SINGAPORE: In the second instalment of their video series on public housing in Singapore, Workers’ Party MP Jamus Lim (Sengkang GRC) went back in history to explain how the current housing issues came about.
And while the goal of the Housing Development Board (HDB) has always been accessibility and affordability, Assoc Prof Lim said that in today’s reality, wait times for a house can realistically last for as many as five to six years. Flats in areas such as Dawson that used to cost around S$600,000 now fetch prices close to one million dollars (SGD) on the resale market.
The first efforts to provide housing were massively successful, the Sengkang GRC MP said. From only 8.8 per cent of the population living in HDB flats, the figure is now over 80 per cent.
But having achieved this, the HDB turned to other goals, he added, which is when the Asset Enhancement Program came into place.
“In the 1990s, Singapore experienced a construction and property boom. House prices between 1990 and 1996 rose by more than threefold. In order to meet this demand, HDB started to build all over the island. Unfortunately, as many of us know, in 1997, we had the Asian Financial Crisis. Prices of all assets, including housing, collapsed.
As a result, HDB was left with a large stock of housing at the time.”
And around the same time, BTO or Built to Order Flats were introduced. They ensured that HDB would not be left with a large supply of housing units as they would only be built on demand.
As a consequence of these policies, many Singaporeans came to expect that house prices would move in only one direction, up but never down. Singaporeans also came to believe that their houses would be a key source for their retirement.
He added, “Unfortunately, in 2017, then Minister for National Development Lawrence Wong suggested that the SERS programme would only apply to a small fraction of HDB flats. Hence, for the vast majority of Singaporeans, this would not be available for their retirement incomes, and their flats would eventually expire with a value of zero.”
SERS (Selective En bloc Redevelopment Scheme) is a government programme to renew older housing estates. It allows eligible residents to have an opportunity to move to a new home with a new 99-year lease.
Assoc Prof Lim said that how the government plans to address the issue would be the topic of the next video.
On Wednesday (Aug 16), Sengkang GRC MP Louis Chua explained the crux of Singapore’s public housing dilemma, that homes are expected to be both affordable and investment at the same time. /TISG
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