Rental flats supply set to increase

Minister for National Development Khaw Boon Wan said there is a shortage of rental flats in Singapore, and there is a need to ramp up supply by “ten of thousands”.

However, Mr Khaw said it will take some time to make up this shortfall, as the construction industry is unable to cope with the sudden surge in demand.

Mr Khaw spoke about the need to ramp up the supply of rental flats, during a youth forum at the Woodlands Community Club.

“Single mothers, divorcees (may) suddenly have no flat (or) no money to buy (one), so they are counting on rental (flats),” Mr Khaw said.

“Then there are all kinds of HDB rules that prevent them from renting. The rules are not frivolous.

“The problem HDB faces is that they are just short of rental flats. It’s quite clear in my mind — we need to ramp up the building of rental flats as quickly as we can. Not just by a few thousands; actually we need to (increase) by tens of thousands. And the earlier the better.”

This comes two days after the HDB announced the supply of new BTO flats will be increased this year from 22,000 to 25,000 units.

Mr Khaw said the HDB needs to build “almost similar numbers” of rental flats, but said there are challenges.

While Mr Khaw is keen to ramp up the supply of new flats quickly, he admitted the construction industry cannot cope with this sudden surge in demand.

The industry is used to building some 15,000 units a year.

As such, Mr Khaw said it will take some time to meet demand.

Mr Khaw added he needs to study the capacity of the construction industry to understand how fast flats can be built.

Meanwhile, Mr Khaw was asked at the forum, about the large presence of foreigners in Singapore.

Some in the audience said they felt threatened when it came to competition for jobs.

Mr Khaw acknowledged that too many foreigners were allowed in, the last few years, and there was a need to calibrate the numbers.

But he noted the relationship between economic growth and foreign labour, and said by reducing their numbers, Singaporeans are accepting there will be trade-offs.

Mr Khaw said: “We thought (taking foreigners in) was important to bring wages to people’s pockets, so that we can grow as fast as we can… (and) catch up with other countries.

“But now, we get the message that ‘we don’t want so much growth, that we are prepared to accept slower growth’.

“It actually affects the youth immediately, because when you slow down growth, it means that job opportunities also come down (and) starting pay also comes down”.

Other issues touched on at the forum included alternative pathways for youths who want to pursue the arts, and global competition.

Source : Channel NewsAsia – 29 May 2011

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