PUBLIC HOUSING DEVELOPMENT PROGRAMME

Mr Tay Beng Chuan asked the Minister for National Development what is the current demand for public housing and whether the Government will revise the public housing development programme to match the actual demand for the next 5 to 10 years.

The Minister for National Development (Mr Mah Bow Tan): Mr Speaker, Sir, in the first nine months of this year, HDB received 9,600 applications under its Registration for Flats System (RFS). The average monthly application for new flats this year therefore works out to about 1,100 per month, compared to about 800 in 1999 and 700 in 1998. As at September 2000, there were 35,600 applicants on the waiting list for HDB flats.

HDB will continue to monitor the demand closely and adjust its building programme according to the demand.

Mr Tay Beng Chuan (Nominated Member): Sir, it appears that HDB has achieved its primary role of providing affordable housing to most Singaporeans. Is it time now for HDB to reduce its role, ie, to give the private sector more opportunities to meet the increasing sophisticated housing demands of Singaporeans?

Mr Mah Bow Tan: Mr Speaker, Sir, I think there is a role for both the public and the private sectors to play in housing our population. In fact, the HDB has more than achieved its purpose of creating communities where our people can live in good quality public housing. At the present moment, more than 85%, roughly 86%, of our people live in public housing. It has been discussed in both the public and private domains that a long-term target is to have more Singaporeans living in private housing. Indeed, this, I believe, is the aspiration of many Singaporeans, to be able to upgrade to private housing.

In the 1991 Concept Plan, for example, there was discussion about increasing the mix of private housing vis-a-vis public housing. This is now currently under discussion in the present Concept Plan review and this is where we will be discussing the matter more extensively - URA together with members of the public and other interested parties. When that discussion is complete, I think we will have a rough idea of which direction we are heading.

Mr Kenneth Chen Koon Lap: May I ask the Minister, now that the number of applications for HDB flats has lessened and the waiting time is less, can HDB give a more accurate completion time? There are a lot of applicants who are told of a certain time they can take over the flat, but now, for example, they are very often told that in one year or 11/2 years the flat will be ready, and they get panicky because they are not ready financially or physically. Can HDB give a more accurate target date for the completion of the flats?

Mr Mah Bow Tan: Mr Speaker, Sir, I think the Member's point is a valid one. In fact, we have been receiving quite a lot of feedback from Members of Parliament that, where in the past, applicants had to wait for a long time for their flats, now they are actually getting their flats faster than they want them, primarily because they have not been able to accumulate enough savings in their CPF in order to pay for the downpayment. I think it is a happy state of affairs, in some ways. But it is also incumbent upon the HDB now, with slowing demand and with greater control over the building programme, to be able to monitor more closely the progress of the building programme and to therefore give a more accurate assessment, as the Member has mentioned just now. HDB will be looking into ways and means of matching supply and demand more accurately.

Mr Heng Chiang Meng (Cheng San): Sir, in relation to the Minister's answer, I believe that the HDB has a scheme to allow the 20% deposit payment to be made in two instalments for those who cannot afford it. May I ask the Minister to extend this to 5-room flats too?

Mr Mah Bow Tan: Sir, this change or revision to the policy of allowing the deposit of 20% to be split into two instalments was primarily to allow younger couples who are not able to afford the 20% downpayment to therefore get the HDB flat, as it were. The reason why the decision was taken to restrict this concession to the 4-room flats was that if you are actually applying for a 5-room flat and therefore your deposit is larger, then affordability should not be in the picture. Therefore, in so far as this being a concession is concerned, the relaxation is only for the 4-roomers. It is a question of affordability as well as being able to get their flats faster.

Mr Heng Chiang Meng: May I remind the Minister that because of the shorter waiting period as well as the reduced CPF payments due to the economic crisis, the ability to build up enough balances in the CPF for the 20% deposit has been greatly impaired. In that case, may I again ask the Minister whether he will consider the 5-room option too, Sir?

Mr Mah Bow Tan: Sir, as I said, it is a question of affordability. And if it is a matter of not being able to build enough balances in the CPF for a 5-room flat, then I would suggest that the young couple consider a 4-room flat instead where together with the split, delayed or deferred instalment, I think affordability would no longer be an issue.

Dr Wang Kai Yuen (Bukit Timah): In meeting the demand for housing of Singaporeans, may I ask the Minister to clarify the HDB's position on the building of smaller and smaller flats while it seems that Singaporeans have a great energy for retaining the existing flats or even bigger and bigger flats?

Mr Mah Bow Tan: Sir, this matter came to the attention of the public recently by way of media reports that HDB was downsizing its flats. Over the last 10 to 15 years, there is no doubt that there had been several demographic changes taking place, not least of which is the downsizing of the family unit. So the average household size over the last 10 to 15 years has come down, to around four today and, if the trend persists, to something less than four. That is one of the changes that is taking place that HDB has taken into account in its building programme. But having said that, there is no intention at this point in time for HDB to further downsize its flats. It has already done so slowly over the last many, many years. And currently, the intention is for HDB to continue to build flats of this size because this is the level of comfort and the level of public housing that we believe is affordable for Singaporeans and also affordable for the state. I think HDB has made it quite clear that there is no intention to further downsize the flats at this point in time.