The government will implement new regulations for Housing and Development Board (HDB) flats built in prime locations, Minister for National Development Desmond Lee said.
This is to ensure that such HDB flats do not become the exclusive domain of the more affluent members of society, Lee said, as part of an interview with Lianhe Zaobao published on Nov. 29.
An example of flats in prime locations includes those slated to be built as part of the Greater Southern Waterfront (GSW) coastline project, which Prime Minister Lee Hsien Loong announced in 2019.
Issues of fairness as BTO buyers in prime locations receive a "windfall": Lee
Lee explained that the government would continue to build HDB flats in prime locations.
While this is done in order to revitalise those districts, Lee said that fairness must be maintained, so that they can remain inclusive and diverse.
However, Lee spoke about how the current state of affairs with flats in prime locations raised issues of fairness.
Those who bought Build-to-Order (BTO) flats in prime locations have received a "windfall", said Lee, as they would have received more subsidies on the purchase price as compared to those who bought BTO flats elsewhere.
This is even though their property's prices had greater room for appreciation, Lee said.
Flats in prime locations may become exclusive to the wealthy
Lee warned of the potential consequences, if the current situation were to persist:
"If premium units are traded at high prices, there is a risk that only wealthy people will be able to afford them. As a result, the nature of the residential area will change, and the prices may become unaffordable to the ordinary Singaporean."
He also said that it "should not be the case" that HDB sells its flats at affordable prices, which are then pushed up to a "very high" level as the properties are traded, while the government is unable to impose limits or keep the prices affordable for ordinary people, and has no choice but to leave it to the market to dictate prices.
"Public housing is not just a real estate issue, but is also closely related to social policies," Lee said, adding that it should also "provide housing for all citizens, ensuring that those from different industries, demographics, and races can be integrated."
"We don't want there to be premium HDB areas that only the rich can afford," Lee said.
Two-pronged approach to address issue
New regulations will be implemented to tackle the issue from two angles, Lee added.
These include:
Different types of housing to be provided in prime areas: First, the government will ensure that new HDB projects in prime locations include various types of housing, including rental flats, as well as smaller HDB flats which are suitable for lower-income families, and the elderly.
Resale transactions to be restricted: Second, the prices of flats in prime locations will be controlled. Prices for BTO flats will be kept affordable, while measures will be introduced to restrict resale transactions of hotly-demanded units, so as to moderate their prices.
Lee did not share further details of the pricing measures, but said that MND would formulate its plans in the next few months.
Public consultation would also be carried out, Lee said.
Property market cooling measures in 2018
In 2018, MND introduced new regulations to cool the market for residential properties, triggering a rush of buyers at show flats.
The changes raised the rates of Additional Buyer’s Stamp Duty (ABSD) by an additional 5 per cent for Singaporeans and Permanent Residents buying their second and subsequent residential properties.
The increase was also applied for foreigners buying any residential property.
Lee's three priorities at the moment
In a video clip of the interview, Lee explained that three areas currently are high on the priority list for him. They are:
- Issues faced by the construction industry. Lee said that the government would provide support by working together with The Singapore Contractors Association Ltd (SCAL), and rolling out various policies and programmes to support the construction industry and help manage the impact of the Covid-19 pandemic. He noted that while the situation has improved recently, vigilance was still necessary, adding that the government would continue to monitor it closely.
- Help for those awaiting their BTO flats. The pace of construction work on BTO projects has slowed due to the Covid-19 pandemic, Lee noted, but he promised that work would proceed as quickly as possible so that flats could be transferred to their owners, while maintaining safety at work, and the quality of the construction.
- Help for HDB dwellers in financial difficulty. Lee noted that a number of HDB dwellers might be facing adverse financial situations such as unemployment or pay cuts, in light of the current economic situation. They might have difficulty making payments toward their mortgages or monthly rent, Lee said. New policies to help this group would be introduced, said Lee, so that they would not have to give up their homes.
Lee also added that some low-income households of rental flats could be facing "complicated situations" such as family issues, which force them to stay in rental flats instead of being able to purchase their own homes.
For this group, housing-related issues could be "a downstream problem", requiring MND to help those households holistically, by resolving their upstream problems by working together with the Ministry of Social and Family Development (MSF), as well as Family Service Centres and other community organisations.
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Top image via Desmond Lee on Facebook