Leng Beng’s Recipe For Public Housing

Source : The Business Times, April 3, 2008

Lease new units to first-time S’porean buyers, with option to buy: CDL chief

CDL boss Kwek Leng Beng has a suggestion to make housing more affordable for young Singaporeans.

He says the government could build more public housing units, lease them out to young Singaporean first-time buyers and give them an option to buy the flats within 10 years, at fixed prices.

‘I think there’s demand for such housing from younger people, including singles. I think smaller flats with one or two bedrooms will be quite suitable for them,’ Mr Kwek, who is executive chairman of City Developments Ltd, said in a recent interview with BT.

‘Such a policy would cater to those who feel housing costs have gone up too high and they can’t afford them. Over time, as these people get more pay, they can afford to buy the homes,’ he added.

The Housing and Development Board currently has schemes to rent out public flats to Singapore citizens but these are for lower-income households with gross monthly incomes not exceeding $1,500 for the Public Rental Scheme, and $2,000 (at the point of application) for the Rent and Purchase Scheme.

The latter scheme, typically for three-room flats, allows those who rent flats to buy them later from HDB.

The schemes are open only to those who have a family nucleus, which effectively excludes single Singaporeans making solo applications.

Singaporeans also have a range of choices when it comes to buying public housing flats, whether directly from HDB or through the resale market.

However, the scheme Mr Kwek proposes would be directed at the younger set, including singles, who may just be starting out in their careers and find housing prices too high.

‘Their salaries may not be enough today,’ he said. ‘However, over time, their incomes will rise - but by then, they still may not be able to afford buying a home because property prices may have appreciated further. So the government could build new flats and rent these out to Singaporeans and give them the first right to buy the units within, say, 10 years, at a fixed price.

‘If eventually, they don’t buy these homes, the government can take them back and lease them to others.

‘This would be a way of helping our citizens. If I am young, talented, you should give me a chance to own a flat. It will give me something to work hard for. I’ll want to be successful. So we’ll also be encouraging them to be more entrepreneurial,’ reckons the father of two sons, one in his early 30s and the other in his late 20s.