SALE AND RESALE OF HUDC FLATS (Motion)

6.00 pm

Mr Deputy Speaker: This motion* is subject to signification of support by at least one Member. Does the motion have the support of any other Member?

Mr Jeyaretnam: It does, Mr Deputy Speaker, Sir.

Mr Chiam See Tong: Mr Deputy Speaker, Sir, before I move my motion, I would like to thank the Leader of the House for extending the moment of interruption beyond 4.30 pm today. Mr Deputy Speaker, Sir, I beg to move,

*That this House views with regret the Housing and Development Board's refusal to remove all restrictions on the sale and resale of HUDC flats.

The Minister for National Development (Mr Teh Cheang Wan): On a point of order, Mr Deputy Speaker, Sir. Sir, the motion states,

'That this House views with regret the Housing and Development Board's refusal to remove all restrictions on the sale and resale of HUDC flats.'

The Housing and Development Board has not received any request to remove all the restrictions on the sale and resale of HUDC flats. Since the Housing and Development Board has not received any request, it stands to reason that it is not possible for the Housing and Development Board to refuse such a request.

Mr Deputy Speaker, Sir, you may wish to rule whether it is in order for the House to debate an imaginary Housing and Development Board's refusal.

Mr Chiam See Tong: Mr Deputy Speaker, Sir, it is obvious that the Minister refuses to read in the papers what is relevant. The reversal of policy of buying back the HUDC flats was announced on 5th July and that was a Saturday. If he had read the Sunday papers, he would have known that I, on behalf of my Party, amongst other things, have called on the HDB to remove all restrictions on the sale and resale of HUDC flats. We received no reply from the Minister in his walkabout, and the only thing he has told us was, "Yes. I have replied to one or two points in this article." But he has ignored this point, which is the most relevant point, and he has gone round saying, "No. We have not breached our faith." He said it was not a policy. It was just a practice. Assistance, is it? Is that what you have replied? Why did you not reply to this point? That is the reason why we are here? So he has committed himself to replying only part of the question but left the more important part out.

Mr Deputy Speaker: All right. I allow you to move your motion. You may proceed.

Mr Chiam See Tong: We do not do things just out of the blue, Mr Minister. We communicate in all kinds of ways.

Mr Teh Cheang Wan: Communication through the gutter press?

Mr Chiam See Tong: That is what you say, not me.

Mr Deputy Speaker, Sir, on 5th July, all of a sudden as usual, HDB announces - it never gives prior warning, it drops a bombshell - it does not want to buy back any more HUDC flats which are less than five years old. Naturally all those 216-odd people who wanted to resell back their flats to the HDB were not only very disturbed but were very angry, and some were even completely disgusted. This is evidenced by the response given in the press. You can just look at the press and see how disgusted the HUDC owners were. I will just quote one of them to show the type of reaction to the announcement of the HDB. There was a Bedok Reservoir resident who said he wanted to wash his hands of the HDB completely. He said, I quote:

'I have committed myself to a private property and I am going ahead. I would better advertise and try to sell my flat. I will probably not get the original price but I want nothing more to do with the HDB.' "Nothing more to do with the HDB." Can you see how disgusted he was of the HDB?

Mr S. Chandra Das (Chong Boon): Mr Deputy Speaker, Sir, on a point of order. Sir, if I read the motion correctly, it has got to do with sale and resale of HUDC flats. It has nothing to do with the buy-back policy of the HDB. Is the Member speaking on the motion or is he introducing some other subject?

Mr Deputy Speaker: Before I make a ruling, how do you define "resale"? Are you talking about buying back?

Mr Chiam See Tong: Well, there is a sale and, of course, there is a resale.

Mr Deputy Speaker: But you are talking about buying back.

Mr Chiam See Tong: Sale is a sale from the HUDC to the first owner, and then he wants to sell it again. There is nothing wrong with that.

Mr Chandra Das: There is no restriction.

Mr Chiam See Tong: There is nothing wrong with that.

Mr Deputy Speaker: All right, carry on.

Mr Chiam See Tong: I do not see why this House should be picking on things they do not understand. May I be allowed to continue?

We are on the topic of this sale and resale but we have to see why we are coming on to the sale and resale. A motion does not come out of the blue. There must be some relevant factors to it.

Mr Chandra Das: Then state it correctly.

Mr Chiam See Tong: I hope you do not interrupt me again. I am perfectly speaking relevantly. The more important issue in this matter that we are discussing is the credibility of the HDB. We have seen all the reactions, especially that particular resident from Bedok Reservoir. As far as he is concerned, and perhaps as far as HUDC flat owners of Phase 3 and Phase 4 are concerned, the credibility of the HDB is either near-zero or zero. Yes, I think it is important. The HDB must maintain a good credibility because they are housing 85% of the population of Singapore and it is of great concern to a vast majority of the people of Singapore.

The Minister, a Chinese scholar, I believe, would know Confucius well. Can you remember what Confucius said of a good government? There are three requirements - food, military equipment and trust of the people. Someone asked the sage, "Which one can you remove?" He said, "You can take off military equipment." Then another disciple came in and asked the sage, "Of the two, which one can you dispense with?" He said, "Food. Human beings must die. But without trust of the people, the ruler has no standing at all." I hope that the HDB will regain their credibility, otherwise they will have no standing with the people. I believe I have quoted that correctly.

Of course, the HDB's reason was that they have 1,170 (or about that number) vacant flats which they have built. This is the reason given by the HDB and they cannot take back any more. Of the 216 applicants whose flats are less than five years' old, and who want to sell them back to the HDB, the HDB has accepted 40 and they have approved another 26. If I am wrong, please correct me, Mr Minister. I believe out of the 40 that were accepted, 11 were re-sold by HDB to applicants. This is the reason given. The other reason given was that they have got no legal duty to take back the flats. They said that it is only a favour to HUDC owners. It is nowhere stated in any of the documents, whether it be agreement for lease, or lease, or memorandum of lease, that they have a duty to take back the flats. I will come to that later on.

When the property market was good, was firm and strong, at least the HUDC, then the HDB, put up its price. In 1983, I believe HDB jacked up the HUDC flat prices by 143%. HUDC flat owners supported the HDB in purchasing those flats despite the high prices. In Pine Grove, a flat costs as much as $340,000 and that is supposed to be a Government-supported type of development. If I am not mistaken, the Minister has been heard to say that HUDC flats are subsidized 30-40% by the Government and yet it is $340,000. If they are subsidized, why are there no people coming to buy your flats? Why do you have these thousand over flats with you? They are supposed to be subsidized. One would imagine that people will be rushing to buy them. So whether or not there is a subsidy, I think the Minister owes an explanation to the members of the public as to the nature of this subsidy.

The HDB has given their reason for building HUDC flats, ie, to give professionals long-term housing, give them a stake, so to say, in the nation and this is the overt policy of the HDB. I was reading the papers and curiously enough it is stated by the manager of an HUDC estate "that the formation of the HUDC can be described as a political move to provide the middle-income group with proper housing so that they could have a stake in that country." This is something, an eye-opener to me when I read this. The Minister has never told us this. It was someone else. He said that the only reason, we have been given this reason officially by the Minister, is that they provide reasonably priced housing for the middle-income group of Singapore. But he never mentioned that there was a political reason behind it.

I call on the Minister, in view of the fact that he has, I would say, gone back on his word, he has breached his faith in making the announcement on 5th July, at least the most decent thing he can do now is to remove all restrictions on the sale and resale of HUDC flats and I call upon him in this motion to do so. I think at least he will give those present flat owners a fighting chance to sell their flats. Out of the 216, I believe some of them took your policy for granted and they have, in fact, committed themselves to purchasing a private property and this group in particular will suffer hardship as a result of your sudden change of policy.

What have you done for all? Give a concession in return. You said, "We will give them more time to sell. If six months is not enough, we will give them one year, 1(r) years, two years." Is this a concession at all? If an HUDC flat owner cannot sell his unit in six months, I do not think he can sell it in two years in the current property market which is so weak. That is not a concession at all. Of course, the other concession is that people who want to purchase HUDC units can use 100% of their CPF Ordinary Account. But, as we know, there is already a Government policy which allows anyone to use 90% of his CPF Ordinary Account to buy private property. So if anyone can buy an HUDC flat with 100% of his CPF Ordinary Account, I am sure he can buy a private flat with 90% of his CPF account. I am sure he would have that much money. If he has the choice, I do not think he would want to buy an HUDC flat. So that is not a concession.

Of course, the other point the Minister often mentioned is the removal of the 30% levy. The rationale behind the removal of the 30% levy is this. They say, "Oh, HUDC flats are subsidized. So we have to have that levy." But if it is subsidized, why are you removing the levy now? I would imagine that would not be the reason. The reason for the levy in the past is because the owners could sell their units at a highly appreciated price and therefore, when they sell it, after paying 30% of the gross price to the HDB, it will still appear good. But now, if anyone who owns an HUDC flat wants to sell his flat, can he make a profit on it? No. He is lucky if he can get his cost back. He probably has to suffer a loss. Can you imagine an owner selling it at a loss and the HDB wants to levy 30% on the gross price and say, "Look, because this flat has been subsidized by us."? I think there will be an uproar among HUDC flat owners. I would not think that he would dare to implement that policy and I do not think it is a concession either. So what concession has he given? As far as we can see, nothing.

I would call upon him, if he really wants to do something for these people who have got these HUDC flats and who want to sell them back and HDB is unwilling to take them back, to at least give them this concession - remove all restrictions, put the HUDC property at par with private property. In particular, there are many singles who want to buy a property and cannot qualify. Perhaps this is one area where it would be helpful when he removes all restrictions on the sale and resale. It was justified perhaps to place restrictions on the sale and resale of HUDC property in the early days. It was true when the market was very good, prices were galloping upwards. So anyone without any restriction could make a quick buck. He could speculate on HUDC property and, of course, it is not fair for people to make money on HUDC property. But what is the situation now? It has completely changed. All those reasons that were given by the HDB before are no longer valid. There is a glut of flats and condominium units now, but not at that time. So there is hardly any difference between private flats, condominium units and HUDC units. In fact, I have personal knowledge that some condominium units are even cheaper now than your subsidized HUDC flats. So there is really no ground at all to impose your restrictions. So the only logical thing to do is to remove all your restrictions.

Let us look at these 1,000-odd vacant units. Is it the fault of the HUDC flat owners? It is not. And they are penalized. HDB has over-estimated the demand and kept on building when the demand is not there. The HDB has built in excess and now they are saddled with this big number of flats and the poor HUDC flat owners have to suffer for it. It is not a case of HUDC flat owners unloading big numbers of flats to the HDB and as a result the HDB has to carry big numbers of flats, and they say, "All right, please stop selling back to us. We are already buying back too many units." If that is the case, there is some justification. But that is not the case. The case is that HDB on its own has built too many flats and therefore it is unable to buy back HUDC flats. In fact, I have just mentioned that they bought back only 40 units, and out of that 40 units HDB has managed to sell 11 units, leaving only 29. That is all they are holding. Why can the HDB not take back more flats from the 216 people who want to resell them back to the HDB? Why can they not do so? Of course, if you look at it from another point of view, these 1,000-odd vacant flats which the HDB is holding are causing a big loss in terms of interest and later on when the property market does improve - I have read in the Property Market Consultative Committee's report which says that even in December 1990 the demand will not be there - there will be an excess of flats even by that date. So the HDB is going to have a big problem trying to unload these 1,000-odd HUDC flats and think of the amount of interest lost. When the time comes to sell these flats, I am sure the prices will have to be jacked up to recover the interest lost. There is no doubt about that.

The other point is the question of breach of faith. Of course, the Minister has denied it. There is no breach of faith. But I am afraid those HUDC flat owners who cannot sell their flats back to the HDB think otherwise. It has been clearly reported in the papers. I would contend that there is a breach of faith on the part of the HDB. The HDB has set a precedent when they say, "Yes, we will continue to buy back." And they have done so and people expect it. How else? So it is a question of trust. I think the HDB has really let down the HUDC flat owners. They feel that they have been done in. What is the protection or fall-back that the HDB is relying on? On legal ground. Let us look at whether or not they have a legal ground. In my view they have not. I would say that, in fact, the HDB is legally bound to buy back those flats. How do I come to that conclusion? That the HDB has a policy; it is an announced policy. I hope the Minister is not denying that because in Parliament on 22nd March 1983 he had clearly announced the policy of the HDB. "Mr Teh said during the debate on the fund allocations to his Ministry that the policy for HUDC flats which are now, he says, 'are governed by the same rules applied to HDB flats.'" I do not think he will deny that. And we have established yesterday, I believe during Question time, that HDB has a rule. As far as HDB flats are concerned, they have a rule that they will buy back HDB flats which are less than five years old. If we go by what he had said on 22nd March 1983, and I have to quote the Minister for Home Affairs earlier on in the debate, he said, "Government stands by what it says." I have got it here. I hope the Government will stand by what it says, in the case of HDB. If HUDC policy must comply with the policy of the HDB or that HDB rules are applicable to HUDC, then the HDB must, by this ruling, buy back HUDC flats. Because there is a rule for HDB, it must also follow that this rule must follow for the HUDC. If there is a rule, then we go back to what is written in your agreement for lease which says that (this is clause 12 which I have mentioned earlier):

'In the case where the purchaser is required under any term condition ["under any term condition" means the condition term of the buy-back of HDB flats within five years] herein to transfer, sell, assign, surrender or cause the flat to be vested in the Board, the consideration for such transfer, sale, surrender or assignment shall be the purchase price of the flat together with the value for such improvements made thereto as determined by the Board and accepted for purchase by the Board or the value of the flat and of such improvements as determined by the Board, whichever is lower. The Board's determination of the value of the flat and/or the improvements shall be final and conclusive and shall not be called into question by the purchaser.' So it would appear that if they want to sell it back or resell or assign, then they must sell it to the HDB at the original purchase price or at a price determined by the HDB. I do not think the HDB will want to buy back at a lower price than the original cost price because they themselves have said that they are 30-40% subsidized. I would say that they have a legal duty to buy back the flats.

Why do so many of these HUDC flat owners want to so quickly unload their units back to the HDB? It is quite obvious. Because the market value for property has now dropped drastically. And if it is at par or even if they lose a bit of money, they do not mind selling it off. Why? Because they are not tied down with so many rules and regulations of the HUDC. And they do not have a free car park. Yes, they have to pay $25 a month for their car park. Maybe the Minister does not live in an HUDC or HDB flat and so he does not realize that. This car park is a big problem for HUDC owners. Their friends come on Sunday and they have to rush down and say, "I have got to go and renew my car park coupon". All the hassle. Whereas living in a private property, you just come in and park your car and that is all. That is the reason why they want to sell off.

As I have said, I have brought up this issue because I think you should not only give a fighting chance in view of the change of policy of the HDB, but more important is the credibility of the HDB which is really at stake. Mr Deputy Speaker, Sir, I would like to have a Division on this motion because I think it is important ---

An hon. Member: Your supporter has gone. You are alone.

Mr Chiam See Tong: --- to see how HUDC owners vote on this motion.

I think there is another important point which I have to make, my final point, Mr Deputy Speaker, Sir. The Minister has said that there is no legal duty for HDB to buy back the HUDC flats. Assuming, Mr Minister, that if there is a legal duty, there is a binding contract, there is a clause which says that the HDB has to buy back the flat within five years, will the HDB honour its contractual terms? Assuming there is a contractual term which the HDB has gone into, will they break it?

The Minister for National Development (Mr Teh Cheang Wan:) Of course, not.

Mr Chiam See Tong: Please. You have stated that there is no contractual clause. So you are not legally bound.

Mr Deputy Speaker: Mr Chiam, can you please address me and not the Minister.

Mr Chiam See Tong: My apologies, Mr Deputy Speaker.

Mr Deputy Speaker: All right. You can continue.

Mr Chiam See Tong: I was saying that assuming there is a clause and there is a binding contract, will the HDB honour its contractual terms? Is there a precedent in which - this is assuming again - the HDB has attempted to break its contractual terms with flat owners?

I am much obliged, Sir.

Question proposed.

Mr Teh Cheang Wan: Mr Deputy Speaker, Sir, I rise to oppose the motion and ask the House to reject the motion.

The Member for Potong Pasir talked at length about the buying back of HUDC flats. In fact, this matter has been very extensively discussed for a long time, I think more than a month. The arguments of the HUDC owners as well as the HDB have been widely publicized together with the views of the press, the people who wrote letters to the press and also the debate in the last two or three days during Question Time. So this matter has been very extensively discussed and I do not wish to repeat the arguments again.

However, there are a few points on which the Member for Potong Pasir is attempting to mislead the public. I will explain those few points. The first point is that in 1983, when HDB offered HUDC flats for sale at that time, I said that the selling price of those HUDC flats was about 30-35% lower than the market price for similar type of flats sold by the private developers. That is a statement of fact. If the Member for Potong Pasir or anyone wants to check the price, he can look at the selling prices in the Straits Times of properties advertised for sale by the developers or by individual owners. They will come to the conclusion that what I said was true. For that reason, HDB was able to sell 4,105 units of HUDC flats. If the HDB prices were not attractive, it would not be possible for HDB to sell such a large number of HUDC flats, 4,105 units. That is the answer I gave to the Member for Cairnhill yesterday about the total number of flats sold by HUDC.

Again, the Member for Potong Pasir is trying to confuse the public by saying that the HDB has over-estimated the demand for HUDC flats and therefore has HDB ended up with 1,170 vacant flats. This is quite untrue. In 1982, when HDB assumed the responsibility of building HUDC flats, there were 5,800 applicants on the waiting list to buy HUDC flats. HDB had to assume that these applicants had applied for these HUDC flats in good faith. They had applied for these flats because they wanted HUDC flats. And it is the duty of the HDB to build these flats for them. Therefore, HDB proceeded to build more than 5,000 flats.

Mr Chiam See Tong: Profit motive.

Mr Teh Cheang Wan: Not profit motive. HDB's responsibility is to provide housing. Our first responsibility is to provide flats for the citizens under our Home Ownership Scheme. So anybody who applies to HDB to buy a unit of flat, it is the responsibility of HDB to build for him or her a unit of flat. Therefore, HDB proceeded to build more than 5,000 units of flats. In fact, HDB has built 5,275 units of flats. That was the answer I gave to the Member for Cairnhill yesterday for the 5,800 applicants on the waiting list. Unfortunately, from 1982 up to now, 1986, during this period 4,900 HUDC applicants withdrew their applications from the HDB.

I have explained again and again in this House that HDB takes at least four years to build flats. It has to clear the land, to do the piling, to get the contractors to build the flats. It takes altogether four years to complete the flats. But it takes only a few hours for a person to apply for an HDB flat. He comes to the HDB counter, signs the necessary forms and he is registered as an applicant. At the same time, he can also withdraw. He can cancel his application easily. He just comes to the HDB counter and says that he has decided not to apply for the HDB flat, and he withdraws. So 4,900 applicants withdrew from the HUDC waiting list and therefore HDB is landed with these 1,170 units of flats. These applicants withdrew when these flats were built half-way. And HDB could not stop the building of the flats because HDB had already entered into the contracts. HDB could not tell the contractors, "Sorry. My applicants have withdrawn and therefore we stop building." It is not possible. HDB had to go ahead and complete the building. That was the reason why we ended up with 1,170 units of flats and this was because the public who had applied for HUDC flats had withdrawn their applications.

The Member for Potong Pasir is trying to mislead the House as well as the public by saying that HDB had blindly over-estimated the demand for HUDC flats and therefore had built more flats than necessary. In fact, we built less. There were 5,800 applicants on the waiting list and the HDB built only 5,200 flats. We built less than the number of applications. But unfortunately so many applicants withdrew from the waiting list and it landed the HDB with this large number of vacant flats.

Another point which the Member for Potong Pasir was trying to mislead the public is by saying that in his considered legal opinion, the HDB ---

Mr Chiam See Tong: I did not say that.

Mr Teh Cheang Wan: He did not say "considered legal opinion"? Then he is guessing. Is it his legal opinion or he is guessing? I must make sure.

Mr Chiam See Tong: Those are your very own words.

Mr Teh Cheang Wan: He is guessing. The Member for Potong Pasir is guessing. He is guessing that HDB ---

Mr Chiam See Tong: Mr Deputy Speaker, Sir, I did not say "guessing" at all. Please do not put words in my mouth.

Mr Teh Cheang Wan: All right, what did he say?

Mr Chiam See Tong: I said that as far as I can see, there is a legal binding document.

Mr Teh Cheang Wan: Mr Deputy Speaker, Sir, the Member for Potong Pasir said as far as he can see, so it is only the eye, not opinion. As far as he can see with his eye and not his opinion, the HDB is legally bound to buy back these flats. Am I right?

Mr Chiam See Tong: Mr Deputy Speaker, Sir, when we say "as far as we can see", it does not mean that we are looking. What we are saying is that as far as the words go what you have stated is a matter of policy - there is a legal duty on the part of the HDB to buy back the HUDC flats which are not more than five years old. Perhaps the Minister does not really comprehend the English language.

Mr Teh Cheang Wan: Mr Deputy Speaker, Sir, my legal officer, not me (I am not a legal man) and also the Attorney-General's Chambers have advised HDB that it is under no legal obligation to buy back these flats. So if the Member for Potong Pasir thinks that they are wrong, that is, the legal officer who advised HDB is wrong, the AG's Chambers is wrong, then I suggest the Member for Potong Pasir take this matter to court to see who is right, whether HDB is legally obliged to buy back the HUDC flats. I am quite sure if the Member for Potong Pasir is able to prove that legally he is right, then I think there would be a considerable amount of business for him.

Mr Chiam See Tong: May I have a word of clarification, please. Does not the Minister consider his own policy binding on him? Does he not think that?

Mr Teh Cheang Wan: Yes, of course. I do not think that I have ever said that HDB wants to buy back the HUDC flats.

Mr Chiam See Tong: We go by your policy.

Mr Teh Cheang Wan: I did not say that. I think last Sunday I have explained to the reporters why HDB buys back the HUDC flats. If the Member for Potong Pasir has not read the newspaper or is not very clear, perhaps I would have to waste some of the time of this House by repeating. HDB is under no legal obligation to buy back the HUDC flats.

Last year for various reasons some of the HUDC applicants approached HDB for assistance in selling their HUDC flats. They cannot sell these flats because they know that under the HUDC rule anybody who buys an HUDC flat cannot sell it to anyone within the first five years. So they approached HDB for assistance. At that time HDB officers considered that since there were more than 1,500 applicants on the waiting list for the HUDC flats, therefore they could help these people by buying back a few units of HUDC flats and offered them for sale to the applicants on the waiting list. Therefore this was a special assistance offered by HDB to the HUDC owners as well as to the applicants on the waiting list who wished to buy the old HUDC flats which were built in a good locality. Unfortunately this assistance has been misinterpreted by some HUDC flat owners as a buy-back-policy. This is a misinterpretation by the owner and the Member for Potong Pasir is trying to build on this misunderstanding and turn it into a policy of the HDB. I wish to repeat here, that the HDB has no such policy of buying back HUDC flats.

Just imagine, what purpose can be served for HDB to buy back a large number of HUDC flats and keeping them vacant? Is it not a waste of money? Is it not going against the Government policy of homes for the people? HDB has taken great trouble to build the HUDC flats. And after building these HUDC flats, HDB then sells to those applicants on the waiting list who want to buy these flats. After that, HDB buys back these flats and keep them vacant. Do you think any responsible government organization can adopt such a policy? Certainly not. HDB has bought back these flats because at that time there were a large number of applicants on the waiting list who wanted these flats. At present we all know that the waiting list of HUDC flats has gone down to only 180. And no one on this waiting list wants to buy old HUDC flats. Therefore, HDB cannot continue to assist them. This is very unfortunate. HDB's assistance is not only not appreciated but has been misunderstood. In fact, there is a Hokkien saying: Ho sim hor dui chim. That is precisely what happened to the HDB. HDB is trying to help the HUDC applicants and the end result is that they are blamed and the Opposition given an opportunity to try and tarnish the image of HDB.

Sir, this motion of the Member for Potong Pasir says that he regrets the HDB's refusal to remove all restrictions on the sale and resale of HUDC flats. I would like to say that HUDC flats are the best public housing units built by the Board. That means they are the largest public housing and are provided with the best finish. However, this is part of public housing under the Home Ownership Scheme. Since it is public housing, they must be governed by the rules of public housing. In fact, the rules governing HUDC flats are considered the minimum rules required or minimum restriction, if the Member for Potong Pasir wants to term these rules as a restriction. It is the minimum restriction or the minimum rules required for this Home Ownership Scheme. The first rule is that the buyer of an HUDC flat must be a Singapore citizen. This is very fair because HDB is the public housing authority and it is building flats for the people. So the buyer must be a citizen. The flats can also be sold to approved permanent residents, ie, those who in the Government's opinion are able to make a good economic contribution to Singapore. They are allowed to buy, except that when permanent residents want to buy they have to pay 10% higher in price, and they also have a longer waiting period than the citizens.

The second requirement is that the applicant must have a family nucleus because the flats are sold to the people with a family. For those singles who want to buy an HUDC flat, they must be at least 40 years old. But this restriction is different for HDB and for HUDC. Singles are not allowed to buy HDB flats but they are allowed to buy HUDC flats. This is the difference that I would like to point out to the Member for Potong Pasir. So I am saying that although HUDC flats are governed by the rules of HDB, they are not identical. If they are identical, then singles who cannot buy HDB flats should also not be allowed to buy HUDC flats. But singles are now allowed to buy HUDC flats. This proves that a lot of the rules of the HDB and HUDC are similar but they are not identical. In other words, not all the rules are the same.

Another difference is income ceiling. For HDB flats the family income ceiling is $4,000 per month, but for HUDC flats the income limit is $6,000. But the Member for Potong Pasir is trying to build up a case that they are the same. From these few points that I have mentioned, you can see that the rules for HDB and HUDC are not the same. They are different.

Non-ownership of a private property. This means that if a person owns a flat or a bungalow or a residential house, then he is not qualified to buy a public housing flat. This is because he already has a place to live.

Then the rules on the occupation of the flat. Anybody who buys an HUDC flat must use it for his own residence. This is fair enough. It means that Government is building flats for the people to live, not building flats for the people to rent it out. If anybody wants to invest in residential property, then he should buy a condominium flat or a bungalow or be like the Member for Potong Pasir who, I understand, owns several flats for rent.

Anybody who buys an HUDC flat must have stayed in it for at least five years before he is allowed to sell his flat to an owner of his choice. This condition is also the same for the HDB flats. The owner must live there for five years before he can sell his flat. Here, because of the requests of the PAP Members for a relaxation of the rules, HDB has relaxed it to allow owners of HUDC flats who have been living in them for less than five years to sell their flats. This is a concession which is not given to HDB flat owners. Again a different rule governing the HUDC and HDB. HUDC owners now can sell their flats to buyers of their own choice, provided the buyers are qualified. But this privilege is not given to HDB owners. Again, this shows that the rules for HDB flats and for HUDC flats are different. On the levy, Government has done away with the levy. Those owners who sell their HUDC flats within the first five years pay no levy to the Government.

From these, Members can see that the restrictions placed on HUDC flats are, in fact, the minimum restriction that is required for public housing. That is a very reasonable restriction. Therefore, I request this House to reject the motion proposed by the Member for Potong Pasir.

Mr Chiam See Tong: Mr Deputy Speaker, Sir, I think there are two points which the Minister has not answered fully. First, the conditions laid down for the sale of HUDC flats in the earlier years. The reasons for all these conditions, I have already mentioned, are not valid today. Property prices have dropped to almost at par or even sometimes lower than HUDC flats, and there is also a glut of condominium units as well as flats. Therefore, there is no possibility of any HUDC owner going to buy an HUDC flat with a view to making a profit or speculating on it.

The Minister says that it is a Government policy to provide for public housing. When he says that, there is an assumption that prices of public housing must be cheaper than private housing, otherwise why would anyone be given a choice? It is obvious. Public housing in the earlier days, as the Minister has said, was 30-35% lower than private housing. That is very good. I applaud that. But now that the prices are almost equal and, in fact, even less, what is the rationale for this so-called public housing? There is no benefit at all in buying public housing. Unless there is a valid reason, they should not still hang on to all these conditions.

The other point I would just like to bring up is in regard to the binding contract which I have mentioned and which the Minister has not answered. What I was saying is that if there is a binding contract on the HDB, does not the HDB ever break its own contractual terms?

Mr Teh Cheang Wan: Mr Deputy Speaker, Sir, I think the Member for Potong Pasir has missed a very important point. I have repeatedly said on many occasions that the policy of public housing, that is the HDB policy, is to enable Singapore citizens to become home owners. Therefore the Government is building public housing up to HUDC level, and sell to the people at an affordable price. There is no point for Government to build the flats to sell to the people when people cannot afford to buy. Therefore, this profit motive is not the primary consideration. The primary consideration of HDB is to make sure that our citizens are able to own their flats. And if it so happens that five years later they sell their flats and make a lot of money, good luck to them. But if five years later, they sell their flat and make less money, well, we cannot help it. It is not the primary objective of the HDB to enable HDB flat owners to make a profit. HDB's primary objective is to build comfortable homes, ie, to build good housing, for the citizens of Singapore. I am still confident that HDB will eventually be able to sell these 1,170 units of the vacant HUDC flats, because most of the HUDC flats are priced at a reasonable price although ---

Mr Chiam See Tong: I have to make a clarification. I hope the Minister is not misleading the public by saying "I have a hope that HUDC flats can be easily sold." The report of the Property Market Consultative Committee does not show that. There is going to be a glut, even by December 1990. There are two scenarios. One scenario is that projects already commenced, when completed, will make for nearly 8,000 residential homes in excess. The other scenario is that, if all approved projects are completed, will leave us with more than 14,000 units in excess. What then is the basis of your saying that you have confidence that these units are going to be sold? Just tell me that.

Mr Teh Cheang Wan: The pricing of our HUDC flats is a reasonable pricing. As I have answered the Member for Cairnhill yesterday, 70% of HUDC flats are priced at below $220,000 per unit. In spite of what the Member for Potong Pasir has said, I am confident ---

Mr Chiam See Tong: You are confident?

Mr Teh Cheang Wan: Yes, I am confident that HDB will sell the HUDC flats eventually. But I am not suggesting that it will be sold very quickly. If it is going to be sold very quickly, then perhaps this problem of buying back will not arise because HDB can continue to assist these HUDC flat owners by buying them back if the HUDC flats could be sold so quickly. In fact, this is the same side of the coin.

Mr Chiam See Tong: You have not answered my other queries, please, about the binding contract. Assuming there is a binding contract, will the HDB not break it, please?

Mr Teh Cheang Wan: Mr Deputy Speaker, Sir, there is no point for me to answer the Member for Potong Pasir on an imaginary case. I mentioned earlier that if HDB is legally obliged to buy back the flat, the case is very clear, HDB has to buy back the flat. How can HDB refuse to buy back the flat if it is legally obliged to buy back the flat? It is quite ridiculous.

Mr Chiam See Tong: It is not ridiculous. I have two letters here from the HDB which show that they break their own contract. HDB has gone into a binding contract with a purchaser of one of its flats at $51,900 and it wants to go back on its words by insisting that the buyer now pays more. There is already a binding contract. The HDB insists that he now pays $61,100. If you do not believe me, you can check it out. I have got two cases but there are many other cases. They have come to me at my Meet-the-People sessions.

There is another case of a binding contract for $42,600 and the HDB wants to go back on its contractual terms and force the poor chap to pay $46,400. This is clear-cut proof that HDB has gone back on its contractual terms, and please do not tell us that it is a hypothetical case. I am not speaking about hypothetical case. I am speaking of concrete cases here. HDB and HUDC flats are all governed by HDB rules.

Mr Teh Cheang Wan: I am a bit confused. I thought that we are talking about HUDC flats. Suddenly I am told that it is HDB flats. Mr Deputy Speaker, Sir, I think this is quite a clear case. I do not think we should waste too much of Parliament's time. If there is any individual case that HDB is legally in the wrong, then HDB has to buy back. HDB has no intention of breaking its legal obligation. If there is a legal obligation on the HDB to buy back, then HDB will buy back, as I mentioned, including the HUDC flats. I mentioned yesterday that HDB has undertaken to buy back 26 HUDC flats. HDB will buy them back. Anything that HDB is legally obliged and has undertaken in writing, HDB will carry out that undertaking. There is no question of Government breaking its own law or that the HDB does not follow the laws of Singapore. There is no such question. But if the Member, as an MP for Potong Pasir, is acting for his constituents, he can refer this case to HDB. HDB's legal officer will look into it and if, legally, HDB has to buy back or has to pay whatever amount is due, HDB will pay. But if the Member for Potong Pasir is acting as a solicitor for these people ---

Mr Chiam See Tong: I have got no pecuniary interest at all.

Mr Teh Cheang Wan: No? I am saying that if he is acting as a lawyer for these people, then please take HDB to court.

Mr Chiam See Tong: Mr Deputy Speaker, Sir, as I said, the issue here is the credibility of the HDB. The Minister has not satisfactorily answered my query. I have put the question to him. He says, "It is hypothetical. We will surely be bound by our contractual terms." But I have evidence here that, even if you have the contractual terms, you are breaking them. You can break one set of contractual terms, why cannot you break, in the face of your 1,170 excess units?

An hon. Member: HUDC.

Mr Chiam See Tong: They are governed by the HDB. They are the same.

Mr Teh Cheang Wan: Mr Deputy Speaker, Sir, I do not think we can continue to argue this. As I have explained very clearly, if HDB is legally in the wrong, the Member for Potong Pasir can send the case to HDB and take it up with HDB's legal officer. And if HDB is legally obliged to buy back the flat at whatever price that has been agreed, the HDB will pay that sum of money. There is no question on that. If the Member for Potong Pasir considers that HDB is breaking the law and refuses to pay, then I would suggest that he take HDB to court.

Mr Chiam See Tong: Is your word more important than the legal officer?

Mr Deputy Speaker: Order. The Question is,

'That this House views with regret the Housing and Development Board's refusal to remove all restrictions on the sale and resale of HUDC flats.' As many as are of that opinion, say "Aye".

Mr Chiam See Tong: Aye.

Mr Deputy Speaker: To the contrary, say "No".

Other hon. Members: No.

Mr Chiam See Tong: Division, please.

Mr Deputy Speaker: Do you really want a Division?

Mr Chiam See Tong: I want to know how some Members will vote.

Mr Deputy Speaker: I distinctly heard only one "Aye" from you. If you want, we can just record it.

Mr Chiam See Tong: All right. Since the time constraint is there, it is all right.

Mr Deputy Speaker: The Noes have it.

Motion accordingly negatived.