Coming Up: 3,000 More HDB Flats

Source : The Straits Times, Sep 18, 2008

Govt to release more units for sale by year’s end as demand for homes doubles

THE Government will release 3,000 more HDB flats for sale by the end of the year, amid a doubling of demand for flats by home buyers.

‘Demand for new flats from young couples has definitely gone up since 2006,’ Mr Tay Kim Poh, the HDB’s chief executive, told reporters at the release of the board’s annual report on Tuesday.

Flat buyers bought 11,991 new flats in the year ended March 31, more than double the 5,712 recorded the year before.

To meet demand, the Housing Board has already released over 5,000 flats for sale so far this year, out of a planned 8.400 for the whole year. This is 40 per cent more than last year’s 6,000, which was already higher than the year before. Next year, ’should the demand remain strong’, the HDB ‘will release just as many’ flats, Mr Tay said.

For now, though, ‘unless our population grows very fast, there is no need to build at the same level as the 1980s’, he added.

The HDB’s unsold stock has dwindled from about 2,000 flats last year to some 1,500 now. Hopeful buyers have complained of difficulties and long waits in trying to secure a home.

‘Young couples looking for a flat should not come to us for a new flat. We don’t have a ready supply,’ Mr Tay said.

First-time buyers who are not particular about location, however, usually bag a flat on their first or second try, he said.

He also stressed that while the board is ‘concerned’ about rising construction costs, HDB flats remain ‘very affordable’. At this point, flat buyers are using about 20 per cent of their incomes to service their loans, and most do not have to use all of their Central Provident Fund money, he said.

‘When we price our flats, we don’t link it to development costs, but to market prices. If market prices stabilise, like they are appearing to do now, our flat prices will also be stable.’

Higher construction expenses, which by some estimates have risen by 20 per cent to 30 per cent in the last year, have hit the HDB less severely than some private developers. The board buys materials in bulk to supply to its contractors, mitigating the increase in costs, said Mr Sng Cheng Keh, its director of development and procurement.

For this year, the HDB’s focus is to meet the ‘rising aspirations’ of flat buyers and dwellers, said Mr Tay.