NEW HOUSING AND DEVELOPMENT BOARD FLATS

NEW HOUSING AND DEVELOPMENT BOARD FLATS:

(Subsidy): 3.

Ms Ellen Lee asked the Minister for National Development (a) whether a 30% subsidy is in fact true of all HDB flats bought direct from the HDB; and (b) how does the HDB explain the magnitude of the loss in value to some first-time buyers of new flats which had a purchase price of $320,000 to $350,000 in 1996-1998 but which value had dropped to $290,000 to $320,000 since 2004.

The Minister of State for National Development (Ms Grace Fu Hai Yien) (for the Minister for National Development): All new HDB flats are sold at a subsidised price, below the market value. The extent of subsidy varies with flat-type and market conditions. It is not a fixed percentage.

HDB flat prices are subjected to market forces. They move up or down depending on demand and supply factors similar to private properties. It is possible

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therefore for the prices of HDB flats to fall below their purchase price even with a subsidy. This was what happened when the property market suffered a severe downturn after the Asian Financial Crisis. Without the subsidy, the diminution in value would have been even greater.