Dawson Koo /
21 May 2011 denotes a significant milestone in Singapore’s history. Mr Mr Mah Bow Tan finally bowed out as the Minister for National Development (MND), after 12 years at the ministry. He will most likely be remembered for allowing prices of HDB flats to skyrocket in recent years, while he continued to insist on their affordability during his election campaign in April 2011. He failed to plan and anticipate demand, resulting in it outstripping supply.
Mr Mah incurred the unhappiness and dissatisfaction of many young Singaporeans whose salary didn’t keep pace with the rise in prices of flats. As a result, voters in his constituency of Tampines GRC slashed his vote share by almost 10 per cent from the 2006 elections to below the national average of 60 per cent.
Singaporeans’ unhappiness included having to resort to buying resale flats at sky-high prices, and be ladened with a 20 to 30-year debt. Balloting for a flat also became a blind stab in the dark, with many complaining that they were still unsuccessful after numerous attempts. The last proposal put up by Mr Mah before the elections, at the eleventh hour, is to increase the $8,000 income ceiling on flats to perhaps $10,000. This did not quell negative sentiments, instead he was accused of making things worse. Raising the ceiling meant that more people would join the queue, straining further the problem of insufficient supply.
One of HDB’s mottos is Providing Affordable, Quality Homes (available on their website) and it is one of the main goals for its establishment in February 1960. However, it seems that the HDB may have forgotten this goal. How can housing be affordable today when our CPF monies are almost emptied by the time we retire? With the continual rise of HDB prices, how will our current and future generations be able to afford a home?
Mr Khaw Boon Wan to the rescue?
After the elections, Mr Mah “stepped down” as MND Minister and Prime Minister Lee Hsien Loong appointed Health Minister Khaw Boon Wan to take charge of housing.
Mr Khaw promptly got to work right from the get go. During his first few weeks in office, he introduced a number of new initiatives. He first pledged to make “housing and HDB Singaporeans’ popular icon again“. Next, he started a new blog called Housing Matters at mndsingapore.wordpress.com. He ordered HDB to build flats ahead of demand in order to keep a healthy supply of them in the market.
On Sunday, he announced what could be a significant change in mindset by promising that more rental flats would be built for the poor and needy, to the tune of “tens of thousands”.
Analysts interviewed by Channel NewsAsia are optimistic that the property market may see further major changes under Mr Khaw’s leadership.
Colin Tan, head, research and consultancy, at Chesterton Suntec International, wrote an interesting article in the Today newspaper titled “Will there be a housing market overhaul?” on 27 May.
“I have been asked what I hoped for in new policies under Mr Khaw. I say, put aside for the time being, our goals of elevating Singapore to hubs of excellence in the various fields. Let us get our priorities right first. The rest will follow naturally.
As I see it, our new minister has two major problems that he has to deal with urgently – the seemingly unabated robust demand for new public housing flats despite the significant rise in supply. He has to isolate those buying in advance or panic buys from those needing their flats urgently and to help this latter group first.
The second is how to deal with the excessive liquidity that is flowing into property – primarily into housing.”
Only time will tell if Mr Khaw is a game changer and if his initiatives will live up to his promise.
For now, Mr Khaw is hitting all the right notes, quite different from the dissonant tune his predecessor had been singing. But there is still more to be done in terms of the affordability of public housing flats and this remains Mr Khaw’s biggest challenge.