Singapore—Since more than four out of five people in the country live in Housing & Development Board (HDB) flats, ageing leases and decreased property prices are issues of concern for many Singaporeans.
The issues surrounding public housing ownership may yet become an important issue for the upcoming General Election, which is due to be called before April 2021, according to an article from the South China Morning Post.
The Government has pushed HDB apartments as assets whose value will increase over the years. These flats are meant to add to retirees nest eggs as they move to smaller flats later on, or decide to live with their children’s families.
One option the Government has offered is for HDB appartment owners to sell back part of their lease, under the Lease Buyback Scheme. However, not everyone feels this scheme is worth it, since a large part of the money from the sale goes to the vendor’s CPF, instead of funds that can be tapped immediately.
But Heng Swee Keat, Singapore’s Finance Minister as well as Deputy Prime Minister, promised to enhance the Lease Buyback Scheme when he rolled out the national Budget in mid-February.
The housing issue is dear to many Singaporeans’ hearts, especially for those who consider their homes as their biggest asset.
However, Lawrence Wong, the country’s National Development Minister, said in 2017 that there is no guarantee of upgrades for older flats and that when leases expire at the end of 99 years, they will be turned over to the Government without compensation, which, understandably, upset many.
SCMP quotes Derek da Cunha, a political analyst, as saying he would be surprised if opposition parties, especially the Workers’ Party (WP), would not remind the ruling People’s Action Party (PAP) of the words of Singapore’s founding Prime Minister Lee Kuan Yew, who said in 2013, “We intend to keep the value of these homes up, it will never go down. Because [leases] will be renewed, the surroundings will improve, and as Singapore prospers, GDP goes up, the value of homes will go up.”
The WP already recommended last November that homeowners with a remaining tenure of 30 years would be allowed to sell their flats back to the government. These in turn could be re-sold at shorter lease terms or be put under the Public Rental Market (PRM) scheme proposed by WP at attractive prices.
Other ideas for housing were also proposed by Housing analyst Ku Swee Yong, former GIC economist Yeoh Lam Keong and architect Tay Kheng Soon.
Mr Wong said that the National Development Ministry would take the ideas put forth into consideration.
In June of last year, the Government announced it would be reducing the supply of private residential housing from confirmed sites under the government land sales (GLS) programme for the latter half of the year.
Back then, it was reported that there were 24,000 private housing units that were empty. Additionally there were 44,000 private housing units in the pipeline, made up of 39,000 unsold units from GLS plus another 5,000 units from sites pending planning approval.
The Ministry of National Development (MND) made an announcement on June 6, 2019, that five confirmed list sites and eight reserve list sites yielding around 6,430 private homes, 92,000 sq m gross floor area (GFA) of commercial space and 1,100 hotel rooms had been released.
The market has also seen lowered prices and demand for older apartments.
Analysts believe that the Government will step in to help with the issue, especially with housing being so important to Singaporeans.
SCMP quotes housing analyst Ku Swee Yong as saying, “Singaporeans think it is a done deal that the government will not let them down on this issue. Even after Lawrence Wong clarified the lease issue to caution against overpaying for old flats, people still have this delusion that the government will resolve the decaying lease issue.”
Indeed, housing may well the the cornerstone of PAP’s achievements in the eyes of many Singaporeans. Former GIC economist Yeoh Lam Keong said that the country’s public housing system is “the single boldest, most audacious, most radical, most amazingly successful social policy that has ever been enacted by the PAP, and, in housing terms, that has ever been enacted by any government in the world”. —/TISG