Enough flats at 'right' prices for first-timers

Govt committed to ensuring public housing remains affordable, says PM

Published on Sep 27, 2012

By Aaron Low, Economics Correspondent

WHILE public housing has become more expensive, the Government has pledged to ensure that it remains within the reach of young Singaporeans.

That means building enough Housing Board flats and setting their prices "right", so they are affordable for first-time buyers, said Prime Minister Lee Hsien Loong this week.

"We're building for Singaporeans. So if Singaporeans say they can't afford to buy the flat, who can afford to buy the flat?" he said.

"It's not my purpose to build flats and leave them on the shelf. It's my purpose to build flats and sell them to Singaporeans at a price which they can afford, which is what we're going to do."

The cost of housing has been one of the biggest concerns, especially for first-time buyers who are often young, newly married couples.

This year, following policy moves to ease the housing crunch, queues for new flats have shortened and prices in most new projects have risen marginally, by 1 per cent or 2 per cent, according to recent reports.

Still, not surprisingly, the issue made it to the top three questions put to the PM, with Singapolitics readers asking whether it was possible to treat an HDB flat as a home, rather than as an asset.

The concern appeared to be that many worried about rising housing prices and wanted measures to keep prices of public flats low.

Replying, Mr Lee said Singapore's current system was but one type of model of public housing.

In other countries, the aim was simply to provide a roof over citizens' heads, with many renting instead of buying a home.

The Singapore Government uses this rental concept for older folks, who can choose to lease a flat for 30 years, said Mr Lee.

The lease is not easily transferable, but if the residents give it up, they will get the leftover lease amount refunded.

But for young people, Mr Lee said he preferred giving them a housing asset as an "endowment". "This is for you for life and to help you have a stake in Singapore and to make sure that you start off with chips which can bring you to an equal starting point," he said.

"You spend a reasonable proportion (on housing) and you can pursue your career, you can bring up your family and you can have a satisfying life. I think that's a better solution."

On keeping flats within their reach, Mr Lee said of the bigger supply of 25,000 flats this year and another 20,000 next year: "We will build enough. We have enough land. And we can price it so that it will remain affordable. The pricing is within our control."

Observers and home buyers were cheered by the PM's remarks, though some were unsure what a "right" price meant.

Asked Mr Leo Tan, 31, an insurance agent looking for a home: "Did PM mean that it will price flats even lower than the current 20 per cent discount?"

PropNex Realty chief executive Mohamed Ismail believes the Government is already doing all it can without creating distortions in the market.

"To cut prices of new flats by, say, 30 per cent across the board, would be to distort the market and affect more than one million HDB home owners who have placed trust in the Government's policy," he said.

"So the current approach - giving subsidies to first-timers and to low-income families - works better."

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I think it depends on how Singapore develops, on how we expand the land area... on how we redevelop our city and provide a good quality of life in an urban environment.

Our Masterplan is based on 6.5 million but 6.5 million is not a target. It's a possibility which we have mapped out and we know that can be done...

We have to invest in infrastructure, we have to rebuild the city... You need time but you also need an economy which is prospering, because if you don't have a successful economy, even one million people in Singapore will starve.

- PM Lee, on what population size the country could accommodate in years to come


The world has changed greatly... I would say it's a much more orderly and certain environment, and therefore growing up takes longer, because the world doesn't hit you as quickly and as relentlessly when you're growing up. But it therefore takes longer to reach that point of knowing what's happening outside, how that impacts us and what will happen, how we will react if we come across adversity. So of course we worry about that.

What happens when the first time a real storm bursts on our head? Will we toughen up and make it or will it be such a shock that suddenly we won't be able to take it?...

I think there are a good number of young people who have that passion and that commitment to go and work. So how that generation responds to the new world, we will see, but I think we should have confidence in young people.

- PM Lee's answer when asked whether he was worried about the "strawberry generation"


We've kept our economy prospering and our unemployment rate very low. So even if you lose the job, it's not hard to find a new job. I think that this is a good solution. In countries which have unemployment insurance, the tendency is for people, more people to be unemployed and for unemployment to be longer. Because the pressure on people to find new work is less.

Now if you're stuck in a situation like the Americans or the Europeans like 9, 10 per cent unemployment or America now 8, at least nominally 8, then you have no choice. You have to do something to help people who are thrown out of work and despite their best efforts can't find work.

But if we're at where we are now, with unemployment 2, 3 per cent and work easy to find, I think it's best that we just focus on keeping the economy growing and keeping unemployment low.

- PM Lee responding to a suggestion of introducing unemployment insurance in Singapore