ST : Lim Hwee Hua explains thinking on housing policy

Dec 06,2010

Lim Hwee Hua explains thinking on housing policy
Residents had asked about poor forecasting, latest HDB restrictions

By Zakir Hussain
THE housing market may be cooling, but it was a hot issue for two veteran Kampong Chai Chee grassroots leaders who quizzed Minister in the Prime Minister's Office Lim Hwee Hua on policy changes and what they saw as shortcomings.

Residents' committee member Bernard Choo, 64, wondered if the housing authorities slipped up in planning for population growth, leading to 'a huge housing demand chasing a very limited supply'.

Former community centre management committee chairman Png Wee Chor, 71, took issue with the tightening of restrictions on HDB owners buying private property, and private property owners buying resale HDB flats.

Both questions dominated an hour- long dialogue Mrs Lim had with residents during her visit yesterday to the Kampong Chai Chee ward of East Coast GRC. Other issues raised included future plans for the ward and amenities such as the food centre and sports facilities.

Mrs Lim, who acknowledged that housing was an issue close to people's hearts, used the opportunity to explain the complexities of planning for housing demand.

She noted that it was extremely difficult to be precise about a country's future needs as trends and preferences change.

In outlining the thinking behind the latest measures, she told Mr Png that when the Government saw that younger couples found it hard to get a flat, it discovered that a key obstacle was the rising cash-over-valuation for resale flats.

The HDB and National Development Ministry realised that a small group of private property owners were speculating on these flats, causing prices to rise faster.

Hence the Government decided to impose new ownership restrictions.

'The starting point is one of trying to meet the needs of Singaporeans who would like to own a flat, who feel that they have not been able to do so because others are participating - who perhaps can be left out until such time as the needs of younger Singaporeans especially have been met.'

Soaring resale flat prices of late prompted concerns that these are out of reach for many. New rules took effect in September, and on Nov 27, National Development Minister Mah Bow Tan said there were signs that these were working.

On Mr Choo's point about poor forecasting having led to 'a very mismanaged situation', Mrs Lim said:

'It's extremely difficult to do forecasting on a macro basis just based on straightforward population growth. The other difficulty revolves around shifting patterns of behaviour.'

She cited how young couples previously did not mind living with their parents after marriage, or renting a flat first. But now they want their own place, and are willing to live further away from the city.

She noted that 22,000 new flats - plus 4,000 Design, Build and Sell Scheme units and 4,000 executive condominium units - will be launched next year.

But, she added: 'It is of course in everybody's interest to try and get the projections right. The Government takes in some of these shifting preferences and puts out sufficient flats or sale of land to the private sector and makes sure there will be enough supply of public housing.'

Mr Png backed measures to cool the market, but found it unreasonable to bar HDB owners from having homes abroad.

'The Government asks us to venture and invest overseas, we need a place to stay,' he said in Mandarin.

New residents wanting to keep homes abroad for their parents there could no longer buy an HDB flat, he added.

Responding, Mrs Lim said that for exceptional cases, residents should approach their MP to appeal to HDB as it has said that it will consider such cases.

At the dialogue, Mr Png also said the Government should compensate those whose investments in financial products had collapsed during the 2008 economic crisis. 'Many suffered a lot of anguish and pain which may be reflected in the (next) election,' he said.

Mrs Lim, who is also Second Finance and Transport Minister, said the Monetary Authority of Singapore had imposed stricter regulations on financial products, and worked with banks on compensation processes. 'You can't have a blanket ruling saying everybody will get so much. A lot will depend on how knowledgeable the person is at the point of investing.'

zakirh@sph.com.sg