Source : Straits Times - 11 Nov 2008
RECENT letters have raised questions about the prices of HDB flats (’Disclosing take-up rates will help buyers’, Oct 18; ‘Pricing puzzle’, Oct 18; and ‘High property prices affect us all’, Nov 1).
The writers have referred to the prices of flats at Pinnacle@Duxton as well as recent Design, Build and Sell Scheme (DBSS) projects.
We would like to point out that HDB offers a whole range of flats, starting from $77,000. The flats in Pinnacle@Duxton and the DBSS are at the top of the range, and form less than 8 per cent of the total flat supply offered in the period 2006 to 2008. Their relatively high prices reflect their market value in terms of location and interior finishes. Even though they are pricier than most other new HDB flats, they remain affordable to those at the higher end of the $8,000 income eligibility band. For example, the most expensive Pinnacle@Duxton flat at $645,800 requires a debt-servicing ratio (DSR) of 29 per cent for a household with monthly income of $8,000, which is within the affordability benchmark of 30 per cent.
Public housing caters to over 80 per cent of the population in Singapore. Therefore, HDB builds flats with a range of prices, locations and attributes to cater to the different needs and budgets of different flat buyers. On their part, flat buyers should exercise financial prudence and buy flats within their financial means.
Two of the letters compare the selling prices of the Pinnacle@Duxton flats against its earlier launch prices and asked about the cost of the flats. Such comparisons are not meaningful as HDB takes a market-based approach in pricing its flats. The new flats are sold according to what they would fetch on the open market, but with a generous discount which is the subsidy that buyers enjoy. When the market goes up, HDB prices also move up. But when the market goes down, new flat prices are reduced. In the late 1990s after the Asian Financial Crisis, the property market suffered a severe downturn. HDB followed the market and moved prices downwards. In Sengkang, for example, the average prices of some five-room and executive flats were up to 30 per cent lower in 2005 than when they were first offered for sale in 1997 to 1998.
We thank the writers for their feedback.
Ignatius LourdesamyActing Deputy Director (Marketing & Projects)for Director (Estate Administration & Property)Housing & Development Board
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