Non-Open Market (NOM) flats that do not include land costs in their price should be introduced into the public housing system, the opposition Singapore Democratic Party (SDP) said yesterday when it unveiled its housing policy at the SDP office in Ang Mo Kio.
The party said its aim was to make public housing more affordable and accessible to Singaporeans. The policy paper was presented by the party's vice-chairman John Tan and treasurer Bryan Lim.
The SDP has proposed that the price of new Housing Board (HDB) flats include administrative, material and labour costs, but not the cost of land.
The party calculated that, as a result, prices of flats could be substantially lower, ranging from $70,000 for two-room flats to $240,000 for five-room flats.
It added that Singaporeans who purchase these flats could expect to take nine to 15 years to pay off their housing loans, based on an interest rate of 3 per cent, using no more than 20 per cent of their gross income.
"This further reduces the financial burden of home buyers," the SDP said in a press release.
Flats bought under this scheme will not be allowed to be resold in the open market... Owners will have to sell the flats back to HDB under the scheme proposed by the party. Current home owners can choose to convert their existing flats to a NOM flat.
The lowered housing expenditure could free up capital for home owners to save for their retirement, the party added.
"As the name implies, however, flats bought under this scheme will not be allowed to be resold in the open market," Mr Lim said.
Instead, owners will have to sell the flats back to HDB under the scheme proposed by the party.
Current home owners can choose to convert their existing flats to a NOM flat.
In such a case, the Government will return the difference between the original price of a flat purchased from the HDB and the price of an equivalent NOM flat subject to a cap.
This money will be credited to the owner's Central Provident Fund account or used to pay any outstanding housing loan.
Mr Lim said that the rationale for NOM flats is that the "Government should not profit from Singaporeans when it comes to public housing, and Singaporeans should not use it as a means of investment for capital gain".
SDP said: "Public housing is a social good and should be used to meet the housing needs of the population, not profit-making for the Government or citizens.
"The NOM scheme essentially gives Singaporeans an added option of buying a home at a greatly reduced price. First-time HDB buyers can choose to buy an open market or non-open market flat."
The SDP has also proposed implementing a scheme that grants balloting priority in non-mature estates for first-timer families with children or couples who are expecting. Single-parent families with children and singles should also be able to purchase and own flats, the party said.