NEW HOUSING AND DEVELOPMENT BOARD FLATS (Adjustment of prices)

Mr Ong Kian Min asked the Minister for National Development, in view of the drop in resale Housing and Development (HDB) flat prices and the large number of new HDB flats available, whether the HDB is considering adjusting the prices of new HDB flats.

Dr John Chen Seow Phun (for the Minister for National Development): Sir, HDB reviews the prices of HDB flats regularly to ensure that they remain affordable to Singaporean households. In pricing its flats, HDB does take the prevailing resale prices of comparable HDB resale flats into consideration. The other factors include the locations and attributes of the flats.

Mr S. Iswaran (West Coast): Sir, may I ask the Minister of State what is the frequency at which HDB revises its flat prices?

Dr John Chen Seow Phun: Sir, every quarter, when there is an offer of flats, we would review the prices.

Mr Iswaran: Is there a case to consider more frequent reviews of flat prices, given that there is considerable volatility in the resale market?

Dr John Chen Seow Phun: Sir, the reason why we do quarterly reviews is because we offer the flats quarterly. The Minister has mentioned that we are looking into a more flexible and responsive system of allocation according to timing and location. So we will take the Member's concern into consideration.

Mr Goh Choon Kang: Sir, the Minister of State did not answer my question on the prices for the "bad" units. I think if they are cheaper, more people may take up these units.

Dr John Chen Seow Phun: Sir, as I said, for the prices, we take into consideration the attributes of the flats. So, flats that do not have a good facing or are on lower floors in the same block and location, are generally cheaper. Flats that are not selected for, say, one to three years, would probably command a lower price too.

Mr Ong Kian Min (Pasir Ris): Sir, may I ask the Minister of State whether new HDB flats are still affordable to the lower-income group, bearing in mind that this group has been adversely affected by the recent economic crisis and might not have recovered in line with the subsequent recovery in the economy?

Dr John Chen Seow Phun: Sir, as I mentioned in my reply, affordability is a key consideration, and the Ministry is always mindful of helping the lower-income group. In fact, if Members can recall, not long ago, we introduced the Special Housing Assistance Programme (SHAP) for the lower-income group and people who are earning, say, $2,000 and below. They can now buy a 3-room buy-back flat and can get up to 95% in loans from the Government.

Mr Ong Kian Min: Sir, is it a concern that if prices of new HDB flats are lowered, it would then lead to a drop in HDB resale prices and, subsequently, a decline in the property market on the whole?

Dr John Chen Seow Phun: Sir, as I said, again, the key consideration is affordability. Everybody knows that the prices of new HDB flats lag behind prices of resale units and, I think, for good reason, because HDB flat prices do contribute to stability of the whole property market.