Buying a flat? Choose wisely

“Shall we apply for an HDB flat?” This is how Singaporean men propose to their beloved. So we are told – I am not sure how common this is. However, this uniquely Singaporean marriage proposal reflects a common aspiration among many young couples intending to wed – getting an HDB (Housing and Development Board) flat.

This desire to own a marital home has remained unchanged over the years. But what buyers want from a home has changed. As our nation and people progressed, their hopes and dreams for housing have risen and become more diverse. How has HDB’s housing programme responded to these changing aspirations?

Responding to Rising Aspirations

Providing housing to the masses. The Government’s core commitment – to provide affordable housing for the masses to build an inclusive home – remains firm and clear. But housing the masses is no longer just about providing a basic shelter. People ask me: Why doesn’t HDB stick to providing basic housing? The answer is simple: Our people have changed and they no longer want only basic housing.

The proportion of HDB residents with tertiary education, for example, has increased five times over the last 20 years, from 6 per cent in 1987 to 31 per cent in 2008. Average household incomes have also increased almost four times over the same period, from $1,500 in 1987 to $5,700 in 2008.

Offering a wider range of flat types. In the early days, when we faced a huge housing shortage, HDB focussed on building simple and functional one-, two- and three-room flats as quickly as possible.

But in the 1980s, with rising affluence, there were few takers for smaller flats. Therefore, HDB had to build more four-room, five-room and Executive flats. With economic growth becoming more volatile in the late 1990s and 2000s, HDB resumed the building of three-room flats (in 2004) and two-room flats (in 2006). These flats provided options for lower income households and those wanting to right-size their homes as they age.

Offering a wider range of designs. Buyers of new HDB flats range from those earning less than $1,500 a month to those earning up to $10,000 a month. To provide greater choice and variety for higher income buyers, HDB allowed private developers to participate in public housing projects, first through the Executive Condominium Housing Scheme in the 1990s, and later through the Design Build and Sell Scheme in the 2000s.

Several new HDB developments also feature innovative designs and test new concepts for public housing. The award-winning The Pinnacle @ Duxton, HDB’s first 50-storey development featuring seven blocks linked by skybridges, is particularly close to my heart.

The project is historically significant as it stands on the site of HDB’s first flats in the area – two slab blocks completed in the 1960s. It visibly symbolises the transformation of Singapore and our public housing programme over the past 50 years.

To turn this project into reality, I had to persuade my Cabinet colleagues to keep this prime downtown location for public housing, instead of selling it to private developers. I also asked HDB to organise an international design competition to attract the best designs for the project.

The Waterway Terraces at Punggol is another example of unique design, setting new benchmarks for waterfront living for public housing.

Making Choices within Our Means

Staying focused on standard flats. More flat choices inevitably mean a wider range of flat prices. The old days – when HDB flats were all uniform slab blocks sold at similar prices – can no longer remain.

The premium flats, with better designs, better finishes and at better locations, will command a premium. However, these form only a fraction of new flats offered. The bulk of HDB’s supply will remain good quality standard flats, offered in a wide variety of locations and more affordable for Singaporeans.

Buying within our means. It is natural for all of us to want a better home. I am encouraged that HDB’s premium developments such as The Pinnacle@Duxton and Waterway Terraces at Punggol have been popular and have kept pace with Singaporeans’ aspirations. But I also worry that as we provide greater choices to meet diverse aspirations, some may overstretch their budgets to buy these flats.

HDB offers a range of flat choices for every budget. For example, a household earning $5,000 a month can choose a more centrally located 3-room flat in Toa Payoh, a 4-room flat in Bedok, or a 5-room flat further away in Woodlands (see table). I urge home buyers to consider the trade-offs between the price, size and location of the flat, and carefully choose one that best suits their needs and budgets.

I know young flat buyers will want to find the perfect first home. It is entirely understandable. At the same time, I would encourage them to be prudent and start with a flat within their means. They should not overstretch themselves when they are not ready to get their dream flat.

HDB provides different flat options and up to two subsidised loans; these will help young couples to right-size their homes as their incomes improve. With their whole lives ahead of them, they should take it one step at a time.

By Mah Bow Tan, Minister for National Development.

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