HOUSING AND DEVELOPMENT BOARD FLATS

HOUSING AND DEVELOPMENT BOARD FLATS:

(Housing loans): 2.

Mr Zaqy Mohamad asked the Minister for National Development if the Ministry will consider redefining asset enhancement to allow the second subsidised HDB housing loan to be based on housing valuation and not on the number of rooms a flat has, as it can be considered to be a housing upgrade if an owner of a flat in a suburban area purchases another flat in a better location closer to town.

The Parliamentary Secretary to the Minister for National Development (Dr Mohamad Maliki Bin Osman) (for the Minister for National Development): Mr Speaker, Sir, HDB provides a maximum of two concessionary loans for each eligible citizen family to assist them to buy HDB flats. The first loan can be used to purchase any type of flat according to the family's needs and affordability. The objective of the second concessionary loan is to help facilitate social mobility among HDB lessees, especially those with larger households and, hence, need to upgrade to a bigger flat type.

It would not be appropriate to use the market value of a flat to determine a family’s eligibility for a second concessionary loan. Such a move would not serve the social objectives being promoted by the existing policy. Moreover, this would subject flat owners to much uncertainty about whether they qualify for a second concessionary loan, as the value of the flat is not static and may fluctuate according to changing market conditions and other factors.

Mr Zaqy Mohamad (Hong Kah): Sir, the term "asset enhancement" may be outdated because someone with a larger flat which is 15 or 20 years' old in the suburban area has a lesser chance of asset enhancement than, say, a second flat bought in an urban area which has a larger potential to enhance its return of assets.

Dr Mohamad Maliki Bin Osman: Sir, I think the policy of giving the second concessionary loan is not specifically about asset enhancement. It is really about social mobility, to encourage lessees to upgrade to a bigger flat. If we define social mobility as the size of the flat, I think people will generally accept that a 3-room flat moving up to a 4-room flat is an indication of social mobility. The value of a flat varies. Mr Zaqy has rightly pointed out that the location determines the value of the property.

For us, by definition today, we see social mobility as defined by the size of the flat. I have encouraged lessees to upgrade to a bigger flat to facilitate social mobility, so that they can have a bigger flat when their children grow up and need bigger and more space within the flat.