HOUSING AND DEVELOPMENT BOARD FLATS (Increase in supply)

Mr Chng Hee Kok asked the Minister for National Development if he plans to increase the supply of Housing and Development Board flats in view of the strong demand.

The Minister of State for National Development (Mr Lim Hng Kiang) (for the Minister for National Development): Mr Speaker, Sir, the HDB has been monitoring the demand and supply situation for its flats very closely. In view of the strong demand for HDB flats, the HDB has in fact been stepping up its annual building programme steadily from about 24,500 flats in 1992, to about 28,000 flats in 1993. HDB will be stepping up its annual building programme further to about 30,000 flats in 1994.

The increase in the supply of flats will meet the demand. It will also not overstretch the capacity of the construction industry. Otherwise, prices will increase sharply. HDB will continue to monitor the demand for its flats and review the supply accordingly.

Mr Chng Hee Kok (Tampines GRC): Sir, to many houseowners, it is not good news. The Minister of State is talking about a 15% increase over last year. But right now, I understand that the demand is outstripping the supply by 20 to 1 in some areas. For example, in Tampines, for 5-room flats, there are 8,000 applicants for 300-over flats.

Mr Lim Hng Kiang: As I have explained in this House earlier, the profile of demand for HDB flats has changed drastically over the years. Between 50% and 60% of the applicants for HDB flats are upgraders, ie, they own their existing flats and they are looking for a bigger flat. These applicants are very location-specific. The Member mentioned Tampines. For example, in the July booking for HDB flats, there were 29,000 applicants for Tampines New Town, but we are only building 2,200 units in Tampines. There is no way we can build 29,000 units in Tampines. If you visit Tampines today, it is a built-up town and the remaining area is like a big construction site. So we will increase the supply of HDB flats in areas where the Government has enough land, in Choa Chu Kang, Jurong West, Woodlands, and we will open up new towns in Sembawang. But where there is a demand for 29,000 flats in Tampines, there is simply no way we can build 29,000 flats.

Mr Chng Hee Kok: The point, Mr Speaker, is that there is just not sufficient supply. The question I am asking now is this. At this date, what is the latest demand position against the current supply of 20,000 flats?

Mr Lim Hng Kiang: The situation in the other towns is within the planning parameters of HDB. In Choa Chu Kang, Woodlands and Jurong West, the profile is about five applicants to one flat. And new households applying for HDB flats will be able to book their flats within one year of their first application. The other increases in demand are very location-specific, ie, in the mature towns, in the central areas, as well as in Tampines. As I have explained earlier, there is no way we can increase the construction rate to meet the demand. There is just no land in these areas.

Mr Loh Meng See (Kampong Glam GRC): Sir, I am particularly concerned about the first-timers, the young couples who are getting married. Will they be treated separately from those who are upgrading from their existing flats? And also those who are in the rental flats and who want to purchase their own flats for the first time, will priority be considered for such category of people?

Mr Lim Hng Kiang: Sir, the priority scheme for first-timers as well as people upgrading from rental flats, in effect, gives them a one year head-start compared to the upgraders. If they apply for places where the Government has a big construction programme, like in Jurong West, Woodlands and Sembawang, they would get their flats within one year of first application.

Mr Chng Hee Kok: Sir, taking the Minister of State's point about the demand of 5:1 in less mature areas and 15:1 in Tampines, can we say that the demand now is about 10:1, which means that applicants may have to wait 10 years before they can get their flats?

Mr Lim Hng Kiang: The demand is very location-specific. In Queenstown, it is 22:1. The whole place is built up. The demand is there. As I have explained in this House, there are three ways in which we can allocate demand when there is limited supply. You can ballot, which we are doing now. You can queue, or you can tender. So take your pick.

Mr Chng Hee Kok: The question I am asking the Minister of State is that the numbers indicate that the overall demand is at least 10 times the supply. Am I wrong? Because you have a case of 22:1 in Queenstown, 15:1 in Tampines, and 5:1 in the less mature estates. So are we not talking about a demand of at least 10:1?

Mr Lim Hng Kiang: Sir, the Member does not seem to understand the situation. As I have explained, 50-60% of applicants are upgraders. They have their flats. They are quite happy staying where they are, but they put in an application to upgrade, provided they get where they want. So every time we have an estate put up in the mature new towns, the number of applications surges by 20,000 in that quarter. Similarly, for Tampines. There are 29,000 applicants, and I am sure many of these applicants only want Tampines and nowhere else. So they get balloted and, if they are lucky, they get Tampines. We are not going to build 29,000 flats in Woodlands and have them empty because the 29,000 applicants in Tampines would not take up flats in Woodlands. This happened in 1984. We are not going to repeat this.

Mr Chng Hee Kok: Sir, I really do not understand the Minister of State. Maybe I am a bit dense. If this number of applicants in Tampines is shifted to another area, the total demand remains. It is the same. In other words, the total demand far exceeds supply. That is my point.

Mr Lim Hng Kiang: Sir, when we have to close down Tampines, as we did in Pasir Ris, and if these 29,000 do shift to Choa Chu Kang, we will increase the supply in Choa Chu Kang, Jurong West and Woodlands accordingly. Today, we have catered enough for the upgraders. But we are not convinced that all the 29,000 who apply for Tampines would switch to Choa Chu Kang, Jurong West or Woodlands when we close down Tampines.

Mr Chng Hee Kok: Sir, I beg your indulgence. What is the latest total demand position versus the supply position in the last ballot?

Mr Lim Hng Kiang: We have booking exercises in four quarters, ie, four times a year. When we do not put up any flats in the mature estate, we get an average demand of 30,000, which we are building to meet this demand. So, on average, if you wait one year you will get your flats. Whenever we put up flats for booking in the mature estates, in Queenstown itself, the demand jacks up to 50,000. 20,000 new applicants come in to try their luck for these mature estates. That does not mean that we should increase our building programme to 50,000. We will increase our building programme to meet genuine demand.