Source : Straits Times - 14 Oct 2008
I REFER to Mr Gilbert Goh’s letter, ‘Shouldn’t new HDB flats be priced less than market rate?’ (Sept 30). New HDB flats are indeed priced below their market value. The HDB takes a market-based approach when pricing new flats so as to reflect the true subsidy to buyers. To determine the market value, HDB takes into account the actual selling price of similar flats in the vicinity, bearing in mind variations in location, design, internal finishes and other attributes. The flat is then sold at a discount to this price.
The Pinnacle@Duxton is an iconic public housing project. It is situated in a prime location with easy access to Tanjong Pagar and Outram Park MRT stations. This special project has an international-award winning design, with unique features such as sky gardens and bridges linking its seven tower blocks, and planters, balconies and bay windows. The relatively high prices of these flats are a reflection of the premium attributes and prime location. However, they are still priced below the resale prices of similar flats in the vicinity. As of last Friday, the subscription rate was already over seven times the supply offered. This high demand shows the flats are attractively priced.
The Government is committed to providing affordable public housing, and offers a range of subsidised flats to meet the needs of flat buyers with different incomes. First-timers who bought new flats from the HDB last year used, on average, about 20 per cent of their monthly household income to service their housing loans, and most flat buyers (at least 70 per cent) could service their housing loans entirely from their CPF contributions.
The minimum occupation period is imposed to prevent speculative purchases of HDB flats. The current five-year period provides a good balance between the need to prevent speculation, and giving flat owners the flexibility in selling their flats after a reasonable period of occupation.
We thank Mr Goh for his feedback and suggestions.
Ignatius Lourdesamy
Acting Deputy Director (Marketing & Projects)
Housing & Development Board
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