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Tough to get ‘balance right’ when pricing HDB flats in central areas

Tough to get ‘balance right’ when pricing HDB flats in central areas.

SINGAPORE — It is difficult to get the “balance right” when it comes to pricing public housing flats, particularly for those located close to the city centre, as the Government has to weigh between pricing them to market value and keeping housing affordable, said National Development Minister Lawrence Wong.

Speaking during his ministry’s Budget debate on Thursday (March 7), Mr Wong was responding to a concern raised by Nominated Member of Parliament (MP) Walter Theseira about social stratification in housing estates.

Associate Professor Theseira, a labour economist with the Singapore University of Social Sciences, had pointed to the widening price disparities between Housing and Development Board (HDB) flats located close to the city centre and those that were not.

Acknowledging the challenges that the Ministry of National Development (MND) faces, Mr Wong said: “It’s difficult to get this balance right”

“If you price it to market, then only the very well-off can afford. If you want to make it affordable, the only way is through a big discount to the BTO (Build-to-Order) price.”

However, Mr Wong said that handing out discounts through HDB’s sales exercises of upcoming public flats — also known as BTO — would lead to a “lottery effect”.

“The lucky guy who gets the flat gets a so-called windfall compared to others who buy flats elsewhere. Then it’s not a fair distribution of housing subsidies,” he added.

The long-term solution to tackle this problem is to “ensure that every part of Singapore is well-developed” and that each HDB precinct has good amenities and facilities, as well as convenient access to transport network and job centres close to home, said Mr Wong.

“Public housing must continue to integrate Singaporeans of all backgrounds — we must never become segregated by class, race or income,” added the minister.

However, Mr Wong also recognised that these efforts do not “automatically equalise property values”, but that the Government can at least “temper some of the excesses in the market”.

To read more: https://www.todayonline.com/singapore/tough-get-balance-right-when-pricing-hdb-flats-central-areas-lawrence-wong

Adapted from Todayonline 7th March 2019