Govt mulls building HDB flats in prime areas

Romesh NavaratnarajahAugust 12, 2016

Greater Southern Waterfront resize

Artist’s impression of the Greater Southern Waterfront. Source: URA

National Development Minister Lawrence Wong said the government is considering building public flats in prime areas, like the planned Greater Southern Waterfront, in order to make the city accessible to all, reported TODAYonline.

He made the statement at the annual Kent Ridge Ministerial Forum at the National University of Singapore (NUS) on Thursday, 11 August.

The said flats may have different requirements like varying lease periods, said Mr Wong, in response to a query from a student on how to make new economic icons and public buildings available to all Singaporeans. The student noted that while Marina Bay Sands, for instance, is an icon of Singapore, “it is not really a place for all Singaporeans because of the high cost of enjoying such a place”.

Citing green spaces and common areas in places like Marina Bay that Singaporeans can enjoy for free, Mr Wong said: “That has always been the basis of building our city, that it cannot be stratified, we don’t want a city that is exclusive. You cannot have a person living in a 3-room flat or an HDB flat saying: ‘This is not accessible to me, this is a city that’s only for the elites, and it’s not for me’.”

In planning the Greater Southern Waterfront extension or the new “central business district” in Jurong, he revealed that the government intends to be “very mindful and conscious of this — be it having a hawker centre there, having gardens and parks, or even having HDB flats there — so that you have HDB residential living right in the city”.

Notably, the idea of constructing more public housing within prime areas in order to increase interaction between the have-nots and the haves was floated at a Real Estate Developers’ Association of Singapore (REDAS) event last year. Then-Social and Family Development Minister Chan Chun Sing said such a move would not bridge the gap between the rich and the poor.

Meanwhile, a paper published by the Lee Kuan Yew School of Public Policy earlier last year also raised the question of whether the development of less public housing in Singapore’s city centre may lead to “enclaves” of social and wealth stratification.

During the forum, Mr Wong acknowledged that the government is finding it hard to build public flats in prime areas. “People who successfully ballot for highly subsidised flats in the city area would have a ‘huge gain’”, he said, noting that equity had to be ensured for those who fail to get the flats.

And while the government does not have a good solution yet, different options are being looked into. But “the basic imperative to make sure our city is accessible by everyone, is something that we fully agree” with, he added.

 

Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg

Competition
Aug 14, 2016
If HDB builds many more iconic projects in city centre, the increase in supply will eventually moderate the resale prices of Pinnacle Duxton and dilute their huge gains. But that will take a long time, say 20 years. By the time the ports are relocated to Tuas, it will be 2027. It takes another 3 years at least to demolish the existing infrastracture and let the land foundation "solidify". And, it takes a further 4 years to build new HDB flats. So the earliest probably is 2035 when the city centre can witness a ramp-up of BTO HDB flats. Singaporean kids and teens NOW studying in primary and secondary schools will reach age 30s by then and they will be the biggest group of first-timers applying for BTOs in city centre two decades from now. They need to cultivate an active interest on this issue.
EC
Aug 14, 2016
Build Executive Condos or DBSS flats in city centre and price the 5-roomers lower than $1 million. Choosing between Pinnacle or EC / DBSS in city centre, most people with $1 million dollar budget will rather opt for an EC / DBSS in city centre. But to moderate the gains of EC / DBSS after they enter resale market upon reaching 5-year MOP, a capital gains tax should be imposed.
Limited Edition
Aug 13, 2016
Any property that is perceived as "limited edition" tend to achieve huge gains, regardless of whether it is located in city centre or suburbs. Bishan maisonettes, old HDB terrace houses and new Clementi Towers HDB flats that are integrated with Clementi Mall are all limited editions. When SkyTerrace and Skyville at Queenstown enter the resale market in 2019, some of the flats there will achieve huge gains too due to their iconic design which is again "limited edition". So if there are any measures being designed to moderate huge gains, it should also target limited edition HDB properties that reap handsome profits regardless of locations.
Capital Gains Tax
Aug 12, 2016
If the objective is to moderate the huge gains from public housing in city centre and Jurong Lake District, is time to consider imposing capital gains tax for public housing specifically in those two areas. Currently, capital gains tax are not levied on residential properties across Singapore. Alternatively, impose a two-tier resale levy: A higher amount for those in city centre and JLD and a normal amount for the rest. For instance, instead of a standard $40K resale levy for a 4 room flat, impose, say, $120K resale levy for 4 roomers in city centre and JLD. Either capital gains tax, or higher tier resale levy, or a combination of both, should moderate and dilute the huge capital gains.
Pinnacle Huge Gain
Aug 12, 2016
Pinnacle Duxton is a PRIME example of how someone can make huge gains while benefiting from state subsidies. The resale prices show that 5 roomers there on average have nearly tripled the initial cost outlay.
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