Reflection on Forum

Original websit: http://www.straitstimes.com/STForum/Story/STIStory_484049.html

Original article
Jan 30, 2010
HDB ready to build more flats if there is demand

THE figures quoted by Mr Gurmit Singh Kullar ('It was inevitable that the reduced supply would impact the housing market', Jan 16) refer to the number of HDB flats completed, not the number of flats offered for sale.

As Build-To-Order (BTO) flats take about three years to complete, the lower number completed between 2006 and 2008 was a consequence of the smaller number launched in the early 2000s.

This was a time when HDB had a large stock of unsold flats available for sale, hence the smaller than usual number of BTO flats launched.

The BTO system is responsive to demand, allowing HDB to offer more or fewer flats depending on need. Following the demand pick-up in the second half of last year, HDB has ramped up new flat supply to 9,000 BTO flats last year.

Together with other sales exercises, a total of 13,500 units were offered last year.

We are ready to supply a similar number of new flats this year, and more if there is sustained demand.

The 24,000 annual marriages, which Mr Gurmit quoted, is not an appropriate indicator of the actual demand for HDB flats.

This is because the figure includes re-marriages and non-citizen marriages, where the newly formed households may not qualify for new HDB flats.

Also, some citizen households have alternative housing options such as HDB resale flats, private housing, or they live with their parents and do not need to apply for new flats.

In recent years, the number of first-timers buying new flats or subsidised resale flats has averaged between 13,000 and 15,000 a year.

Ignatius Lourdesamy
Deputy Director (Marketing and Projects)
Housing & Development Board

Reflection
I REFER to the article’ HDB ready to build more flats if there is demand’ by Ignatius Lourdesamy, the deputy director of Housing & Development Board. In this article, he indicated that the Build-To-Order system is responsive to demand, allowing HDB to offer more or fewer flats depending on need. In addition, he gave an example that the lower number completed between 2006 and 2008 was a consequence of the smaller number launcher in the early 2000s.

In my opinion, I strongly agree with the author. It is important to make the supply satisfy the demand of the market. Just as he had mentioned that between 2006 and 2008, it is because the amount of available flats of HDB is smaller than usual number of BTO flats launched. Moreover, I think the BTO system is an efficient way to find out the market demand. For instance, 9,000 flats of 13,500 which were sold last year were ordered through BTO.

However, the way which Mr. Gurmit analyzed the reason of the annual marriage could not indicate the actual demand for HDB flats is not proper. On the one hand, there are re-marriages and non-citizen marriages which will not buy new flats. On the other hand, I think most new households of non-citizen marriages are qualify for HDB flats. Because they make their marriages here in Singapore which means they have already get the qualification. So I think the government should attach great importance to make a research on the real demand on HDB flats every year to avoid the rise of flat’s price.

by Peter