HDB upgrading pace will continue despite rise in construction costs

Source : Channel NewsAsia - 10 Jun 2008

National Development Minister Mah Bow Tan said the Housing and Development Board (HDB) is containing construction costs as much as it could even though they have gone up significantly recently.

HDB is doing this by simplifying some of the projects or by combining them so that there are more economies of scale. A recent example is the Punggol Sapphire project which has more than a thousand units against the usual number of some 500 units per project.

But Mr Mah assured Singaporeans that public flats would continue to be affordable, despite the rising costs. The pace of HDB upgrading under the Main and Interim Upgrading Programmes will also not be affected by rising costs.

Mr Mah was speaking to reporters on Tuesday after an event to congratulate the HDB for winning the United Nations Public Service Award.

HDB said the award is in recognition of the Home Ownership Programme, which has successfully provided over 80 per cent of Singaporeans with affordable quality flats, of them 95 per cent own these homes.

While the challenges for public housing today may be different, they are no less formidable than those faced by the HDB when it started Singapore’s public housing programme in 1960.

HDB said flat buyers now have varying aspirations. There is also the challenge of differing income levels. So the HDB will continue to meet the housing needs of the majority as well as lower income Singaporeans.

Mr Mah said: “Someone with an income of S$1,000 to S$1,500 is eligible to rent a flat. But I would much prefer that they would own a flat, even if it is a small flat because from there, they can build a base, earn some assets and later on when they do well in life, they can upgrade.”

Mr Mah added that another challenge is to rejuvenate the older housing estates so that Singapore maintains the quality of living in these estates and the value of the flats.

But HDB’s immediate task is to tackle rising costs as the construction industry has not been spared from the global phenomenon of increasing prices of raw materials.

He said: “Raw material prices and energy prices have increased. All these are feeding through into the construction cost index for the moment. What we have to do first is to manage the costs as much as we can by simplifying some of the projects or by combining them so that there are more economies of scale, (and) by using more economical materials.”

Mr Mah said that the government is also helping to reduce the construction pressure by withholding some projects. But the minister added that the government does not expect a major delay in the completion of the two mega integrated resort projects due to rising construction costs. - CNA/vm