BUILDING PROGRAMME FOR HDB PURCHASE FLATS (Acceleration)

Dr S Vasoo asked the Acting Minister for National Development whether he will give some details of the building programme for the Housing and Development Board purchase flats for the next 3 years and if there are further plans to accelerate the release of more new flats.

The Senior Parliamentary Secretary to the Minister for National Development (Mr Matthias Yao Chih) (for the Acting Minister for National Development): Sir, HDB's building programme has already been increased from 24,000 units in 1992 to 28,000 units in 1993, and to 30,000 units in 1994. The approved building programme for new HDB flats from 1994 to 1996 is around 30,000 flats per year. However, in view of the high demand for HDB flats, my Ministry is reviewing the building programme to see if it can be increased further.

Dr S. Vasoo (Tanjong Pagar GRC): In the light of more flats to be released, are prices going to be increased too?

Mr Matthias Yao Chih: Sir, in fact, why we cannot have too many flats being built in a year is precisely for the reason of rising cost. This is because when you have many contractors all competing for the same resource pool of workers or construction materials, there will be a pushing up of building costs. HDB will have to balance the desire to build more flats with the desire to keep the prices affordable. Therefore, the number will have to be very carefully managed. But the assurance is that we will try to meet the demand and keep the prices low and affordable.

Mr Chng Hee Kok: Sir, for the building programme, how is the number of flats decided? Is it based on the demand or is it based on some criteria set by the Ministry? From my understanding, the demand is very high at the moment, but we are building only 30,000 flats a year for the next three years.

Mr Matthias Yao Chih: Sir, the number is determined on the basis of various factors: (1) demand; (2) ability to clear the land and acquire it for such purpose; and (3) whether the infrastructure can support such a building programme. For example, sewerage plants will have to be built if suddenly we build a huge estate in some part of Singapore that does not have such a plant, roads, etc. Therefore, while we wish to build more flats to accommodate demand, we will have to take into account the other factors as well.

Mr Chng Hee Kok: The very fact that there is public perception that prices are rising and the constraint in supply is making the situation worse. In other words, with rising prices, a limited number of new flats, and more people jumping into the queue for flats, how do we find ways to make sure that we build enough flats to meet the demand and not to set targets like 30,000 flats, which is way out of line with public demand.

Mr Matthias Yao Chih: Sir, the targets are set from year to year to accommodate the increasing demand. It is true that when prices increase, both in the private sector and public sector housing, the desire to quickly own a flat is there. For those who think they can upgrade to a bigger flat of higher value, they want to do that sooner. The key issue is whether every new household, new family, newly married couple, will have a flat soon enough to start a family in. The Ministry is addressing this issue. The building programme and the allocation programme will address this issue primarily. Whether or not we can supply executive flats for everyone who desires one is a separate issue.

Dr Vasoo: Sir, is this target of 30,000 flats sufficient to meet the demand in the next few years? At the same time, has the average waiting time been reduced in the last few years?

Mr Matthias Yao Chih: Sir, the number of new households being formed each year is about 26,000. If you take the birth rate of 40,000-50,000 and divide it by two, and they get married, you will have about 25,000 to 26,000 marriages in a year. Our building programme of 30,000 flats will, in fact, cater to the entire group of newly-formed households in one year. However, we will also have to look at upgraders and people who, for various reasons, want to shift from one estate to another for work, etc. Therefore, the building programme for newly-formed households will take care of the demand from them. The HDB and the Ministry are looking at the allocation policy to see how best we can solve this problem for new households.

Dr Vasoo: Sir, what about the question of waiting time? Has it been reduced?

Mr Matthias Yao Chih: Sir, if the Member proposes that for one year we give all the new flats to new households, we can solve the problem in one year.

Dr Toh Keng Kiat (Nominated Member): Sir, may I ask what proportion of this new housing will be on the design-and-build scheme?

Mr Matthias Yao Chih: Sir, I do not have the data for this question about the design-and-build scheme. When the Question comes up, I will answer it.

Dr Wang Kai Yuen (Bukit Timah): Sir, how many years will have to pass before the current surge of demand can be satisfied?

Mr Matthias Yao Chih: Sir, about 60,000 applicants on the list already have an HDB flat of their own, or some housing of their own, not rented premises, but actually owned premises. Therefore, what we should look at is the issue of how best to cater to the needs of new households, and we are talking about 26,000 a year. Everybody else who has already owned his flat and wants to upgrade, downgrade or move sideways to other estates, will have to be looked at separately.

Mr Chng Hee Kok: Does it mean that the Ministry's policy is too liberal with upgraders for HDB flats?

Mr Matthias Yao Chih: Sir, many citizens who fulfil the criteria can put in their applications for a new flat. I do not think we should try to restrict people from wanting to upgrade or to move from one estate to another because of their job location. Everyone is free to apply for a flat and we will deal with it in the best way we can.