To those who say the wide ranging housing measures benefiting home buyers of different income groups are an election package, Minister of National Development Khaw Boon Wan says his housing policies have little to do together with the general election (GE).
“Should you’ve been watching what we have been doing since I entered MND (Ministry of National Development) more than four years ago, we have been making alterations almost each year. My objectives are very clear – that home ownership is a critical portion of the administration of Singapore.”
Speaking to reporters in the HDB Hub on Monday, he added that he has focused on particular groups of individuals in turn; the latest measures target mid to higher-income groups, singles and house renters, since the Build To Order (BTO) backlog for first-timer newly-weds has largely been cleared.
“That’s really how I approach the problem. Has it got to do with GE? Issues must be worked out and I come up along with a scheme and discuss it together with Singaporeans when I am ready, although I do not care less when the GE is. And once I’m convinced that those are practical schemes, I am going to launch it just as we can perform so.”
He was likewise inquired whether the latest policy changes could have negative consequences; for instance, could the higher income limit lead to more competition for BTO flats, now that households earning S$10,000 to S$12,000 are also eligible to apply for them? Or could developers of new launch executive condos EC be more bullish in their own pricing in view of the bigger demand pie?
Mr Khaw stated he believed the market would control itself. In any case, the government has levers to pull, be it to slow down its BTO building programme, or to release EC authorities property for sale semiannually.
He concurred, however, that there will be market shifts. At the borders of ECs and new launch condos, there will also be movements. The crucial point is we’ve influence within the supply and we can fix the supply, enlarging and reducing as needed.”
Whether couples or private home owners who once surpassed the income cap will move into the public housing market now would be a question of personal decision, one which the authorities would leave to decide, he said. “We make alternatives available, so that they are then free to choose.”
Advisors concur that marketplace shifts will happen, but differ on different property types will be affected by the higher income ceiling.
He anticipates a jump in EC developer sales in the next few months; the four ECs ready for launch between now and year’s ending – two in Yishun, Signature at Yishun EC & The Criterion EC. One in Sembawang, Parc Life EC and one in Choa Chu Kang, Sol Acres EC – could jointly yield 2,200 units.
“So it is a good thing for ECs in the short term, but in the medium term, it is a zero-sum game. High-quality and well-found BTO projects also can draw buyers from the EC market. I think the market will reach a brand new equilibrium, returning to normal in a couple of years.”
ERA Realty vital executive officer Eugene Lim said that if prices are raised by EC developers now, their precedence would be to get more sales.
Desmond Sim, head of Singapore and South-east Asia at CBRE Research, said that EC units that were unsold stood at an unprecedented 5,200 components as at last month.
Mr Khaw said that, given pipeline and the huge supply, EC developers may have to lower costs. “So, as I mentioned, at the borders, there will undoubtedly be some adjustments. But the crucial point is we have influence, we could control. It’s much like a tap.”
The faucet of HDB is the variety of BTO units it establishes each quarter; URA’s is the total amount of land it releases for sale every six months.
As regulators, developers and cost-setters, they can calibrate the equilibrium in supply and housing demand. With all the Central Provident Fund, all these would be the institutions that grant Singapore’s home authorities more power than those in other major cities, Mr Khaw said.