http://www.straitstimes.com/archive/...-khaw-20121117

BTO flats affordable for first-timers: Khaw

Published on Nov 17, 2012

By Robin Chan


THE rise in prices of new Housing Board flats is less than that of resale HDB units, National Development Minister Khaw Boon Wan said in Parliament yesterday.

Since January 2009, the price of new HDB flats for first-time buyers has risen by 12 per cent, which is lower than the corresponding 34 per cent rise in the HDB resale price index.

These homes for first-time buyers are also affordable, he added.

"We take affordability fully into account when pricing BTO (Build-To-Order) flats. New flats enjoy generous discounts off market prices," he told the House when replying to Ms Lee Bee Wah (Nee Soon GRC).

But Ms Lee argued that a 12 per cent rise could still be higher than the salary increase of many Singaporeans. She asked if the Government could keep prices stable.

Mr Khaw replied that first- time buyers of new flats in non- mature estates used, on average, 23 per cent of their monthly income for housing loans.

Also, they were able to pay their monthly instalments using their Central Provident Fund contributions, with minimal or no cash outlay.

"You judge by the figure that I've given - 23 per cent of their monthly income - I think that is affordable for BTO," he said.

The price of a four-room HDB flat in Sengkang or Choa Chu Kang ranges from $250,000 to $310,000, he said. "Looking at it from the situation that we are facing today, I find these figures very reasonable," he added.

Mr Khaw said a lot of the misunderstanding over HDB home prices resulted from people looking at the resale price index - which hit a record high in the last quarter. The Government is trying to stabilise that, he added.

"Resale price is beyond my control. That is set by buyer and seller. But for first-timers buying BTO flats, that is within my control and it is my job to ensure it will be affordable," he said.

In fact, he added, it is "quite an achievement" to have brought about a 12 per cent price rise in new flats compared with the 34 per cent increase in resale prices.

"I think not enough credit has been given to my ministry," he said, with a smile.

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