Calming, not collapsing housing market

National Development Minister Khaw Boon Wan

SINGAPORE - Public housing policy is headed towards a serious revamp.

After 50 years, the time is ripe to revisit old assumptions and examine existing policies, National Development Minister Khaw Boon Wan said in Parliament last week.

Some old assumptions no longer hold. For one thing, singles will be allowed to buy subsidised new Housing Board flats. Current policy allows them to buy only from the resale market. They get a cash grant of $15,000 from HDB if they earn $5,000 or less.

Last Friday, Mr Khaw announced that singles aged 35 and above, and earning up to $5,000, will be allowed to buy two-room new flats in non-mature estates. These restrictions might be relaxed over time, he hinted.

He also pledged to bring down the price of new flats in non-mature estates by up to 30 per cent.

Two days later, at a grassroots event, he offered up three radical suggestions on how the latter might be achieved: Having shorter leases; a longer minimum occupancy period before a flat can be sold on the resale market; or requiring that flats be sold back to HDB at the original sale price, with a slight interest.

Although Mr Khaw made clear these suggestions were for discussion only, and invited Singaporeans to the conversation table to rethink public housing, buyers, sellers and industry players alike are already wary.

Property stocks tumbled a day after his remarks, with investors worried about the effect of the changes on property prices.

Soaring home prices

What exactly might a rethink on housing policy entail? How radical will the changes be? How far should the Government go in remaking public housing?

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