Some changes needed to home ownership scheme

Blocks of HDB flats as viewed from SkyVille @ Dawson.
Blocks of HDB flats as viewed from SkyVille @ Dawson.PHOTO: ST FILE

Dr Thomas Lee Hock Seng stated that "what really needs to be done is to revert public housing to a long-term home ownership scheme to ensure that most people will have a roof over their heads" (Make long-term home ownership HDB's focus, Sept 5).

This was and should still be the Housing Board's main focus. A home is a basic need for anyone looking to start a family.

If the price of HDB flats keeps increasing at the current rate, it will come to a point where future generations will be unable to afford them. What will the social consequences be then?

At this juncture, HDB should consider making certain changes to the home ownership scheme. HDB should build and sell new flats at a very affordable price, taking into consideration the land cost, building cost and management cost. Subsequently, when the owner wants to sell the flat, it must be sold back to HDB at a certain price, taking into consideration the age of the flat, depreciation and inflation. A formula has to be worked out.

This will stem the lottery effect. The lower flat purchase price will also mean the owner will not have to utilise as much of his Central Provident Fund savings, and will not end up asset-rich and cash-poor.

For those who can afford it and want to upgrade or invest in property, they can purchase private housing, which is subject to market forces.

Tan Keng Hai

A version of this article appeared in the print edition of The Straits Times on September 09, 2019, with the headline 'Some changes needed to home ownership scheme'. Print Edition | Subscribe