Flat prices will rise but still be affordable

Flat prices will rise but still be affordable

MM: Cost grows with economy, but Govt will help first-home buyers

By Zakir Hussain , POLITICAL CORRESPONDENT

SINGAPOREANS can expect the prices of HDB flats to keep on rising as long as the economy continues to grow, Minister Mentor Lee Kuan Yew said yesterday.

However, he assured young couples that the Government will help them to own their first flats.

The Housing Board will also keep building affordable homes ’so that each generation of Singaporeans will continue to have a stake in the nation’, he added.

Mr Lee gave the assurance when he visited the newly-completed crown jewel of Singapore’s public housing, which he said is symbolic of the spectacular transformation of the country.

The Pinnacle@Duxton, rising 50 storeys high, stands on a plot that was occupied by the first rental blocks in Tanjong Pagar constituency, of which Mr Lee has been the MP for 54 years.

Yesterday, he recalled how he used the two Duxton Plain blocks then under construction in his 1963 election campaign, when the leftists were determined to win his seat.

‘I said: ‘If you vote for me, these will be completed and will be yours’. If not, the Barisan Sosialis will win and you will have a bleak future.’

Such blocks were built in the 1960s as a quick fix for Singapore’s rapidly-growing population who were ‘living in overcrowded shophouses or squatter huts’.

‘People were poor and life was hard. No running water, no modern toilets, no expectation of a better future,’ said Mr Lee in a speech that traced the ‘breathtaking’ transformation of Singapore’s housing landscape since the 1960s.

Later, he told reporters that the direction of HDB home prices depends on the people.

If they have confidence in the country and support the Government, then prices ‘must go up’ as they have every year since 1965, he said, in response to reporters asking what he would say to young couples lamenting the sharp price increases in recent years.

The alternative, Mr Lee said, is grim.

‘They’ve got to decide if the country is going to go up or go down. If the country is going to go down, then the economy will go down, people’s incomes will be down, unemployment will be up and property values will go down.’

In the last 45 years, HDB home prices have soared. For instance, a three-room flat in Queenstown in 1964 cost $6,200, but would fetch at least $200,000 today.

However, much of the increase in prices has taken place in the past few years.

In his speech, Mr Lee also dwelt on the many benefits of a home-owning society, which had its roots in the policy introduced in 1964.

It gave a community of immigrants a sense of rootedness in Singapore, he said, adding: ‘It is the foundation upon which nationhood was forged.’

Owning their homes also gives people a pride that is critical in preventing housing estates ‘from turning into slums, which is often the fate of public housing estates in other countries’, he said.

But the key advantage is that the policy gives people ‘a tangible stake in worth’ and motivates them to work hard.

‘If Singapore prospers, their flat values will appreciate and they share in the growth,’ he said.

He added: ‘If all the 900,000 HDB flats built over the past 50 years were rental flats… We would not have the stability, progress and prosperity that a stake in home ownership of a growing asset has made possible.’

As assets, HDB homes have become more valuable partly because their prices have moved in tandem with the economy, thus allowing citizens to share in the fruits of growth, said Mr Lee.

This can be seen in the high demand for the flats at the Pinnacle@Duxton, he said.

It has 1,848 flats. At the first launch in 2004, its four-room flats cost an average $335,000 and the five-room flats, 395,000. This year, the HDB priced these same-sized flats at an average of $486,000 and $590,000 respectively.

Mr Lee described the building of the Pinnacle as ‘a strong testament to our tenacity and capabilities as a people’.

‘I see more and more of these old blocks being demolished, and new blocks like the Pinnacle being built,’ he added.

Source : Business Times - 14 December 2009

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MINDY YONG

( +65 ) 91002985

mindy@mindyyong.com

Higher prices for Pinnacle reflect strong demand: MM

Higher prices for Pinnacle reflect strong demand: MM

Young couples will get govt aid in fulfilling dream of home ownership

By JOYCE HOOI

THE higher prices for The Pinnacle@Duxton during its second launch were a function of strong demand for the units, Minister Mentor Lee Kuan Yew said yesterday.

View from the top: Mr Lee was at the 50-storey Pinnacle@Duxton yesterday for the key handover ceremony
‘Even though prices of the flats at the second launch in 2008 were higher, the demand for the flats was still very strong. The higher prices reflect the demand for the flats; they reflect the market demand,’ said Mr Lee during his speech at the key handover ceremony for The Pinnacle@Duxton.

The 50-storey Pinnacle@Duxton was first launched in May 2004. Some of the remaining units were re-launched in September 2008.

Then, 111 five-room flats were put up for sale at $545,000 to $645,800. Even then, there were 372 applicants.

When the project was first launched in 2004, in a lukewarm property market, four-room flats started at $289,200 while five-room flats were offered for up to $439,400.

Mr Lee also emphasised the importance of pricing Housing and Development Board (HDB) flats differently to reflect their true values.

‘We cannot price a new flat in Punggol or Tanjong Pagar the same because when they are re-sold, we know there will be a tremendous difference in price,’ he said.

‘From the 1980s, we moved towards a market-based system. By liberalising the resale market and allowing HDB prices to move in tandem with the economy, we unlocked the value of HDB flats to allow citizens to share in the fruits of the nation’s growth. Home ownership of a HDB flat is a store of value that can be monetised when need be.’

Even so, Mr Lee warned against flipping HDB flats for a quick profit.

‘The rules on minimum occupation and requirement for family nucleus are to discourage speculative purchases. We expect flats will continue to appreciate as long as we develop and grow our economy.’

In response to the possibility of young couples lamenting rising property prices, Mr Lee said: ‘Well, they have got to decide if the country is going to go up or go down. If the country is going to go down, then the economy will go down and their incomes will be down - unemployment will go up and property values will come down.

‘If they have confidence in Singapore, in working with the government, then it must go up as it has gone up every year since 1959 or since 1965.’

Mr Lee also made it clear that young couples will receive government assistance in fulfilling their dream of home ownership.

‘Young couples will receive sufficient help from the government to own their first flats. HDB will continue to build affordable homes of good quality, so that each generation of Singaporeans will continue to have a stake in the nation.’

The Pinnacle@Duxton development, which is the island’s tallest public housing development, features 12 sky bridges that link all seven of the blocks.

The sky bridges will be accessible from Jan 1.

The 26th storey sky bridge will be exclusive to residents who will also have access to the 50th storey sky bridge.

The public will have to pay $5 by EZ-Link or Cepas-compliant cards to access the 50th-storey sky bridge.

The development also includes amenities such as a food court, childcare centre, basketball court and an 800-metre jogging track.

In total, The Pinnacle@Duxton houses 1,848 flats.

Construction has since been completed, with the exception of some minor site works, such as landscaping.

Source : Business Times - 14 December 2009

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MINDY YONG

( +65 ) 91002985

mindy@mindyyong.com