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It is a forte of the PAP government to plan well ahead into the next few decades to chart the future direction and destiny of Singapore.
Soon after Prime Minister Lee Hsien Loong assumed the leadership of the nation in 2003, he announced an ambitious plan to increase Singapore’s population to 6.5 million people via immigration by 2030.
The population of Singapore in 2003 is estimated to be around 4.2 million in 2003.
Singapore’s population hit the 5-million mark in June this year which represents an increase of 19 per cent in less than a decade.
As Singapore’s fertility rate is only 1.28 which is way below the replacement rate of 2.1, this means that the increase in the population is contributed largely by the influx of immigrants.
Foreigners now made up 36 per cent of Singapore’s population, up from 14 per cent in 1990.
Of the 64 per cent which are citizens, the exact breakdown of old and new citizens is not revealed.
According to Home Affairs Minister Wong Kan Seng, there are over 20,000 new citizens and 90,000 PRs last year.
Naturally if there are so many foreigners settling down in Singapore, the demand for public housing will surely go up.
However, it appears that the National Development Ministry had failed to plan ahead for Singapore’s increased population now a few years ago as evident from the housing statistics provided by HDB in its financial report for FY2008/09.
[Source: HDB Financial Report 2008/2009]
As we can see from the above figures, the number of flats built by HDB for the last three years average about 3,ooo plus a year which is way below the number in the preceding 5 years.
55,515 flats were built between 2001 – 2005, or an average of about 11,000 flats a year. From 1996 – 2000, 158,621 flats were built.
Why are there fewer flats built when the rate of immigration was increased during the same period of time between 2006 – 2008?
It doesn’t take an economist to figure out that the rising demand for public housing in the face of limited supply of flats will lead to inflation in prices with some first-time home buyers missing out on their choice of flats or being priced out of the market altogether.
The prices of HDB resale flats hit a record high in June this year with that of new flats following suit.
In two recent sale exercises of BTO and balance flats, they were more than 10 times over-subscribed, an indication of the severity of the housing shortage on the ground.
[Source: HDB Financial Report 2008/2009]
We can see from the above table that there were 9,870 bookings for new flats for only 3,183 units completed in 2008.
Despite the rising unhappiness and resentment on the ground at the housing shortage and sky-high prices, HDB continued to insist initially that supply of new flats are adequate to meet the housing needs of Singaporeans.
Following mounting criticisms from the public, HDB relented and promised to build more flats to meet the demand.
The number of projects under construction increases by 74 per cent from 18,073 for FY07/08 to 31,058 for FY08/09 which begs the question on why HDB has not done so earlier.
If the number of flats built between 2006 – 2008 are indeed sufficient to meet current housing needs as claimed by National Development Mah Bow Tan, why then did he reverse his stance abruptly and announce that HDB will increase the supply of new flats now? Is there a mistake made somewhere?
The new flats under construction at present will only be completed in three to four years time.
Is the PAP government planning ahead by building more flats to meet the expected increase in demand or “backwards” to do so only when the demand has far outstripped the supply?
PAP MP Dr Muhammad Faisal chided Singaporeans for not “planning ahead” when purchasing their first homes.
He quoted the example of a young couple who had registered for a flat in Punggol this year when they are expected to get marry only four years later in 2013.
With due respect to Dr Faisal, it is both unreasonable and unrealistic of him to demand Singaporeans to plan ahead for their matrimony as human relationships are fickle and fragile by nature and it would be foolhardy to expect all couples who apply successfully for HDB flats to get married eventually.
How can they know or guarantee that they will tie the knot a few years down the road? What if they break up after they pay the 5 per cent downpayment for their flat? It will automatically be forfeited by HDB.
Using the current prices of between $250,000 – $350,000, this will result a loss of $12,500 – $17,500 for the couple or one of them, not a small sum by today’s standards.
If Dr Faisal or HDB wants to encourage Singaporeans to plan ahead and purchase their flats a few years before their marriage, then it should waive off the penalty for couples who are unable to complete the transaction because they are no longer together.
It would be far easier and more practical for the PAP government to plan ahead by either increasing the supply of flats or reducing the intake of new citizens and PRs than to predict matters of the heart.
Public housing has become a necessity for Singaporeans who cannot afford private housing.
The onus is on the government to keep the prices of HDB flats affordable to enable Singaporeans to get a flat of their choice and not on the buyers to plan well ahead of schedule in their personal affairs so that they will have a readily available flat by the time they get married.
It is a forte of the PAP government to plan well ahead into the next few decades to chart the future direction and destiny of Singapore.
Soon after Prime Minister Lee Hsien Loong assumed the leadership of the nation in 2003, he announced an ambitious plan to increase Singapore’s population to 6.5 million people via immigration by 2030.
The population of Singapore in 2003 is estimated to be around 4.2 million in 2003.
Singapore’s population hit the 5-million mark in June this year which represents an increase of 19 per cent in less than a decade.
As Singapore’s fertility rate is only 1.28 which is way below the replacement rate of 2.1, this means that the increase in the population is contributed largely by the influx of immigrants.
Foreigners now made up 36 per cent of Singapore’s population, up from 14 per cent in 1990.
Of the 64 per cent which are citizens, the exact breakdown of old and new citizens is not revealed.
According to Home Affairs Minister Wong Kan Seng, there are over 20,000 new citizens and 90,000 PRs last year.
Naturally if there are so many foreigners settling down in Singapore, the demand for public housing will surely go up.
However, it appears that the National Development Ministry had failed to plan ahead for Singapore’s increased population now a few years ago as evident from the housing statistics provided by HDB in its financial report for FY2008/09.
[Source: HDB Financial Report 2008/2009]
As we can see from the above figures, the number of flats built by HDB for the last three years average about 3,ooo plus a year which is way below the number in the preceding 5 years.
55,515 flats were built between 2001 – 2005, or an average of about 11,000 flats a year. From 1996 – 2000, 158,621 flats were built.
Why are there fewer flats built when the rate of immigration was increased during the same period of time between 2006 – 2008?
It doesn’t take an economist to figure out that the rising demand for public housing in the face of limited supply of flats will lead to inflation in prices with some first-time home buyers missing out on their choice of flats or being priced out of the market altogether.
The prices of HDB resale flats hit a record high in June this year with that of new flats following suit.
In two recent sale exercises of BTO and balance flats, they were more than 10 times over-subscribed, an indication of the severity of the housing shortage on the ground.
[Source: HDB Financial Report 2008/2009]
We can see from the above table that there were 9,870 bookings for new flats for only 3,183 units completed in 2008.
Despite the rising unhappiness and resentment on the ground at the housing shortage and sky-high prices, HDB continued to insist initially that supply of new flats are adequate to meet the housing needs of Singaporeans.
Following mounting criticisms from the public, HDB relented and promised to build more flats to meet the demand.
The number of projects under construction increases by 74 per cent from 18,073 for FY07/08 to 31,058 for FY08/09 which begs the question on why HDB has not done so earlier.
If the number of flats built between 2006 – 2008 are indeed sufficient to meet current housing needs as claimed by National Development Mah Bow Tan, why then did he reverse his stance abruptly and announce that HDB will increase the supply of new flats now? Is there a mistake made somewhere?
The new flats under construction at present will only be completed in three to four years time.
Is the PAP government planning ahead by building more flats to meet the expected increase in demand or “backwards” to do so only when the demand has far outstripped the supply?
PAP MP Dr Muhammad Faisal chided Singaporeans for not “planning ahead” when purchasing their first homes.
He quoted the example of a young couple who had registered for a flat in Punggol this year when they are expected to get marry only four years later in 2013.
With due respect to Dr Faisal, it is both unreasonable and unrealistic of him to demand Singaporeans to plan ahead for their matrimony as human relationships are fickle and fragile by nature and it would be foolhardy to expect all couples who apply successfully for HDB flats to get married eventually.
How can they know or guarantee that they will tie the knot a few years down the road? What if they break up after they pay the 5 per cent downpayment for their flat? It will automatically be forfeited by HDB.
Using the current prices of between $250,000 – $350,000, this will result a loss of $12,500 – $17,500 for the couple or one of them, not a small sum by today’s standards.
If Dr Faisal or HDB wants to encourage Singaporeans to plan ahead and purchase their flats a few years before their marriage, then it should waive off the penalty for couples who are unable to complete the transaction because they are no longer together.
It would be far easier and more practical for the PAP government to plan ahead by either increasing the supply of flats or reducing the intake of new citizens and PRs than to predict matters of the heart.
Public housing has become a necessity for Singaporeans who cannot afford private housing.
The onus is on the government to keep the prices of HDB flats affordable to enable Singaporeans to get a flat of their choice and not on the buyers to plan well ahead of schedule in their personal affairs so that they will have a readily available flat by the time they get married.
