LOWER HDB FLAT PRICES (Request for)

Mr Chiam See Tong asked the Minister for National Development whether the Housing and Development Board will consider lowering its flat prices in line with the fall in prices in the private property market to make it easier for non-owners to own a home and for owners to upgrade to a better flat.

The Minister for National Development (Mr Teh Cheang Wan): Mr Speaker, Sir, the selling prices of Housing and Development Board flats are not determined by prices of private residential properties. They are based on the costs incurred by the HDB and the subsidy provided by Government. The present sale prices of HDB flats are heavily subsidized and are well below current market prices of comparable private flats. HDB prices are pegged at a level within the means of most Singaporeans who want to own a home or upgrade to a better flat. To lower prices means to increase the subsidy between market prices and the present HDB prices. Selling prices of new HDB flats are well below the market prices of old HDB flats. There is therefore no reason to further lower flat prices.

Mr Chiam See Tong (Potong Pasir): Would the Minister please tell this House whether the tender prices for the construction of HDB flats have fallen last year?

Mr Teh Cheang Wan: Mr Speaker, Sir, notice of a similar question has been given by the Member for Bo Wen which will be answered at a later date.

Mr Chiam See Tong: Mr Speaker, Sir, the Minister has again mentioned about this subsidy.

Mr Speaker: Are you going to ask a supplementary question or not, Mr Chiam?

Mr Chiam See Tong: Yes. I would like to ask: How is this subsidy given to purchasers of HDB flats?

Mr Teh Cheang Wan: Mr Speaker, Sir, the subsidy is calculated at the development cost incurred by HDB less the selling price. That is equal to the subsidy. For example, if the development cost of a flat is $60,000 and the selling price is $40,000, the subsidy is $20,000.

Mr Chiam See Tong: Mr Speaker, Sir, would the Minister please let us have, in writing, his calculation of the subsidy which, up to date, we have been unable to obtain from him? That is, could we have concrete instances where the subsidies are actually given?

Mr Teh Cheang Wan: Mr Speaker, Sir, under the new accounting system this is clearly shown. In fact, if the Member for Potong Pasir is not aware, he can read the Gazette Notification on the Housing and Development Board's 1986-87 budget. It is quite clearly spelt out in this budget that the gross loss on sale of flats under the new accounting system for the financial year 1985-86 is a probable Actual of $633 million. The budget for 1986-87 is $660,510,000. He can read this in the Gazette Notification.

Mr Chiam See Tong: Mr Speaker, Sir, the Minister has not answered the question. What we want from him is actual instances, for example, in the development of Potong Pasir estate, or any other estate if the Minister so wishes, what is the calculation to show clearly the subsidies that are given. Up to now we have not got such calculations yet. Can the Minister please oblige?

Mr Teh Cheang Wan: Mr Speaker, Sir, on the calculation of Potong Pasir estate, if I remember correctly, this has been given in this House.

Mr Chiam See Tong: No.

Mr Teh Cheang Wan: Yes. Look up the Hansard and he will find that it has been given in this House.

Mr J.B. Jeyaretnam (Anson): I have a supplementary question for the Minister. First of all, does the Minister realize that what he has said this afternoon is a mere repetition of what we have been hearing from him several times? Does the Minister know that sometime ago I asked whether he would appoint a committee to look into the whole cost of HDB flats? May I ask the Minister whether he will now agree that perhaps a quantity surveyor, an accountant, an architect, should be appointed to go into the whole question of the cost to the HDB in the construction of these flats?

Mr Teh Cheang Wan: Mr Speaker, Sir, I think it is unnecessary and a waste of time.

Mr Jeyaretnam: Does the Minister realize all his answers sound very unconvincing to the public?

Mr Teh Cheang Wan: Sir, similar questions have been repeatedly asked. Therefore, similar answers have to be given.