SINGAPORE �S CURRENT PUBLIC HOUSING POLICIES AND ITS IMPACT ON OWNERSHIP OF FIRST HAND HDB FLATS

Abstract

Since gaining independence, Singapore has undergone a massive urban transformation. Strong government support and financial commitment in providing subsidised housing contributed to the success of Singapore’s housing situation. Singapore’s public housing policies have played a critical role in promoting homeownership, achieving impressive results. The Singapore government has successfully housed 85 percent of its population in public housing flats, with 95 percent of residents being homeowners. While other advanced Asian countries such as Hong Kong have problems providing adequate affordable housing, Singapore has managed to provide quality housing at cheaper prices, extending housing assistance to even the poorest 20 percent of households in Singapore, offering them equal access to housing resources.

This dissertation examines the policies with which the government intervenes in the public housing market in Singapore. The various policies and schemes that have impacted public housing in Singapore, from 2001 to 2011, are discussed. Initial findings from a review of the literature revealed the effectiveness and impact of policies on increasing the affordability of and accessibility to first-hand public housing. Demand-side initiatives have been observed to have a profound influence in raising households' affordability levels and increasing the rate of homeownership.

Further research was undertaken, through interviews and surveys targeted at 150 Build-to-Order (BTO) and Design, Build and Sell Scheme (DBSS) homeowners and applicants. Interviews were set up with five HDB homeowners in view of understanding current housing problems with respect to affordability and accessibility. Information gathered was then used to generate survey questions, to recognise the general opinions of the public.

Primary data collected concurred with secondary sources and revealed that affordability of public housing was greatly increased through the use of Central Provident Fund (CPF) for monthly mortgage loans. For example, Singapore statistics reflected that 80 percent of new flat buyers service their flats entirely from CPF, without making any cash payments. This is reflected similarly through the conducted survey with 78 percent of the respondents servicing their mortgage loans solely through CPF. The shortfalls of the Housing and Development Board’s (HDB) housing allocation systems, such as long waiting times and unsatisfactory balloting process, were also discovered during research, substantiated with statistics and findings of other researchers. It was found that there were high dropout rates that falsely represented the demand of HDB flats. This was mainly due to applicants’ personal preferences that resulted in multiple ballots per applicant, in hope of choosing the best unit suited to their needs.

With a thorough understanding of the various causes of problems that lower affordability and hinder accessibility, recommendations with a multi-prong approach are formulated to fine-tune the schemes and processes. A feasibility analysis was also carried out to set realistic expectations.