Monday, 13 June 2011

Everybody wants a flat in a convenient location...

I was appalled to read Gladys Chung’s reflections on housing for first time couples looking for their first homes (We want a flat in a convenient location…The Sunday Times, 12 Jun -see article below). She lamented that she and her fiancé were not able to secure a Build-to-Order (BTO) flat in a mature estate and would not try again unless it was in areas they favour.

She dismisses the higher chances of snarling a more affordable flat in an outlying estate as she sees little value in buying a home for a lower price but end up spending more on transport. The couple even contemplated moving overseas, do they realize the costs of housing in vibrant cities such as Hong Kong, Shanghai, London or New York, one would struggle just to pay the rent while buying property is out of the question for most people.

Her suggestion on allowing first-time home owners to rent out the whole flat without having to wait out the 5 years minimum occupation period (MOP) in order that her finance and herself can use the rental income to eventually buy another home near their parents is ridiculous and clearly contrary to the idea that HDB flats are for owner-occupation and not meant for speculation and profit. Too many first-time couples have this notion of buying a new HDB flat without ever wanting to make it their home, they invariably contribute to the current demand and potential housing glut.

While everybody wants a home in a convenient location, it is virtually impossible in land scarce Singapore and who is to say that ulu locations such as Sengkang or Punggol would not be bustling estates in future.



However, I do agree with her other suggestion on sacrificing some Government land parcels in mature estates for BTO flats instead of selling to private developers. The Government must learn to lose and give in sometimes instead of being kiasu and always going after the best deal.

Gladys, is sadly part of a generation that demands (not wants) instant gratification while showing little determination to succeed. If they don't get what they want, they threaten to leave Singapore instead, former Minister Mah Bow Tan can, at last, afford a smile after reading this self-serving article.


We want a flat in a convenient location...
First-time owners may not need to settle for less if mature estates get more BTO units
By Gladys Chung


I am getting married in six months. But my fiance and I have not settled on a flat yet as we are hoping to get a new Build-to-Order (BTO) Housing Board unit in a mature estate. In the meantime, we will be bunking in with my in-laws.


We sing the same tune as many other young couples: We want to be in a convenient location - one that's near our parents and in-laws. We are in our late 20s and cannot afford to pay $1 million or more for private housing. We don't want to spend on a pricey resale HDB flat either.

Anyway, I believe there's more to life than being shackled to an exorbitant housing loan for 30 years.
Like my fiance, who works in a bank, I don't see the point of buying a home in an outlying estate for a lower price when we will end up spending more on transport. For me, settling for such a flat just because it is more affordable and I have a greater chance of getting one, is as flawed a decision as buying an ill-fitting skirt just because it is on discount.

We were among the thousands rejected for the Dawson BTO flats in Queenstown that were launched in 2009. The combined 1,718 flats at SkyVille@Dawson and Sky Terrace@Dawson garnered 10,098 applications.

Apart from balloting for some leftover flats in Hougang last year - again, we were not selected - we haven't applied for a flat since because most of the BTOs were not in areas we favour. My parents live in Serangoon Gardens, so I hope to get a flat in Bishan, Ang Mo Kio or Toa Payoh.

My fiance and I were even wondering if we should leave Singapore and explore options elsewhere - since we could not afford to buy a home here in a location we loved, we thought we might as well delay our plans to have a baby right after marriage, relocate somewhere with more exciting opportunities and pay rent.

Then, Mr Khaw Boon Wan came into the picture. Just weeks after he took over the reins at the Ministry of National Development in May, he stated in a post on his Housing Matters blog that he was looking to 'put up more sites in mature estates'.

'We... should try to meet the aspirations of many young couples wanting to set up nests near their parents,' he wrote. He also mentioned that mature estates such as Kallang/Whampoa could be BTO sites next year.

To us, his words signalled a shift in policy as his predecessor Mah Bow Tan had said that most of the BTO supply would be located in non-mature estates such as Sengkang, Punggol and Sembawang.

Naturally, I was thrilled by Mr Khaw's words. I have returned to daydreaming about owning a home that is near suburban malls, established facilities, a bus interchange and an MRT station - instead of one in a foreign land. I have signed up for the HDB eAlert Service so I can be kept informed of the latest launches, and I am all ready to ballot for a flat in my dream location.

For now, allow me to make some suggestions about how the Government can make lives easier for young couples looking for their first homes.

Sacrifice some Government land parcels in mature estates and allocate them for BTO flats instead of selling them to private developers.

Filling government coffers should come second to ensuring that young couples can afford to buy homes they want to live in - especially since the local birth rate hit at an all-time low of 1.16 last year, down from 1.22 in 2009, and way below the replacement level of 2.1.

Do away with the minimum occupation period (MOP) of five years for first-time home owners.

If couples have to buy a flat from an outlying estate in order to own a home, then allow them to rent out the whole flat without having to wait out the MOP. For my fiance and myself, the money would help us save enough to eventually buy another place near our parents. Meanwhile, we could live with my in-laws, who will be a great help when I have children.

There are ways to avoid abuse by opportunists.

Currently, HDB flat owners are not allowed to own a private property during the MOP. Thus, no one can vie for an HDB flat just so they can earn rental income while living in a private property of their own elsewhere.

Furthermore, there is a dearth of rental flats for divorcees with children who need temporary accommodation, as Mr Khaw pointed out at a youth forum last month. First-time home owners who want to rent out their flats can be matched with these divorcees, or with young Singaporean couples who need an interim space before they buy their own homes.

Work on improving facilities and transportation systems in non-mature estates.
Build more MRT stations, suburban malls and facilities in these areas. Once Sengkang or Bukit Panjang looks like another bustling Serangoon Central or Bishan, who wouldn't want to live there?


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