Lay. I promise her that we will look into it. I cannot promise the Punggol Waterway will stretch all the way from Punggol to Boon Lay, although it is not inconceivable. We might need to build a waterway in Boon Lay from Jurong Lake all the way out to the Straits of Johor. But the fact is that we are progressively, through our estate rejuvenation programme, looking at all the estates in Singapore. We have divided all the estates in Singapore into the old estates, the middle-aged estates and the new estates. The old estates refer to those estates where flats were developed in the 1980s and earlier; the middle-aged estates would be those developed in the mid-1980s; and the new estates would be those in 1990s and later. For each category of estate, we have policies and programmes in place that will benefit the residents. In the case of the older estates, we are going to rejuvenate them through SERS and a whole Estate Rejuvenation Programme. The old places like Queenstown, Redhill, and so on. The middle-aged estate, Yishun, is a classic example. Yishun's flats were mainly built in the 1980s. Those are the flats that we are going to rejuvenate through the HIP and NRP and the Estates Renewal Programme. Punggol 21 is in the category of new estates. The reason we have concentrated on Punggol 21 this time is, as Members know, as Mr Charles Chong said in the House yesterday, in the last recession, the plans for Punggol 21 were stalled. The residents did not move in and demand for flats went down.”
“15 pm So when the Member talks about "love", I think we are really looking at those really in need. We would really love to help them. Everybody who is in the queue who does not deserve a flat is taking the place of somebody else who does. I have 4,500 people in the queue. I look at the list of names. Two-thirds of them actually have reasons not to be in the queue. We love them in many other ways but this is not the way. So we will love them in this way for the rental flat tenants. We will make sure that the rental flat tenants are reserved for them. And indeed, what we are doing now is we are pushing those who are in the queue and who really need help ahead of those who do not need help. I think this is really showing love in the right way.”
“You get $5,000 upfront if you sign, and the rest of the $5,000 will be put into the annuity together with the rest of the money that we will give you for the remaining lease of your flat. And that annuity will then generate a stream of income for you for the rest of your life. In the example that I have cited, somebody could get $5,000 upfront, another $520-$530 for the rest of his life, plus stay where he is and find other ways in addition to that to unlock even more value from his flat. For example, he can still rent out a room in the 3-room flat and keep the additional rental. So this is what I mean when I talk about a life-cycle approach to our housing programme – give generous discounts, give generous subsidies upfront to enable young families to own their flats; provide subsidies, provide upgrading to preserve and maintain the value and even increase the value of the flat. As the economy grows, the flat will grow in value in tandem. All these benefits will be preserved in the flat, unlocked at the end of the day. So it is not just a matter of providing a roof over people's heads. In Hong Kong, the approach is very simple. You need a flat, I will give you a roof over your head, I will rent it to you, and the rental is pretty cheap. But what happens after that? Who looks after the flat after that? I mean, we have been to those flats. We saw BMWs or Mercedes parked in the car parks of rental flats in Hong Kong. Nobody cares because you can carry on and live there for as long as you like. In our case, we have decided that we will have tenancy renewal, we will encourage people to buy, to provide AHG, and so on. In that spirit, we decide that our rental flats will and should be kept as the final safety net for those who are really in need. 4.”
“When you have a flat, first of all, you receive a grant that allows you to own a flat, then you enjoy upgrading subsidies through the course of the life of the flat. Finally, at the end, in your later years, that flat that you own is a substantial store of value. The Department of Statistics did a study recently that suggested the value that is residual in our flats is something like over $100,000. I think it was $120,000. In other words, every Singaporean who owns a flat, on average, has about $120,000 of value stored in his flat. And if we can find a way to unlock that value, that would create a substantial sum of money for him to retire with. And this is where the Lease Buyback Scheme (LBS) comes in. The Lease Buyback Scheme is one way for us to try to unlock some of that value. The Member then asked whether we have spoken to the residents about the sum of $5,000. First of all, when we fashioned this Scheme, we wanted to make it attractive to the elderly low-income. How do we make it attractive? The Government decided that there should be an additional grant, a bonus, for them to sign on to this Scheme. And this sign-on bonus was fixed at $10,000, which is not a small sum of money. So $10,000 is given to somebody who signs on to the Scheme. Then the next thing we ask ourselves is, how much should we give upfront? If we give all of them $10,000 upfront, we are sacrificing downstream income – the monthly income that will be paid to him or her for the rest of his or her life. If we give nothing upfront, the Scheme will not be that attractive. So we decided to go for somewhere in between, ie, $5,000. Should it be $4,000 or should it be $6,000? If you do a survey, I think you will find as many answers as there are people surveyed. We decided to go for $5,000.”
“First of all, on the 90% home ownership. There is no magic number that says we should have 90% home ownership. But the fact is that based on the schemes and the heavy subsidies that we have put in place like the CPF Housing Grant, the additional housing grant and the incomes that our people are able to earn, there is no reason why more than 90% of our citizens cannot enjoy a home-ownership flat. In fact, the pricing of our home-ownership flats is such – as I have demonstrated just now when I showed the numbers – that the 2-room flat, which is priced around $90,000 with the CPF grant and the AHG, is easily affordable to somebody who earns something like $1,200, and that makes it easily readily available to 90% of our population. So there is no magic number that says 90%. But home ownership per se is something that we want to promote. And the reasons for home ownership as opposed to renting a home are very clear cut. Let me give Members the situation in Hong Kong. Hong Kong has about 50% home ownership. The rest of the people in Hong Kong rent their flats. And if you go to Hong Kong and you look at the condition of the rental estates, I think you will agree with me. In fact, the Member has been to Hong Kong – she was in a delegation that was led by my Senior Minister of State that went specially to Hong Kong to look at it – and she has seen for herself the condition of a rental flat versus a home-ownership flat. We do not want that to happen in Singapore. We do not want to have rental flats deteriorate. Why should they take care of their rental flats when they do not belong to them? That is number one. Number two, as I have explained in my reply earlier, a home-ownership flat is a store of value.”
“Sir, let us look beyond the immediate troubles and press on with our efforts to remake Singapore. We have the resources and the resolve. Let us tell the world that we are a resilient people, that we have a resilient economy and Singapore will continue to be a land of opportunity for all.”
“As regards these plans, I refer both to terrestrial as well as marine nature areas. Thirdly, we will invest new resources to build up Singapore as a hub for sustainable development technologies and solutions. And last but not least, all these would not be possible if we do not build up new partnerships with the people and the private sectors so as to promote lifestyle changes to support a higher level of sustainability. The Government will take the lead in sustainable development by setting aside $1 billion over the next five years to implement IMCSD’s recommendations. We believe that early investment in sustainable development will strengthen Singapore’s competitive position as a lively yet livable city in the medium to long term. Sir, in short, notwithstanding the current economic recession, we are taking the opportunity to remake our city. In five to 10 years’ time, we will see a new Singapore. We will have a new city, as plans to transform and rejuvenate our downtown and our heartlands take shape. Singaporeans will enjoy a better quality of life, as our public housing plans, our upgrading plans, our plans for new parks and plans for greater connectivity all start to take shape. We will create new opportunities for both locals as well as global businesses and talents. On Wednesday, during the debate on the Budget, Ms Eunice Olsen asked who are we building or creating this global city for. I think this is a very relevant question. We are striving to be a global city of distinction – a top destination for global businesses to base their operations here. We also want to be a choice location for global talents to come here and to work but, above all, we want to build a city that all Singaporeans can be proud to call home.”
“Apart from the waterway, we are also ramping up housing in the area so that there is a critical mass of at least 20,000 units ready by then. So in 2011, we will be ready to launch the sites for the first commercial development. When the new Town Centre and the Waterway are completed, residents of Punggol 21 will enjoy a first-class waterfront environment quite unique in Singapore. Sir, the transformation of our city goes beyond infrastructure. Dr Faishal asked about the work of the Inter-Ministerial Committee on Sustainable Development (IMCSD). It was set up last year to chart strategies for Singapore’s sustainable development. I am pleased to inform him that we have met up with industry leaders and members of the public. We sought ideas and we have deliberated and are ready to release our recommendations in March this year. So I will not go into the details yet. But I want to say, in general, that the IMCSD’s recommendations will centre on four key areas. First, measures to improve Singapore’s resource efficiency. In particular, we will put in special efforts to promote energy efficient buildings, both new buildings as well as existing buildings. We will encourage energy efficiency among industries and households and greater fuel efficiency in the transport sector. Second, we will implement measures to enhance the livability of our city. More efforts will be made to promote clean transport and enhance connectivity for cyclists and pedestrians. I just want to assure Mr Edwin Khew that we intend to further extend the greenery and protect the rich bio-diversity of our city. We will work with the relevant NGOs, such as the Nature Society and individuals such as Mr Khew, to come up with these plans, and we will announce more details in due course.”
“The next picture shows the Yishun pond which is an area which is abutting the Town Centre, which will be redeveloped into a place for water-based recreation and activities. We will also rejuvenate our older estates through the injection of new flats and residents. Such projects include the DBSS project in Bishan; the waterfront SERS project in Kallang Whampoa; and the new BTO projects in Choa Chu Kang as well as in Woodlands. Now, I come to Mr Liang's question about development plans for middle age towns like Bukit Panjang. Bukit Panjang residents can look forward to the new upgrading programmes, such as the Home Improvement Project (HIP) and Neighbourhood Renewal Programme (NRP). They will soon enjoy new recreational facilities at the Bukit Panjang Sports Complex and Community Hall and also the Dairy Farm Nature Park. Under the NRP, Advisors can engage residents to shape their neigbourhood and the "character" of their town. Next, I refer to Mr Charles Chong’s question about Punggol 21 Plus. I want to assure him that the Government remains totally committed to the Punggol 21 Plus programme. It is not just a rehash of the Punggol 21 plan. There are some very new aspects of the Punggol 21 Plus plan, which were never envisaged, in the original Punggol 21, eg, the contract for the construction of the first 2.4 km of the Punggol Waterway. This is a new park of the Punggol plan. This 2.4 km of the Punggol Waterway will cost $145 million. The contract has just been awarded and announced last week, and is scheduled to complete by end 2010. This will allow the first sale site for a mixed commercial-residential development at the Town Centre to be launched by 2011.”
“And, of course, this is what prompted Mr Liang Eng Hwa just now to also ask what we are doing for Bukit Panjang, which I will come to later on. Sir, at Kallang Riverside, we will also create new infrastructure to open up the area for future waterfront developments. At Paya Lebar Central, the Circle Line, a new Paya Lebar MRT interchange, will be operational in 2010, and the new Geylang Serai Market will be completed this year. I would like to assure Dr Fatimah Lateef that when we finally implement the plans, the heritage and ethnic character of the Paya Lebar and Geylang areas will be preserved in the process of the redevelopment, and we will make sure that she is consulted when we do up these plans. For instance, a new pedestrian mall along Geylang Road will be redeveloped to accommodate more stalls during the annual Hari Raya bazaar. I know this is a very popular Hari Raya gathering place for Singaporeans, not just for people around Geylang but from all over. So we want to make sure that this special aspect of the Geylang Serai area is preserved. At the same time, we will rejuvenate our HDB heartlands. We see here on the slide the upgraded Clementi Town Centre. We have spent $2.4 billion over the last five years on the various upgrading programmes; and will almost double it, with another $4.6 billion, over the next five years. That is a picture of the Ghim Moh MUP (Main Upgrading Programme) and I believe that that garden is now well used. Under the Remaking Our Heartlands (ROH) initiative, we will revitalise the old and middle age towns in a more comprehensive manner. Rejuvenation works for the pilot town, Yishun, have just started. This is a picture of the Yishun Town Centre.”
“By the end of this year, Singaporeans will see Marina Bay take shape as a new premier business location. A new vehicular and pedestrian bridge with a unique double-helix design will link the Bayfront area to Marina Centre. A new Art Park and waterfront promenade, which will loop around Marina Bay, will also be substantially completed. This will create opportunities for not just people living or working in the vicinity but for Singaporeans from all over to come and enjoy Marina Bay. In the next few years, we can look forward to the completion of Gardens by the Bay, along with the Marina Bay Sands Integrated Resort and the Marina Bay Financial Centre. By then, Singapore will have a new downtown, a waterfront hub for business and financial services that can offer an exciting “live-work-play” destination for all. We are also pressing on with the infrastructure development for new regional commercial hubs at Jurong East, Paya Lebar and Kallang that were earmarked for development in the Master Plan 2008. A total of $2.9 billion will be invested to implement essential infrastructure works for the progressive development of these three new growth areas. At the Jurong Lake District, LTA will upgrade the Jurong East MRT station and redevelop the bus interchange to integrate better with the MRT. JTC will expand the International Business Park southwards to cater to increased demand. PUB will transform Jurong Lake to allow more water-based activities. MOH will build the Jurong General Hospital. The Science Centre Board will develop a new science centre – all these in the next few years. So it is not surprising that some property analyst are now saying that prices of HDB flats in Jurong area are increasing faster than in other parts of Singapore.”
“These measures give developers more time to complete their projects, allowing them to reassign their sites, giving them more time to sell the completed units, allowing them to rent out the unsold units, giving them property tax deferrals and, last but not least, granting the 40% property tax rebate. Mr Liang also asked how badly the market is hit by the tightened credit. I think it is not unreasonable to expect that banks will be more prudent in lending under the current tough economic situation. However, I understand that genuine buyers are still able to obtain loans, especially for owner-occupied property, and developers who have good collaterals and track records can still obtain financing for their projects. In fact, several of the REITS have recently announced that they are able to obtain financing to roll over their debts. These new measures announced in the Budget are aimed at helping developers ease their cashflow and give them more flexibility, so that they can stretch out the development as well as the sale of their developments in accordance with market conditions. However, I just want to assure Members that MND and other relevant agencies will continue to monitor the property market closely, and we will implement more measures, if necessary, to lend stability to the market. 3.00 pm Sir, let me just say that this is not all gloom and doom. While we tackle the current challenges, we must not forget that our economic fundamentals remain strong, and we should continue to position Singapore so as to seize new opportunities when the upturn comes. The Government will therefore press on with the long-term development plans to build Singapore as a vibrant global city, and an endearing home for Singaporeans.”
“Mr Chairman, Mr Liang Eng Hwa asked what could be done to address the weak property market. The property market is inextricably linked to the economy as a whole. It saw phenomenal growth in 2007 in tandem with the strong economic growth then. Now, with the current economic downturn, the market has similarly corrected. The Government cannot artificially prop up prices, in as much as we cannot suppress prices in a bull market. But we can seek to achieve several objectives, two, in particular. First, we want to ensure that the property market is efficient and functions well. In other words, property prices move more or less in tandem with economic fundamentals. We want to prevent excessive swings in the property market as this would have serious ramifications on home ownership, asset prices, retirement savings and other sectors of the economy. Second, we want to help businesses in the real estate sector ride through this difficult period. The Government has already acted very swiftly. First, we have suspended the Confirmed List of the Government Land Sales (GLS) Programme for 1st half 2009, this was last year when we made that decision. And we have also made sites available via the Reserve List only. This allows the market to decide how much supply is released to meet real demand. Second, URA has released more real estate data to enhance market transparency, so that all market players – buyers, sellers, developers, finance industry and Government agencies – are aware of what is the real situation and will act accordingly. Third, we have introduced new measures in this Budget to ease the cash-flow of developers and give them more flexibility to stage the sale and construction of their developments in accordance with market conditions.”
“But HDB will ensure that the lessee has a viable housing option, including a rental flat, if necessary. So for those who fall into financial difficulty, HDB will spare no effort to help them work towards a financially sustainable housing solution, particularly, help them downgrade to a more affordable flat with another loan. Downgrading is a tough decision. It requires adjustment to lifestyle, even with some discomfort. But, ultimately, it is in the best interest of the family as it allows them to get a fresh start to rebuild and recover from their financial setback. I want to end by highlighting a family which made such a decision. Mdm Tan Suay Yan was in this predicament and took the advice after quite a long consultation process. She wrote a letter to Zaobao to explain her experience and gave some good advice. Her husband lost his job and the family started to accumulate arrears. They downgraded to a flat that HDB found for them. They cleared their arrears and their financial situation today is much improved. In her letter to Zaobao, she used the term "ku kou po xin", in other words, the HDB officers patiently and painstakingly gave them advice. She also urged those who are in financial woes to "jiao ta shi di, liang ru wei chu ", in other words, be realistic, spend within your means. So this is indeed what I urge loan mortgagors to do if they find themselves in financial difficulty. Do the right thing and we will help them and support them every step of the way. HDB Rental Flats”
“We want them to sleep easily and soundly at night, with a roof over their heads without having to worry about financial problems. No effort will be spared. Last year, HDB officers made more than 60,000 house visits on arrears-related matters and conducted over 35,000 interviews and financial counselling sessions. I have asked for these figures because I have been pressing HDB to do more and they tell me that all their officers have been harnessed for this effort. I have had to encourage them and explain to them why it is important for us to do so, even though it is a lot more work. A lot of these interviews and counselling sessions have to be conducted even outside office hours because sometimes, flat owners are not at home during the day. But they must press on because if they do not, the problems facing these households will accumulate and become worse over time. But despite our best efforts, some households are still not prepared to face up to the reality of their circumstances. Today, there are more than 15,000 HDB loan cases that are in arrears for over a year. Some deliberately ignore HDB's frequent calls and house visits. Whilst HDB has exercised patience, at some point, a line must be drawn. If the lessee remains unmoved, HDB has no choice but to issue a notice to acquire the flat. Otherwise, his debts may spiral to the point of negative equity. This would be even worse for the flat owner. Even when HDB issues a notice of compulsory acquisition, it is still with the intent and hope that the lessee comes to realise the seriousness of his situation. And if he is serious about selling his flat without any more delay, HDB may withdraw the compulsory acquisition notice. Otherwise, they may have to proceed.”
“HDB will also make available some of HDB's unsold stock of lower cost flats to these cases in financial difficulty. HDB has some stock of low-cost flats that were built in the early years that are still available and these can be sold to some of these households who are in severe financial difficulty. I want to stress that these are special measures for exceptional cases of financial difficulties. Finally, we recognise that some households in difficulty may need temporary accommodation as they downgrade from their current flat. Some may be waiting for their new two-room flat to be completed. To tide them over this period, HDB will refer deserving cases to its managing agent for a temporary rental of a room at below market rate. Sir, by helping families to right-size their flats, we allow them to remain as homeowners. But for those in financial difficulty, who cannot afford a smaller flat in spite of our help, HDB will consider allocating a rental flat to them if they have no other housing options. To make sure that families in financial difficulty are given proper advice, HDB has deployed special housing counsellors at every HDB branch office. The job of these housing counsellors is to look at each and every case holistically and comprehensively. So, when we talk about a sustainable solution, we are talking about painstakingly going through each and every case, making sure that they know what are options available, working out the sums. Having available those options at their disposal, HDB will be able to guide them and direct them to the right solution. This is a very complex and painstaking task as I have said. But I have asked HDB to press on because we want homeowners to find a viable long-term solution.”
“We will do him more harm in the long run by storing up more problems for the future. That is why HDB has shifted the focus from giving short-term relief to helping our arrear cases find longer-term sustainable solutions. To do this, we also need individual households to be realistic and prepared to make tough but necessary adjustments. For some, such adjustment entails subletting a room or even the whole flat, where circumstances permit. In many other cases, the most viable solution is for the household to right-size their flat and reduce their loan by downgrading. So HDB will help households in financial difficulty to downgrade. They will facilitate this process. 2.00 pm First, we will provide them with an additional loan. Mr Charles Chong, Mr Teo Ser Luck, Mr Baey Yam Keng and many others have called for HDB to give downgrading loans. HDB generally will not provide another loan to downgraders because usually they have enough proceeds from the sale of their larger flat. But for those who need help in this difficult time, HDB will be flexible and will help them with another loan to buy a smaller flat. So there is no overall change in policy, but recognising the situation, HDB will be more flexible for such things. De facto, those who are in difficulty and want to downgrade will be able to get another HDB loan. Second, HDB will make available low-cost flats where necessary to help those in need to downgrade. This is what Dr Army Khor requested for just now. This is a small vulnerable group and HDB will help them source for affordable resale flats. If need be, HDB will also directly purchase flats from the open market to sell it to them. In this way, these households do not need to pay any Cash-over-value (CoV) valuation or the HDB resale levy.”
“Mr Chairman, Sir, Members have asked how my Ministry intends to help those home owners who are facing financial difficulties during this time. Let me explain what we have done and will be doing. Firstly, as a short-term assistance measure, if households show that their income has been affected because of retrenchment or a wage reduction, HDB will temporarily reduce or even defer their loan repayments for up to six months. This gives them time to make adjustments to their lifestyles and consider longer-term options. However, reducing the loan repayment cannot be a solution in itself, especially in cases where the poor financial situation is likely to persist. The longer we stretch the reduced repayments, the more the interest accumulates. More seriously, households may be lulled into a false sense of financial security, and reduce their resolve to settle their financial problems decisively. I am not talking about hypothetical situations here. In the last economic slowdown in 2003/2004, if you look at all the arrear cases, HDB allowed very long periods of reduced repayments. Today, what we have in the files are some 6,500 households in arrears who were granted periods of reduced or deferred repayments that accumulated to more than two years. Some of them are owing three to four years in arrears. We have hoped that by giving them more time, they would be better able to resolve their financial problems. Instead, they remain unable to service their loans and they are not nearer to a sustainable solution. In fact, their circumstances have worsened significantly, and their arrears have gone up. This is a salutary lesson for us. If a patient needs surgery to get well, we cannot just keep on giving him painkillers.”
“And we are going to support home ownership through enhanced AHG. We are going to build more lower-price flats, and we will also introduce the LBS to offer more monetisation options for the elderly. But I emphasise these are not short-term measures that are reacting to the current situation. These are actually long-term solutions designed to help Singaporeans in need while we strengthen the social security framework, so that people not only do not have to worry about a roof over their heads but they will also have security in their old age. So I just want to reiterate my note of caution – because I feel this is something that is not emphasised enough – that when flat buyers buy their flats, they must be prudent in their financial planning. As Mr Liang pointed out, the generous subsidies that are given by Government may encourage some people to cash out too early. These subsidies are meant to help our citizens build their nest egg for their golden years. They should not be treated as a windfall to be used or consumed prematurely or spent. But despite our best efforts, I grant that some Singaporeans will still fall into financial difficulties especially in these tough times, and I will elaborate on how we can help this group later on. Flat Owners in Financial Difficulties”
“And I would like to urge advisers, Members of this House, to explain this scheme to their residents, and I would ask HDB to work with the advisers to provide more details of the scheme especially to their senior citizens, so that more of them will be able to take advantage of the LBS. A few Members have asked whether we can extend this scheme to other lessees, eg, 4-room flat lessees or larger flats. My response to them would be this: let us wait until we roll out this scheme for the 3-roomers and below and, say, after six months or a year, gauge the response, get the feedback from the public, and then we will decide. But I am open to the idea of extending this scheme to others if there is a good demand for it. Let me now talk about studio apartments. I think Dr Faishal mentioned studio apartments as a good and popular option. It is a popular option because all the studio apartments that we have built have been taken up. So we will build more. Over the next two years, we are going to build 1,000 more studio apartments, and we will build them in various parts of Singapore. As Mr Baey mentioned, we are going to build them in non-matured towns, eg, Chua Chu Kang and Woodlands. We are going to make sure that there is a good social mix of studio apartments with other types of flats, so that there is a good ambience and community being built around them. So he might want to encourage some of his constituents to sign on to the studio apartments in places like Woodlands, Chua Chu Kang, Tampines or other places, and not just in Queenstown or Bukit Merah. All of these options will help our senior citizens and our people to monetise their flats. In these difficult times, we will commit to making sure that housing remains a key pillar of our Home Ownership Programme.”
“After he receives his first LBS ang pow of $5,000, he will continue to get monthly payouts of about $530 for life. $5,000 cash upfront and $530 for life, and he remains where he is. He can do whatever he likes. He can rent out an extra room. He can move. He can rent out one or two rooms and keep the cash. And on top of that, he has the CPF LIFE. Mr Masagos and Dr Faishal asked what will happen should an LBS applicant pass away before the end of the 30-year lease. If such an unfortunate event happens, his wife or child will be given the option of either staying in the flat for the rest of the 30 years, or getting a refund of the remaining flat lease. Further, they will be given the full refund of the undrawn premium from the annuity plan. Let me elaborate. For example, if $100,000 was used from the sale of the flat to purchase the annuity plan, and the lessee passes away after receiving $10,000, his estate will be given the remaining $90,000, so he will not lose any of the annuity that is unused. And if the applicant lives a very long life – that is a very good and happy situation – the annuity will keep paying him for every month of his life even beyond 30 years, even after he has exhausted the 30-year annuity plan. For those who live beyond the 30 years of the flat lease, we will guarantee them a roof over their head thereafter. We will look at individual cases. If there is a need and a possibility to extend the lease, we will do so. If not, we will find them an alternative accommodation. 1.45 pm Sir, the LBS will increase the housing and monetisation options available to our elderly lessees. I strongly urge eligible flat lessees to sign on to this scheme. It is a good and generous scheme.”
“But, ultimately, flat buyers and flat owners need to exercise financial prudence and live according to their means. Now let me turn to the Lease Buyback Scheme (LBS). Many Members have asked about it. The LBS follows upon what I said earlier. If owners hold on to their flat for the long term, they will be in a position to unlock the value of their flats when they grow old. Some Members – Mr Charles Chong, Mr Masagos, Dr Faishal and Mdm Ho Geok Choo, among others – have asked for more details of the LBS. I am happy to announce and inform them that we have finalised the details with all the relevant parties and we are ready to kick off the LBS with effect from 1st March this year. We will be having a major launch for this purpose and we will involve all the advisers, especially those who have larger numbers of senior citizens in their constituency in this exercise. The LBS is one of our key initiatives to facilitate flat monetisation by the elderly. It targets those who own smaller flats, 2-room and 3-room flats, who have enjoyed not more than one housing subsidy. It is another subsidised scheme because the Government will be providing a $10,000 grant to anyone who signs on this scheme. Under the LBS, HDB will buy back the remaining flat lease, less the first 30 years. In other words, if there is a 70-year lease remaining, we will buy back 40 years and leave the first 30 years. In return, the lessee gets a $5,000 upfront sign-on bonus and a lifetime income stream from a CPF annuity plan. $5,000 upfront plus income for life. So, if I take an example of a 62-year-old male lessee of a 3-room flat with a typical resale price of $236,000. Under the LBS, he gets to stay on in the same flat albeit with a reduced lease of 30 years.”
“But I want to take this opportunity to remind flat buyers to exercise financial discipline and prudence. My advice to young families is this – start with the right flat, one that is within your means, and upgrade only if you can afford it and when needed. I agree with Mr Liang Eng Hwa that home owners should hold on to their flats and not cash out too often, too soon. We do see, many times, families selling their flats for a good profit, use up their cash proceeds, run into difficulties servicing the mortgage payments for the larger flat that they have purchased. These are some of the examples, I think, all of us as Members of Parliament see in our MPS. I want to stress that HDB flats are for the long term. They are not for speculation. They are not for quick profit. Those who have bought subsidised HDB flats are required to live in their flats for at least five years before they can sell in the open market. This helps to guard against speculation. The CPF Housing Grant and the AHG that I spoke about earlier, must be refunded into buyers' CPF accounts when the flats are sold, to ensure that flat owners do not cash out their subsidies too soon. HDB has also put in place measures to ensure that buyers do not over-stretch themselves when purchasing flats. They do credit assessment. They require a HDB Loan Eligibility (HLE) letter so that people know exactly how much loan they can get, before they commit to a flat purchase. This may seem quite self-evident that you find out how much you can borrow before you buy a flat, but you will be surprised how many flat buyers buy a flat without knowing how much loan they can get. And this is why we had to implement the HLE.”
“The AHG also has a "two-year continuous work" condition. This is to make sure that flat buyers have the ability to sustain their mortgage payments. HDB will reduce this work condition to one year. In other words, it will be easier for applicants to now qualify for the AHG. With these enhancements, we have doubled the amount that the lowest- income families receive, from $20,000 in 2006, when we implemented the AHG, to $40,000 today. So in two years, we have doubled it. We have also doubled the number of families benefiting from the AHG from about 4,000 in 2006 to now, about 8,000 per year. Let me give some specific examples of how the AHG works. If you take a young couple earning $1,500 a month, buying a new two-room flat with the average price of about $90,000. With the AHG of $40,000, they will need a loan of about $50,000. To repay that loan of $50,000 will cost them $200 a month or 13% of income. In other words, all of these repayments can be made through their CPF. No cash involved. If we take another case of a family buying a four-room flat, say, middle-income family with $4,000 household income. They buy a resale 4-room flat at $315,000 near their parents, so they get a CPF Housing Grant of $40,000, and with the added AHG of $15,000, the loan will be about $260,000. The monthly instalment will be $1,041. This is 26% of their household income. 23% of that will come from their CPF. They need to come up with $121 in cash – 4% of their monthly take-home pay. So, this is how we will incentivise and we will help low-income and even middle-income families to own their own homes. With the above policy adjustments, families will get significant extra help to buy their first homes.”
“I have received quite a few complaints or cases from Members of this House, complaining about the issue of their residents not getting a flat. The first question I asked them is to get me the details, let me know who is the person and I will check. Most of the cases that I have checked, have been cases where the applicants have been offered but they have not selected a flat. I have often gone back to Members with full details so that they can then approach their residents to further clarify why is it that they did not select a flat. So the point I am trying to make is, there are new flats available. Not all flats will be available in mature estates because we do not have the land for this. Not all flats will be available immediately for occupation, but, certainly, there will be flats available, although it may not be in an estate, or on a floor of their choice. And certainly, we will make such flats available in more estates, and in a speedier manner with a wider selection over time. Let me now move on to the issue about Additional Housing Grant (AHG). I think all Members accept and realise that we need to incentivise young couples and low-income families to buy their first homes, and the Government will give them more help to do so, especially in these difficult times. We introduced the AHG in 2006 for this particular purpose – to give the low-income an extra leg-up in owning their flats. In 2007, we enhanced this scheme and this year, we are going to do even more. How will we enhance the scheme? The maximum AHG amount for those earning less than $1,500 monthly will be increased by $10,000 to $40,000. In addition, to help not only the low-income, but also middle-income families, we will raise the income ceiling for the AHG from $4,000 to $5,000.”
“And it is not unexpected that when HDB ballots these flats, the number of applicants is in the thousands, when the flats available are in the hundreds. So as a result, the chances of applicants getting a flat successfully in these ballots are very low. And these are the ones who always come back to us and say, " I have balloted many times and I cannot get a flat". But, that is not the only way HDB sells flats. In fact, HDB sells the bulk of its flats under the BTO scheme, which is a demand-responsive scheme. In other words, applicants apply for a flat and they indicate that they want to buy the flat, then HDB builds. So from the time you buy until the time you get your flat, typically, it is about three years, which is about the time you usually wait for a new private property in any case. All the BTO exercises that HDB has conducted in recent months have been undersubscribed. In other words, there are more than enough new flats supply from the BTO exercises to cater to the demand. Just to give you an example, there were two BTO selection exercises that were recently completed, one was called Fernvale Residence and the other one was called Punggol Breeze. Both of these are in Punggol. After all the applicants were asked to select their flats, there were still about 200 flats left for sale. Some of those who were asked to select the flats actually did not select the flats, even though there were many flats available. We do not know why they did not select a flat. There are many good reasons, but if any of those residents were to come back and say that they could not get a flat, the first question to ask them is whether they have actually been offered but have not selected.”
“This does not mean to say that a person with a median income of $1,200 buying a 5-room flat will not have a problem of affordability. This is why HDB builds a whole range of flats, which will cater to different income groups. 1.30 pm Apart from affordability, we also need to worry about the supply of flats. And many Members have asked about supply of flats. Mr Charles Chong, Dr Lim Wee Kiak, Er Lee Bee Wah, among others, asked whether HDB will offer more lower-priced flats, especially during this economic downturn. The answer is "yes". For the first half of 2009, HDB plans to launch about 3,000 flats for sale, out of which half or 1,400 will either be studio apartments, two-room and three-room flats. The basic no-frills flats, as Er Lee Bee Wah would call them. Over the next two years, there will be about 2,000 such smaller flats launched each year. We will increase the supply of smaller and lower-priced flats further, if necessary, if the demand for such flats goes up. Another common question raised by Members in this House – Mr Charles Chong, Dr Lim Wee Kiak and Dr Amy Khor – is about residents who have complained about not being able to get HDB flats. They have balloted unsuccessfully, many times, especially in mature estates, or as Dr Amy Khor mentioned, "even in the ulu estates". Let me elaborate a little on this. HDB sells flats in two ways. One is through the balloting exercise, and one is through the BTO exercise. In the balloting exercise, the flats that are offered are those that are surplus flats after SERS-affected residents have selected their flats. So they are limited in number. They are in mature estates. They are very popular for these reasons.”
“In some countries, this measure is also used to measure how much rental they spend out of their total household income. So whether it is rental or whether it is mortgage payments, 30% or below is the benchmark to measure affordability. So what is the situation in Singapore for HDB flats? In 2008, the DSR for purchases of new HDB flats was 21% overall, well within the affordability benchmark of 30%. In other words, households use 21% of their total household income to pay for housing. Let me give you a little bit more detail about this. I show you a chart which shows the average DSRs for different flat types, based on the median income of actual applicants last year. For example, a 2-room flat, the average price was $88,000, but the median income of buyers for 2-room flats was $1,280. And the DSR for a 2-room flat was 18%. So they use 18% of the median income of $1,280. So for a 3-room flat, DSR 24%; 4-room, 21%; 5-room, 23%; and average 21%. You can see that the DSR for almost all flat types was lower than 23%. What does this mean? Why 23%? Because 23% is the monthly CPF contribution that can be used to pay for housing mortgages. In other words, that loan repayment which is below 23% of total household income can be serviced entirely by their monthly CPF contributions. They do not need to come out with any cash. So if you take a typical 4-roomer, household income $4,000 plus, debt-service ratio of 21%, he does not have to pay any cash to buy that new 4-room flat which cost about $250,000. This is the best way of measuring affordability, to show that, if you compare incomes with house flat prices, flat buyers in each category of flat are able to afford their flats.”
“Then to sustain the value of the flat over time, their flats as well as their estates are regularly rejuvenated and upgraded through various upgrading programmes. Finally, in their later years, we help them to unlock the value that is stored in their flats to provide for their old age. So we start off helping them to buy a flat, preserving their value, finally unlocking that value. Many Members, Dr Lim Wee Kiak, and Dr Amy Khor, among others, have asked whether HDB flats are affordable at current levels. Are HDB flats over-priced? Have they gone up in price faster than income? I think as far as affordability of HDB flats is concerned, my answer is an unequivocal "yes". We sell our HDB flats at a generous discount, either by pricing new flats below market value or giving a grant to buyers of resale flats. There is a CPF Housing Grant of $30,000, or a higher grant of $40,000 if they stay near their parents. We have also introduced an Additional Housing Grant, or AHG, to help the lower-income families. This year, we are going to enhance the AHG further. I will elaborate on this later. When people talk about affordability, what do they mean? What is affordability? There are generally-accepted criteria to measure affordability which we have adopted. So we monitor affordability by how much a flat buyer has to pay out of his monthly household income, in order to service his mortgage loan. This is a commonly used indicator in the financial industry, they call it the debt-service ratio (DSR). A DSR of 30% or below, is accepted as an indication that housing is affordable. In other words, it is reasonable that you spend not more than 30% of your total household income on housing.”
“Mr Chairman, Sir, as Mr Liang Eng Hwa alluded to just now, our high home ownership rate has been a major Singapore success story. Statistics show that over 80% of Singaporeans live in public housing and over 95% of them actually own their own homes. This is a remarkable home ownership rate. In fact, I believe it is one of the highest, if not the highest home ownership rate in the world, and more remarkably we have achieved this without going into heavy taxation or suffering a sub-prime crisis as in the US. Rather, through generous Government subsidies, whether it is in the form of a housing grant or whether it is through subsidised loans and an emphasis on prudence in home purchases, the vast majority of Singaporeans need not worry about not having a roof over their heads, even in this economic downturn. For those who face difficulties, the Government will help them cope with the economic crisis, including their housing problems. I will elaborate on this later. Let me touch a little bit on the philosophy behind our home ownership programme. I have explained this before but I think it is worth reiterating. We adopt a life-cycle approach in our home ownership programme, so that the housing needs of Singaporeans are fully catered for over their lifetime. Let me elaborate. We start off with providing generous subsidies for young couples starting their own family, to buy their first home. When their family grows and they are financially ready, we facilitate their upgrading to a larger flat with another subsidised loan and this is the reason why we have kept the second subsidised loans for upgraders. I will talk about second subsidised loans for downgraders later on.”
“The Ethnic Integration Policy (EIP) was introduced in 1989 to ensure a balanced mix of the various ethnic groups within HDB estates. By providing HDB residents of different races with more opportunities to interact, the EIP fosters ethnic tolerance and understanding, and strengthens our social cohesion and national unity. The EIP is applied consistently to all races. Exceptions made to EIP can undermine the objective of maintaining a balanced racial mix and result in the creation of ethnic enclaves. However, HDB does exercise some flexibility under very exceptional circumstances. For example, it has allowed households of mixed marriages/parentage to be re-classified to meet the ethnic criteria. There are a large number of resale flats available in the market, with about 30,000 transactions annually. Sellers who are realistic in their asking price should be able to find buyers from the eligible ethnic groups. There could be a small number of households that may need more time to find a suitable buyer for their flat because of the EIP. This is a small inconvenience that Singaporeans must live with to ensure racial harmony in our society. DISCONNECTION OF UTILITIES (Number of households) 3. Mr Seah Kian Peng asked the Minister for Trade and Industry whether he will provide a monthly breakdown of the number of households that have had their utilities disconnected over the last 12 months.”
“Mr Lim Biow Chuan asked the Minister for National Development whether the Ethnic Integration Policy can be reviewed on a case by case basis when the implementation of the policy results in financial hardship to residents who cannot sell their flats to purchasers of other races.”
“ While demand for foreign workers is expected to fall during the current economic downturn, the number of foreign workers required in Singapore will still be high in the next few years. For instance, workers will be needed for the many committed construction projects, including various critical public housing and infrastructure projects. Currently, many foreign workers already in Singapore are living in overcrowded conditions due to insufficient proper accommodation. Our agencies have seen an increase in the number of complaints related to the illegal housing and overcrowding of foreign workers. We have thus stepped up enforcement efforts against such illegal housing and overcrowding. At the same time, we need to ensure that there is sufficient proper accommodation for the foreign workers. In December 2008, MND announced 10 temporary dormitory sites. Based on the inputs of advisors and grassroots leaders whom MND had consulted, several measures will be put in place to minimize disamenities that may arise when the dormitories are in operation. These include requiring the dormitories to have adequate facilities for workers, requiring the dormitories to appoint a liaison officer as a point of contact for the grassroots organisations and conducting educational programmes within the dormitories to inform workers of the social norms and laws in Singapore. We will release the 10 sites in tandem with demand. MND will continue to monitor the economic situation closely and adjust the supply of dormitories according to any changes in demand. ETHNIC INTEGRATION POLICY (Review) 2.”
“As the policy objectives of the GFA exemption were not met, these incentives were removed. In doing so, we took into account the interests of various stakeholders, including homeowners and the public. With the removal of GFA exemption for bay windows and planter boxes, developers can still incorporate these building features that are computed as GFA, into their designs if there is a demand for it. Since the announcement of the changes in Jul 2008, URA has met with industry professionals to explain the rationale for the changes. In response to industry feedback, URA has extended the grace period from 7th October 2008 to 31st December 2008 providing the industry adequate time to adjust to the changes. SUMMONSES FOR NON-PAYMENT OF ERP CHARGES (Number) 21. Mr Lim Biow Chuan asked the Minister for Transport (a) if he will provide the number of motorists who have been summoned for non-payment of ERP charges over the past three months and, of these, the number of cases which were due to defective cash cards; and (b) whether the problem with defective cash cards has been resolved.”
“  URA has earlier exempted bay window from the gross floor area (GFA) of a development as they were treated as small elements of a building design and do not form part of the floor. URA also exempted planter boxes within residential units from GFA computation to facilitate greening for high-rise living. However, bay window designs have since evolved to become a predominant feature for newer residential buildings and contributed significantly to the building bulk. Based on URA's review, more than half of proposals received have the entire external façades of the building wrapped around by bay windows or planters. The extensive use of bay windows leads to higher heat transfer into buildings and increases the need for air-conditioning. This is energy inefficient and environmentally unfriendly. The GFA exemption of planter boxes also did not achieve the objective of promoting high-rise greenery. URA noticed that only a small percentage of the approved planter boxes were being used for planting, leaving the rest either unplanted or illegally converted to other uses. Over the years, URA has received many complaints from Management Corporations of Strata Titled Development and the public on the illegal conversion of planter boxes to other uses. Home owners had provided feedback that they were not keen to provide planting and preferred to have the flexibility to convert the planter box space to other uses. In addition, while the government had exempted bay windows and planter boxes from GFA computation, buyers of residential units were made to pay for them as internal spaces of a residential unit. In fact, some designers reflected that they were told to maximise these features in order to maximise the saleable space.”
“Their arrears continue to accumulate and their flats run the risk of falling into negative equity. In these cases, HDB has no choice but to initiate compulsory acquisition of the flat. Otherwise, the lessee will be settled with heavy debts even if he were to sell his flat. I would like to assure the House that compulsory acquisition is considered only as a last resort, after all other avenues have been exhausted. HDB lessees facing financial difficulties with mortgage payments should work with HDB early on a long-term solution.”
“Dr Lim Wee Kiak asked the Minister for National Development in light of the current economic environment (a) how many home owners have defaulted on their HDB mortgage loans over the past five months compared with a year ago; (b) what is the Ministry doing to help these home owners tide over their financial difficulties; and (c) will the Ministry relax its policy on compulsory acquisition of these homes under the current economic circumstances. The Parliamentary Secretary to the Minister for National Development (Dr Mohamad Maliki Bin Osman) (for the Minister for National Development): Mr Speaker, Sir, as at October 2008, there are 33,000 flat owners owing HDB arrears of three months or more. They make up less than 8% of the 420,000 households with outstanding HDB loans. The number has remained relatively stable over the last one year. Lessees in financial difficulty may apply to HDB for temporary reduction of their monthly loan payments. This is to give some time for them to work out a sustainable solution to their financial problems. However, it is not in their interest to stretch the loan payment reductions over too long a period, as the mortgage debt will continue to increase due to interest accumulation. Therefore, lessees in financial difficulty need to be realistic about their financial circumstances, and consider long-term sustainable solutions. For example, they can sublet a room to generate additional income, or downgrade to a smaller, more affordable flat. HDB will assist on a case-by-case basis, for example, by providing another loan to help the lessees downgrade. However, there are lessees in mortgage arrears who are unwilling to work towards a long-term sustainable solution, even after HDB has provided ample time, assistance and advice.”
“The 80% home ownership rate that I was talking about refers to the HDB home ownership rate. Eighty percent of Singaporeans own HDB flats. This is of course a reflection of the kind of eligibility criteria that we set. When we set the family income eligibility criteria at $8,000, that corresponds to about 80% of the number of Singaporean households. So if the Member is asking about the home ownership target for HDB flats, my answer is that there is no intention to vary that at the moment. I think it is a very large coverage, as it is, to have a public housing programme that covers 80% of the population. By any account, in any country in the world, it is an extremely wide and a generous one. So I do not think that there is intention to widen that even further. On the other hand, there is also no intention for us to change it such that less people are eligible for HDB flats. There is no intention to do that either. Just to add, affordability actually has no relationship to the home ownership rate because when we talk about affordability, we will price our flat such that these people within that 80% range will be able to afford a HDB flat. So if you are a low-income family earning, say, $1,000 to $1,500, you will be able to afford a 2-room flat because it will be priced such that you can afford the 2-room flat. And, similarly, if your income is $5,000 to $6,000, you will be able to afford a 5-room flat because the price of the 5-room flat will be affordable to you. DEFAULTERS OF HDB MORTGAGE LOANS (Assistance to home owners) 6.”
“Is the Member asking whether it should be higher than 80% or lower than 80%?”
“Just for the Member's information, if he were to go and buy a HDB flat in the resale market at any time, whether the market is up or down, I will still give him a subsidy. That is a real subsidy. If you want to buy a flat near your parents, I will give you $40,000; otherwise, I will give you $30,000, over and above the price that you are paying in the resale market. So, as in the resale market where we have the CPF Housing Grant, which is a real subsidy, in the same way, when you buy a new flat, we are also giving you a subsidy, which is also a real subsidy.”
“But please consider your flat as a long-term investment and also a long-term place for you to raise your children and to retire in, not for you to go and buy and then sell five years later, and then after that, buy again five years later. That is not the purpose or the objective of the public housing programme.”