Wednesday, December 28, 2011

Public housing policy undergoes rebuilding

Straits Times: Wed, Dec 28
PUBLIC housing underwent a sea change this year, with cornerstone policies up- ended in response to fresh challenges and the demands of an increasingly vocal population.


Red-hot demand and the resulting record high prices for homes made the affordability of public housing one of the hottest topics in May's general election.


When the dust settled, the Ministry of National Development (MND), which oversees the Housing Board (HDB), found itself being led by a new pair of hands.


Out went Mr Mah Bow Tan after 11 years at the helm, and in came Mr Khaw Boon Wan, who had volunteered for the ministerial hot seat.


Mr Khaw, who had kept a blog in his previous job as health minister, transplanted this practice to his new ministry. His 'Housing Matters' blog became the first to explain housing issues; he also used his Facebook page to respond personally to questions.


On his watch, the HDB saw a slew of policy shifts that slaughtered some sacred cows in public housing policy.


The most surprising one came in August, with the raising of the monthly income ceiling from $8,000 to $10,000 for build-to-order flats, and from $10,000 to $12,000 for executive condominiums.


The Government had defended the 17-year-old income ceilings as relevant as recently as five months before this.


A second policy change was in making the 'build-to-order' policy one of 'just build': Where the HDB used to launch a construction tender for such flats only when at least 70 per cent of the units had been sold, it now calls for tenders as soon as architectural drawings and tender documents are ready. This has enabled a record 25,200 build-to-order flats to be launched this year.


Third, the HDB signalled it will look into building more flats in mature estates, a departure from its previous policy of offering new flats only in new towns.


Fourth, the ministry announced a review of the formerly popular Design, Build and Sell Scheme (DBSS), following public outrage over a Centrale 8 DBSS unit in Tampines bearing an original price tag of $880,000.


DBSS projects were HDB's experiment in farming out the development of public housing to private developers.


Land sales for such projects have since been suspended, and the future of the scheme has yet to be decided.


Along with the policy changes, an unprecedented amount of information was made public, mostly through Mr Khaw's blog. He unveiled the profile of home buyers, application rates for first- and second-time buyers, and analysed supply numbers.


However, the HDB stopped issuing the quarterly median cash-over-valuation (COV) figure - which is the cash paid by buyers above a flat's valuation - saying it may not be representative of the market.


The changes prompted industry observers to dub 2011 an unprecedented year in public housing.


PropNex chief executive Mohamed Ismail called it an 'exceptional' year, given the new rules and restrictions which will affect the property sector.


jcheam@sph.com.sg


darylc@sph.com.sg


Along with the policy changes, an unprecedented amount of information was made public, mostly through Mr Khaw's blog. He unveiled the profile of home buyers, application rates for first-time and second-time buyers, and analysed supply numbers. On the other hand, the HDB stopped issuing the quarterly median cash-over-valuation figure... saying it may not be representative of the market.


Housing: What to look out for in 2012


Another bumper crop of flats in 2012
.


THE Housing Board will offer another 25,000 BTO units next year, starting with a January launch of 3,890 flats offered for sale in Choa Chu Kang, Punggol, Sengkang and Tampines.


This year, the HDB launched a record 25,200 BTO flats.


In 2009 and last year, the HDB launched about 9,000 and 16,100 BTO flats respectively.


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•Higher chance for second-timers




SECOND-TIMERS could see higher chances of getting a home, as Mr Khaw Boon Wan said the HDB will tweak the balloting rules to enhance the chances for second-timers when the backlog of demand from first-timers is cleared.


In the latest BTO launch in November, the day that applications closed for the units, the overall first-timer rate - revealed by the HDB for the first time - was 1.4.


This means 1.4 applications came in for every first-timer unit on offer.


Mr Khaw had said it was his wish the first-timers' application rate would come in below two.


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•Fate of DBSS likely to be decided




COMPLAINTS of escalating prices may just see the scheme scrapped. DBSS projects were the HDB's experiment in farming out the development of public housing to private developers. But following public outrage at a Centrale 8 DBSS unit in Tampines bearing an original price tag of $880,000, land sales for such projects have since been suspended.


The scheme however continues to be popular with potential home owners, which seems to suggest that there is still a demand for such housing types.

Source: The Straits Times © Singapore Press Holdings Ltd

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Martin Koh/ Sherry Tang
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