TO those who say the wide-ranging housing measures benefiting home buyers of different income groups are an election package, Minister of National Development Khaw Boon Wan says his housing policies have little to do with the general election (GE).
"If you have been watching what we have been doing since I entered MND (Ministry of National Development) more than four years ago, we have been making adjustments practically every year. My objectives are quite clear - that home ownership is a very important part of the governance of Singapore."
Speaking to reporters at the HDB Hub on Monday, he added that he has focused on specific groups of people in turn; the latest measures target middle to higher-income groups, singles and home renters, now that the Build-To-Order (BTO) backlog for first-timer newly-weds has mostly been cleared.
"That is how I approach the problem. Has it got to do with GE? I do not care less when the GE is, but problems need to be resolved and when I am ready, I come up with a scheme and discuss it with Singaporeans. And once I am convinced that those are practical schemes, I will launch it as soon as we can do so."
He was also asked whether the latest policy changes could have negative consequences; for instance, could the higher income ceiling lead to more competition for BTO flats, now that households earning S$10,000 to S$12,000 are also eligible to apply for them? Or could developers of executive condominiums (ECs) be more bullish in their pricing in view of the larger demand pie?
Mr Khaw said that he believed the market would regulate itself. In any case, the government has levers to pull, be it to slow down its BTO building programme, or to release EC government land for sale semi-annually.
He agreed, however, that there will be market shifts. "Some EC buyers may move into BTO applications; some BTO applications may go up to ECs and so on. At the borders of ECs and condos, there will also be movements. The key point is we have leverage over the supply and we can adjust the supply, expanding and reducing as necessary."
Whether private home owners or couples who formerly exceeded the income cap will move into the public housing market now would be a matter of personal decision, one which the government would leave to Singaporeans to decide, he said. "We make options available, so they are then free to choose."
Consultants agree that market shifts will happen, but differ on how the higher income ceiling will affect different property classes.
For example, SLP International executive director Nicholas Mak said that it could be a "zero-sum game" for the EC primary market, which could gain new buyers from the S$12,000 to S$14,000 income group, but lose those from the S$10,000 to S$12,000 group to HDB BTO flats.
He expects a jump in EC developer sales in the next few months; the four ECs ready for launch between now and year's end - two in Yishun, one in Sembawang and one in Choa Chu Kang - could jointly yield 2,200 units.
"So it's a good thing for ECs in the short term, but in the medium term, it's a zero-sum game. High-quality and well-located BTO projects can also draw buyers away from the EC market. I think the market will reach a new equilibrium, returning to normal in one to two years."
ERA Realty key executive officer Eugene Lim said that even if EC developers raise prices now, their priority would still be to get more sales.
R'ST Research director Ong Kah Seng said that the higher ceiling could siphon some demand away from new suburban condominium sales; on the other hand, this may not happen if HDB flat owners prefer to hold a condo unit to reap rental income, given that they cannot do this with an EC unit within five years of purchasing it.
It has been a challenging year for EC sales. Desmond Sim, head of Singapore and South-east Asia at CBRE Research, said that unsold EC units stood at an unprecedented 5,200 units as at last month.
Mr Khaw said that, given the huge supply and pipeline, EC developers may have to lower prices. "So, as I said, at the borders, there will be some adjustments. Some pluses, some minuses. But the key point is we have leverage, we can control. It is like a tap."
HDB's tap is the number of BTO units it launches each quarter; URA's is the amount of land it releases for sale every six months.
As regulators, developers and price-setters, they can calibrate the balance in housing demand and supply. With the Central Provident Fund, these are the institutions that give Singapore's housing authorities more power than those in other major cities, Mr Khaw said.