Ministry of National Dev Keep housing affordable
1. Many people, including politicians, are talking about the issue of affordability of housing. Some have proposed lower land prices to lower the prices of HDB flats to a more affordable level. However, there is concern that lower prices will be bad for owners who bought their HDB flats earlier.

2. In my view, there is no solution to this problem. There are two contradictory goals:

a) Increase the value of property for owners to enjoy "asset enhancement"

b) Keep the property affordable for future generations.

3. The government has adopted the following approach in the past:

a) Providing higher grants for new buyers, so that the HDB flats are affordable

b) Adopt cooling measures to stabilize the property prices.

4. One possible approach is to introduce a new class of HDB flats that are sold at controlled prices, which are pegged to the median income. These flats have to be sold back to HDB at the controlled prices. This proposal was made earlier by the Singapore Democratic Party but was rejected by the government. Perhaps it is time for the proposal to be considered?

5. The new class of HDB flats can co-exist with the existing class of HDB flats which can be sold in the market, subject to the current set of regulations. The buyer has the option to own the current class or the new class of HDB flat.

6. Perhaps there is no need to change the existing policy of the government. In recent years, the property prices have escalated due to the limited housing supply caused by the pandemic. This may be a temporary situation. When the supply is increased through the building of new flats, the prices may stabilize.

Tan Kin Lian

 

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