What HDB Got Right

For the first time in a long time, the prices of HDB flats no longer come in wild swings. Gone, hopefully, are the days when all you could do was to tear your hair out in the face of skyrocketing prices, and seeing your dream of home ownership vaporise into thin air.
Where in the past cash-over-valuations (COV) of S$50,000 to $80,000 were commonplace, sellers are now selling without COVs or below valuation. In October, the news reported that one in ten HDB flat was sold with zero COV. [See here.] The Straits Times reported in December that “around four times as many flats were sold below valuation in October alone than over the whole of January to June.”
Overall, prices of resale HDB flats fell some 1.3 per cent in the last quarter of last year.
The projection from the industry is that prices will fall further, with some predicting a 5 to 10 per cent drop in the next 2 years. 
The stabilising of prices is the results of numerous cooling measures introduced by the government in the last couple of years. It must be remembered, however, that such measures were first introduced as far back as 2008/9. It was only in the last 2 years that the government took a more aggressive stance to rein in runaway prices. 
These included a restriction on the purchase of HDB resale flats by new permanent residents, a cut in the mortgage servicing ratio, and shortening of the maximum loan tenure.
“Analysts added that changes such as allowing singles to buy flats directly from the government also siphoned demand from the resale market,” reported Channel Newsasia.
The idea to allow singles to buy BTO flats was raised by Prime Minister Lee Hsien Loong in 2012. Many Singaporeans had been crying out for cheaper flats before that, since the rental market was getting beyond their reach with the escalating prices. Following PM Lee’s remarks, Minister for National Development, Khaw Boon Wan, said he would look into this after he has stabilised the wider market. And indeed credit has to be given to Mr Khaw for doing just that in the last 2 years or so. He has, for now, done what his predecessor tried and failed to do – bring down prices and stabilise the market.
In March 2013, Mr Khaw announced that singles aged 35-and above would be allowed to purchase new 2-room BTOs from the HDB. [See here.]
Mr Khaw has said that this year, HDB will focus on building more two-room flats to cater to the demand from singles.
Single Singaporeans now have an option which they never had before. 
Another group which the government has rightly tweaked the rules to include are the divorcees. In March last year, the government announced that divorcees applying a second time to buy a flat from the HDB will find it easier to get a flat. [See here.]
This was because of the doubling in the quota of two-room and three-room flats in non-mature estates for the second-timers, from 15 per cent to 30 per cent.
According to the Straits Times, divorcees can apply for or own two separate subsidised flats three years after their divorce instead of having to wait five years.
The time bar does not apply if they are buying a new flat with a new spouse or their parents.
"This will help them move on with their lives, especially those with children," said Mr Khaw.
Anyone who is divorced or going through one knows that a looking for a place to stay is one of the main problems they will face. It is made worse if they have children in their custody as well. No parent would want to see their children without a home, and renting is always a more expensive option which is not always viable for many.
So, while there are still concerns and a sense, however limited, of uncertainty, about the market, Singaporeans such as singles and divorcees are by and large relieved that setting up home is no longer as impossible as before.
In a country as crowded – and increasingly so – as Singapore, a home is that priceless private sanctuary which one takes refuge in after a day at the office. It is that little corner in a tiny island where you can shut out the rest of the world and its hurly burly. 
And be with those you love.
I am especially happy for the option now open to divorcees with children. And it is good that the government has recognised that while we may and should continue to promote family life, it does not mean that we punish – inadvertently or not – those who, for many varied and very personal reasons, cannot sustain their personal or spousal relationships.
Housing will always be a big issue among Singaporeans, given how precious little land we have and everyone wanting his or her own little corner of the island. 
Perhaps the next thing the government should look into is to ensure that Singapore does not become so congested and built-up as it is threatening to be. The many and ubiquitous construction sites around Singapore tell their own story of how perhaps our bigger home – the country called Singapore – needs its own breathing space.
In the meantime, after the last 5 years or so of a property market gone mad, where prices of flats have doubled, Singaporeans hope the current stabilised situation will hold.
This will indeed give everyone peace of mind. 


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