HDB'S POLICY ON BUILDING AFFORDABLE HOUSING

Dr S. Vasoo asked the Minister for National Development whether the Housing and Development Board has digressed from its policy to build affordable housing for people.

Mr Lim Hng Kiang (for the Minister for National Development): Mr Speaker, Sir, HDB has, and will continue to, provide affordable housing for the majority of Singaporeans. The Government's approach to public housing is to ensure that the housing needs of every income group are catered for. To this end, HDB provides a range of flat types, in various new towns, covering a wide range of prices.

In each booking exercise, buyers have a wide price range from which to choose from, even for the same flat type within the same new town. Buyers can thus choose flats within their means. As a general guideline, HDB flats are priced to ensure that 3-and 4-room flats are affordable to the average income household. Those with higher incomes can buy 5-room and Executive flats.

Based on the current average price of $106,000 for a 4-room flat, a young couple, both of whom have worked for about six years, with a current monthly combined income of $1,200, would have sufficient CPF funds to make the 20% downpayment as well as to service the monthly mortgage payment for a new 4-room flat. To afford a 3-room flat which costs about $60,000, a young couple, also having worked for about six years, with a current monthly combined income of $700 would have sufficient CPF funds to make the 20% downpayment as well as to service the monthly mortgage payments. The 1990 Population Census shows that 92% of households in Singapore have monthly incomes of $700, ie, 92% would be able to afford the 3-room flat and about 80% of households have monthly incomes of $1,200, ie, 80% can afford at least a 4-room flat. HDB flats are thus affordable to the majority of Singaporeans. HDB has not deviated from its mission of providing affordable housing for Singaporeans.

Dr Vasoo: Is the Minister of State aware of some public complaints that the prices of flats in the last five years have increased quite dramatically? They feel that these flats may not become affordable in future. How does he propose to advise potential buyers in addressing such a problem?

Mr Lim Hng Kiang: Our approach is to provide flats, particularly the 3-room and 4-room flats which are affordable, to most Singaporeans. More than 90% of Singaporeans can buy 3-room and 4-room flats. For those who want to buy 5-room and Executive flats, our approach is to provide a wide range of flat types covering all the price range and we leave it to the individual to determine what particular flat or which particular price range he wants to buy. My advice to young couples setting up home is not to go for the biggest Executive flat in Pasir Ris, which is the upper end of the price range, but to go for something which they can comfortably afford.