Public housing policies must serve long-term needs

Housing Board flats in Bishan.
Housing Board flats in Bishan.ST PHOTO: DESMOND WEE

I do not think young buyers with little Central Provident Fund (CPF) savings would be deterred by the new rules on housing loans and do not agree with Mr Timothy Toh (Changes to CPF, HDB rules present many challenges, May 20).

The authorities had stated that only a very small percentage of buyers will be affected by the new rules, which were intended to promote overall longer-term financial prudence for those acquiring a home, building a family and planning for retirement.

These measures should be applauded for curbing excessive speculation in public housing units, especially given the challenging economic environment and the prospect of Singaporeans living longer on average.

The young, with limited CPF savings and cash in hand, should not aim to maximise and securitise their future CPF savings to buy a public housing unit beyond their means.

Some young couples, as first-time buyers, as well as young adults jointly with elderly parents, purchase resale public housing units in mature estates or core city areas ranging from $900,000 to $1.2 million.

Subsequently, they apply to rent out one or two rooms for high cash rental yields.

These buyers also hope that after the minimum occupation period, they will qualify to apply for a new public housing unit within the same district.

Some may even qualify for proximity housing grants for living near their elderly parents.

Such buyers, though small in number, are actually paying a premium now for a future entitlement to enjoy "two bites of the cherry" of public housing within the same mature estates or city core areas.

Public housing policies must serve the long-term interests of the general public, and not just the few young and savvy buyers or those gaming it for the lottery effect.

Sum Kam Weng

A version of this article appeared in the print edition of The Straits Times on May 24, 2019, with the headline 'Public housing policies must serve long-term needs'. Print Edition | Subscribe