HDB to build more new flats, rental units to meet rising demand

Singapore’s Housing & Development Board (HDB) said it is offering 8,400 new flats this year, which is 40 per cent higher than the 6,000 units offered in 2007.

Of these, 5,000 flats have already been launched, with a good part of them sited in Punggol, which is earmarked as a waterfront town.

Plans are also in the pipeline to address the issue of rising construction costs and high demand for public rental flats.

The supply boost is a boon but market players said the new flats may not be ready in time for those who need housing in the coming year.

Real estate agency PropNex expects the strong demand for resale flats to persist.

It is also projecting resale prices to climb 5 per cent in the next 6 months.

The agency noted that the prices of new HDB flats have crept up as well, even though they are still below market rate.

PropNex’s CEO Mohd Ismail said: “It used to be much lower but because of construction cost(s), the gap has very much narrowed. Today, a brand new (HDB unit) versus a resale (unit), we are talking about less than 20 per cent.”

Observers said construction costs have nearly doubled in the past two years. And it’s showing on HDB’s books.

The HDB recorded a deficit of S$1,081 million in the 2007/08 Financial Year excluding the government grant. That is S$341 million more than the previous year.

The net surplus after government grant of S$1.248 billion was S$167 million.

HDB said it was due to the stepping up of its building and upgrading programmes.

And there are measures to keep costs down.

“We have a crop of building contractors who have been providing very good services to us at reasonable prices. We are also able to do bulk contract, (which is) buying in bulk, that helps us lower building material cost(s),” said Tay Kim Poh, HDB’s CEO.

More HDB owners also sublet their flats last year since subletting rules were relaxed. As of August 2008, 21,000 flats were rented out, compared to 13,200 in March last year.

Property agents said one of the challenges for HDB is in providing enough housing for needy families. To that end, the HDB will be building 2,000 new rental flats in various parts of Singapore next year.

Guidelines will also be reviewed by year-end to make sure the rental flats go to people who need them most.

HDB said it will continue with ongoing efforts to rejuvenate public housing estates. It is also studying wider application of environmentally-friendly technologies for HDB flats.

Source : Channel NewsAsia – 17 Sep 2008

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