Leong Sze Hian / Columnist
I refer to the article “Market-based pricing fairest for new HDB flats : Mah” (ST, Nov 19), which reported Minister for National Development Mr Mah Bow Tan’s reply to questions in Parliament.
Mr Mah said that as of October 2008, some 33,000 flat owners owed HDB arrears of three months or more.
The HDB used to publish, in its annual reports, the number of flat dwellers that it has provided financial assistance to.
The figure was 28,386 in its FY 2005/2006 annual report.
This is an increase of about 16 per cent, with 1 in 12 HDB mortgages in arrears. Why has this increased by so much, despite record jobs creation and good economic growth over the last two years?
How many flats have been compulsorily acquired by the HDB for defaulting on their mortgages?
How many flat owners have been forced to sell their flats in the open market, as I understand that many fear that the valuation for compulsory acquisition may be much lower?
The last time that the question was asked in Parliament in February 2007, as to how many HDB bank loans were in arrears over three months, the answer was seven per cent of HDB bank loans.
As I understand that there are about 100,000 HDB bank loans, has this statistic improved? Or is the number in arrears now still about 7,000 ?
By adding HDB loans and HDB bank loans in arrears, does it mean that a total of about 40,000 HDB mortgages are in arrears?
It has been reported in the media that an estimated 60 HDB flats on bank loans are foreclosed every month.
If we add to the ‘in arrears’ statistics, the number of bank loan foreclosures, HDB loan compulsory acquisitions, and defaulters who sell in the open market, what is the grand total of HDB owners who can’t pay their mortgage?
As to the somewhat consolatory statement that the 33,000 in arrears make up less than 8 per cent of the 420,000 households with outstanding HDB loans and has remained relatively stable over the last one year, in comparison, even at the height of the current sub-prime crisis in the United States, the estimated delinquency rate for home mortgages is only about five per cent.
According to the HDB’s 2007/2008 annual report, there were 8,475 approved applications for financial assistance measures for the year.
How many applications were not approved ?
Why not tell us the number who are still on financial assistance, instead of just those newly approved in a year?
Are the above statistics an indication that the affordability of HDB flats is an issue?
In reply to MP Liang Eng Hwa’s question on whether HDB flats are still affordable, it was said that currently HDB flat owners’ mortgage payments are on average below 25 per cent of their monthly household income.
This may perhaps be akin to stating the obvious, as those who can’t afford would not have purchased a flat, and those who bought but have defaulted and gave up their flats would no longer be in the “average affordability” statistic.
HDB policies such as the requirement to upgrade to a larger flat in order to qualify for a HDB concessionary loan, the income ceiling that households earning more than $2,000 and $3,000 monthly cannot purchase 2-room and 3-room flats respectively, and the 30-month waiting period for down-grading to a smaller new HDB flat, may be causing Singaporeans to buy larger flats that they can't afford.
Lastly, why is it that the HDB statistic for the number of flat dwellers that it has provided financial assistance to statistic is no longer available in its FY 2006/2007 and FY 2007/2008 annual reports?