Singapore Budget 2015: Ten more hawker centres to be built by 2027

Ten more hawker centres will be built over the next 12 years in a bid to moderate hawker rentals and keep food prices affordable, Second Minister for the Environment and Water Resources Grace Fu said yesterday.

The additional centres will be built in new estates or in existing ones that have relatively few hawker centres, such as Bidadari, Sengkang and Bukit Batok, Ms Fu told Parliament during the debate on her ministry's budget.

These will come on top of the 10 hawker centres in 10 years that the Ministry of the Environment and Water Resources (MEWR) had committed in 2011 to build. The first two of those centres will open in Bukit Panjang and Hougang this year.

"Altogether, the 20 new centres will inject an additional supply of more than 800 cooked food stalls and we believe this will help to further moderate rentals," Ms Fu said.

The 800 new stalls amount to a more than 10 per cent increase in cooked-food stalls here. As of January, there were 6,046 of them.

Raising the number of stalls is the latest in a series of policy changes to ensure that hawker centre food prices remain affordable, Ms Fu said in Mandarin.

Among other things, the Government has disallowed stallholders from subletting or assigning their stalls to someone else, and removed the concept of reserve rent so that stall rentals fully reflect market conditions - in some cases falling to as low as $1.

"Our hawker centres are essential social infrastructure - they provide a clean and hygienic environment for our hawkers to ply their trade and enable Singaporeans to access good food at affordable prices," Ms Fu added.

Adding more stalls is expected to help keep food prices in check, going by an analysis conducted last year by the Ministry of Trade and Industry and MEWR.

It showed that while the actual price of food may differ from one hawker centre to another, prices are on average 8.4 per cent lower if there is one other stall in the same centre selling a similar type of food. A hawker centre has about 50 stalls and there are usually a number of them selling similar types of food.

In response to concerns from Mr Yeo Guat Kwang (Ang Mo Kio GRC) about a 2013 report by the Consumers Association of Singapore that showed rising hawker centre rents were linked to more expensive food, Ms Fu said there is "little substantive evidence... that rentals are the main drivers of hawker food prices".

She said rentals typically comprise only about 12 per cent of a hawker's total costs - a small fraction compared to raw materials like ingredients, which make up more than 50 per cent of costs.

Manpower accounts for another 17 per cent of costs, while utilities take up 9 per cent.

Ms Fu also noted yesterday that over 85 per cent of hawkers pay less than $1,500 in monthly rent. Those who pay more are mostly located in the city, such as in Newton or Maxwell, she said.

In an area like Toa Payoh, hawker centre rents average around $650 a month, with more than half of the stalls - primarily subsidised ones - paying $320 or less.

Even if such stalls are excluded, average rents are about $1,100 a month. This "compares favourably to the coffee shops or foodcourts nearby", she added.

audreyt@sph.com.sg