Wednesday, March 13, 2013

Govt open to extending singles' housing policy to more people

10 March 2013

SINGAPORE: National Development Minister Khaw Boon Wan says the government is open to raising the income ceiling to allow more singles to buy new HDB flats.

But this will depend on how manageable application rates are for the new scheme, which was announced on Friday during the Committee of Supply debate for the Ministry for National Development.

Singaporeans aged 35 and above, who are singles and earn up to S$5,000 a month, can soon apply to buy two-room Build-To-Order (BTO) flats in non-mature estates.

The government is still finalising details of the policy but aims to let the first batch of eligible singles apply in the July BTO launch.

Speaking on the sidelines of a community event on Sunday, Mr Khaw said housing policies need to be gently tweaked before more adjustments are made.

He explained that baby steps are taken so as not to impact the property market drastically.

This goes for building new homes too, and the trick is to determine the correct supply to meet demand.

Mr Khaw said it would not be practical for the government to build 25,000 flats annually, if there are only 15,000 marriages.

Building in excess may also hurt the rental market where some 40,000 HDB flats are being sublet in whole.

"There are something like 80,000, 90,000 families out there - which is a lot - who are depending on rental income. So they will suffer, for example, if there is a collapse in the rental market," said Mr Khaw.

Mr Khaw said housing policies cannot be toyed around with, like the computer game "SimCity" where players are tasked to develop a virtual city.

"Singapore is not 'SimCity', because if you manipulate wrongly, it hurts people, real people, fellow Singaporeans. Then what? So, I think, let's be a little bit reflective," he said.

Mr Khaw said there is no one perfect housing initiative that will please everybody. The important thing is for Singaporeans to think carefully about the trade-offs between different policies, he said.

In this respect, he hopes citizens will come forward and have a conversation with him, as the government fine-tunes the various steps taken to improve the housing situation in Singapore.

Mr Khaw said it should take around two to four months to gather views from different stakeholders.

While Members of Parliament and the public have offered suggestions, Mr Khaw said it is crucial to determine which of them are workable.

And a key indicator of this is how housing prices are impacted.

Whatever trade-offs are made, they have to be sustainable over the long term, said Mr Khaw.

On the various cooling measures introduced, Mr Khaw said the government is aiming for a "soft-landing" approach, not a sharp correction to the property market.

He said around 40 to 50 per cent of homeowners are still servicing mortgages and a drastic drop in property prices may prompt banks to ask the homeowners to top up loans, causing severe financial problems.

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