BT : HDB flats to stay affordable for Singaporeans: PM Lee

Business Times - 27 Jan 2010

HDB flats to stay affordable for Singaporeans: PM Lee

By EMILYN YAP

(SINGAPORE) The government is committed to keeping public housing affordable for Singaporeans, said Prime Minister Lee Hsien Loong yesterday.

He was speaking at a gala dinner for the International Housing Conference, organised by the Housing and Development Board (HDB) to mark its 50th anniversary this year.

The message came on the back of recent HDB data, showing resale flat prices reaching a new high in Q4 2009. Cash premiums for resale flats also jumped.

Mr Lee noted that HDB prices its new flats so that the vast majority of Singaporeans would be able to purchase them. The agency will also build enough flats to meet demand from a growing population.

'However, the government has less control over housing prices in the resale market,' he said. These prices are reached on a willing buyer, willing seller basis, and are affected by other factors in the economy, including those in the private property market.

As a result, resale flat prices will fluctuate, Mr Lee said. 'But over the long term, the value of HDB flats depends on the strength of the Singapore economy. Provided Singapore continues to do well, our flats will maintain their value, and Singaporeans can enjoy an appreciating asset.'

Demand for resale flats was strong for most of 2009. HDB said last Friday that its resale price index hit 150.8 points in Q4, up 8.2 per cent from the previous year.

The median cash premium for all resale transactions doubled to $24,000 in Q4 from Q3. It has since dipped to $22,000 for the first half of this month. With a robust housing market, HDB will be launching 12,000 new build-to-order flats this year.

Today, more than eight in 10 Singaporeans live in HDB flats and nine out of 10 HDB households own their flats. The situation is markedly different from that in 1959, when less than 10 per cent of the population of 1.6 million owned a home.

There are now more than 900,000 flats across the island and HDB will be building the one millionth this year.

Mr Lee believes that HDB still has a role to play. While private housing has become more readily available, it caters mostly to higher-income groups - HDB still needs to provide good-quality public housing to most Singaporeans.

But he also recognised that Singaporeans' aspirations have risen sharply, and a flat acts not just as a shelter, but also as a key investment asset. Home seekers now have many considerations in choosing a flat.

'HDB is committed to providing Singaporeans with high quality public housing, even though I hope Singaporeans can understand that it cannot accommodate every preference and meet every expectation,' he said.

Some 800 guests, including delegates and speakers attending the conference, former national development ministers and former HDB executives were at the dinner.