National Development Minister Khaw to focus on first-timers and vulnerable families

Mr Khaw Boon Wan has outlined his priorities for the first two years of his term as the National Development Minister.

In his first speech on housing issues in Parliament on Wednesday, he said he will focus on the newlywed HDB first-timers and vulnerable families.

Mr Khaw said he is committed to help all newlywed first-timers earning below S$10,000 per month get their first HDB home as soon as possible.

In the past two years, home prices shot up by 30 per cent in the HDB resale market, and 50 per cent in the private housing market, driven by global liquidity overflows and an imbalance in housing supply and demand in the domestic market.

The government is building 50,000 HDB flats in the first two years. This is the equivalent of a new Ang Mo Kio Town.

If demand remains strong beyond 2012, Mr Khaw said there are resources and capacity to build more than 100,000 HDB flats during the current term of government. This may include starting Build-To-Order (BTO) project launches in the proposed Bidadari estate, which can potentially house up to 12,000 units.

Planning for a new HDB town in Tengah will also start. The new town could have 56,000 HDB units when fully developed.

While no BTO projects will be launched in Tengah during this term of government, Mr Khaw said the infrastructure like earthworks, roads, drains, sewers, and other facilities will be put in.

Mr Khaw said as long as construction costs do not rise dramatically, the BTO prices will stabilise.

And for families with household incomes of below S$1,500 per month, the government will ramp up the supply of rental flats. This includes opening the disused workers’ quarters at the former Tanjong Pagar train station.

It is estimated that there are about 16,000 first-timer families still waiting to buy a new HDB flat, and each year brings in 15,000 new applicants.

Currently only five per cent of BTO flats are kept for second-timers, even though they make up 40 per cent of BTO applicants.

By reducing the demand on the HDB resale market, resale prices should begin to moderate, benefiting other home buyers, like the singles.

As for calls by some industry players to remove the recent cooling measures for the property market, Mr Khaw said it is not quite time yet. That is because of the global economic uncertainties. He said the government will continue to monitor the market and make additional tweaks when necessary.

Source: Business Times – 19 October 2011