Myra Condo NEWS: Oversupplied HDB BTO is not the answer to housing affordability

NATIONAL DEVELOPMENT MINISTER said at Parliament on Tuesday (Feb 7) that BUILD-to-order (BTO) apartments are not the solution to keeping public housing affordable. and easy to access. For example, the 1997 Asian financial crisis left the Housing and Development Board (HDB) with 31,000 unsold apartments, which took more than five years to resolve, he said.

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Lee's comments were in response to various proposals from several Members of Parliament (MPs) about increasing the supply of BTO apartments and building them ahead of demand – part of a debate over two related proposals. regarding the affordability of public housing, submitted by the Government and Singapore Progressives MPs not from the Party constituency (PSP).

Although homebuyers were able to "step into buyer-ready apartments" in the early 2000s, Lee noted that homeowners paid a lot of money, keeping home prices low. “Some people bought apartments just before the crisis ended with negative equity, even losing their homes and hard-earned savings,” he said.

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Beside Myra Residences, the unsold residences are also a "waste of taxpayers' money", the minister added, as holding costs arising from vacant housing supply are money that could have been spent on other areas such as health care and education.

In any case, the Government has ramped up the supply of BTO apartments, Lee emphasized, with nearly 100 BTO projects – accounting for about 80,000 apartments – running across the island at various stages of construction.

“This high tempo will continue and by around 2025 we expect to have around 150 BTO projects going on at the same time,” he said. “In terms of contract value, HDB is not only the largest housing developer, but also exceeds all other private housing contracts combined, by more than 50%.”

In an earlier speech, Congressman Leon Perera of the Workers' Party dismissed claims that the newly vacated apartments would be a loss to the state.

“If such apartments are still unsold, the sale price could go down until we get to the clearing of the market, where there will be people buying it, that's how the market works,” he said. onion.

Market research will also be done in advance to reduce this risk, and any remaining unsold apartments can be used as public rental shares, Perera added.

The opposition MP also said the note before building BTO apartments in front of demand is that this should be done after the current backlog in the market is cleared, to avoid resource diversion.

Responding to other proposals made by PSP during the debate, Senior State Secretary for National Development Sim Ann emphasized that undervaluing the state's land and eliminating land costs to reduce land costs. BTO fixed prices can in fact backfire on homebuyers.

“As the price of BTO drops significantly, it is likely to trigger more demand, especially in prime locations. First-timers will face more competition,” Sim said.

PSP has proposed that the new apartments be sold for the same price as their construction costs and a "noticeable location fee". HDB will record the cost of the land at the time of purchase and will be payable along with accrued interest when the unit is subsequently sold.

But this will severely penalize individuals, who may not be able to sell their apartments, Sim said. “Actually, the next generation of condo buyers will suffer heavily... buying units for resale and paying the bill for the initial land cost that the first homebuyers paid for. should have suffered first.”

Second Minister for National Development Indranee Rajah added that taking the land without paying for it would rob the country of its reserves.

“As a result, we will forgo funds that we should have invested and this investment will yield a return under our current system,” she said. "To make up for the net return on investment contribution that can't currently be financed, we'll have to raise taxes or cut spending."

Indranee also pointed out that PSP's proposed scheme could reduce the asset value of existing apartments, while "destabilizing" the real estate and resale market.

Regarding PSP's second proposal, which is for the Government to provide rental apartments in prime areas for young families or groups of singles, Sim emphasized that subsidized rental housing is "very targeted." target” for families who cannot afford to buy a home – and for good reason.

Home ownership, for example, “protects (individus) against the uncertainties of the rental market,” she said, as well as giving Singaporeans a “tangible stake in nation-building” and at the same time. increase their financial security.

Separately, MP Gan Thiam Poh of the People's Action Party warned of the need to "protect against the price gap".

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