Debated in Parliament on 2 Oct 2018.
Mr Saktiandi Supaat asked the Minister for National Development (a) whether the Ministry will issue monthly guidelines for buyers and sellers of HDB flats under the Ethnic Integration Policy (EIP) on the pegging of the fair market value of these flats at a certain percentage of the last transacted price in the open category; and (b) in the past three years, what is the average discounted price of EIP flats transacted compared to prices in the open market.
Mr Lim Biow Chuan asked the Minister for National Development whether HDB will consider introducing a policy akin to the Lease Buyback Scheme where HDB buys back flats belonging to non-Chinese flat owners when these owners are unable to sell their flats due to the Ethnic Integration Policy.
Mr Speaker, with your permission, I would like to take Question Nos 6 and 7 together.
Yes, please.
The Ethnic Integration Policy (EIP) was introduced in 1989 to ensure a balanced mix of ethnic groups living in Housing and Development Board (HDB) estates, so as to promote racial harmony and strengthen social cohesion. It applies to the sale and purchase of all new and resale HDB flats and is implemented for all ethnic groups.
The saleability of a flat in the open market is dependent on many factors and not just the EIP. While home owners may have their own expectations of how much their flat can sell for, flat attributes like location, storey height, physical condition of the flat, remaining lease and market sentiments would naturally be considered by prospective home buyers. To help home owners and buyers make an informed decision in their price negotiation, HDB provides daily updates of transacted prices of resale prices at the HDB InfoWEB.
For those who are unable to sell their flats, HDB may grant them an extension of time and advise them to be realistic with their asking prices. HDB will continue to exercise flexibility for households with exceptional circumstances. The EIP is an important policy that is applied to all ethnic groups consistently. There are no plans to buy back flats from flat owners who claim that they are unable to sell their flats due to EIP.
Mr Speaker: Mr Saktiandi Supaat.
Mr Speaker, I would like to thank the hon Minister for answering my question. I would just like to clarify that I fully support the EIP. But in relation to my question, why did HDB in the first instance have this extension option on a case-by-case basis? The feeling is, is it not because it recognises the EIP, the market can be squeezed by the buyers in principle? And the large number for appeals for extension, possibly, says something about the market. So, that is my first supplementary question.
The second is: I have been seeing a lot of residents from the minority ethnic groups, they are unable to sell their flats. Not so much unable to sell their flats, but also the ability to sell their flats at a high price. So, it is usually squeezed to the extent that they are only able to sell their flats at a much lower price than the market. So, my worry is about whether this policy could potentially contribute to this squeeze actually worsening over time, and we are worsening the cycle for some of those involved in the EIP.
Mr Speaker, in relation to the impact that EIP has on the market, we really have to look at it on both sides, both the purchase and the sale transaction.
In some instances, on the purchase side, it may help the buyer because the price may well be slightly lower; and on the flip side, of course, on the sales side, it sometimes may be more difficult. So, it really depends on the circumstance and on the nature of the transaction and for that particular location, which are the binding EIP limits. So, it can vary.
We put out data, information as far as possible to help facilitate the matching of demand and supply in the marketplace, and I think that is the right approach. But as I said earlier, we do monitor the situation carefully. We will extend assistance to those who need more time and we will continue to exercise flexibility for those who are in extenuating circumstances.
Mr Speaker: Mr Lim Biow Chuan.
I would like to ask the Minister. The Minister said that when the buyer buys the flat, do they get a discount, especially if they buy from HDB? Because my understanding is that they do not get a discount if they buy straight from HDB, but because of this EIP, it has squeezed demand for flats, and because of the squeeze on demand, the prices are affected. And prices come down, so why should the sellers be prejudiced because they are affected by the EIP in having to sell at a lower price, unless they are correspondingly given a discount when they first buy the flat, which is why I asked whether would HDB then step in to treat them as if this is a Lease Buyback Scheme.
I thank the Member for the supplementary question. I was referring to the resale market. In the Build-To-Order (BTO) market, the prices are uniform. But in the resale market, when you make a purchase, the EIP can have an impact, just as when you make a sale decision, the EIP can have an impact. We recognise that there will be impact in the market with an EIP. This is bound to happen.
So, as I said, we will continue to monitor this very carefully to make sure that while we all recognise the merits of having an EIP system, we want the housing market to also be fair to all Singaporeans at the same time, and not to affect any particular group disproportionately. So, we will continue to monitor the system, make sure it works well, achieves the goals that we want it to achieve, and, where possible, continue to exercise flexibility in the way we administer the scheme.
Mr Speaker: Mr Saktiandi Supaat.
I would like to thank the Minister again for the answer just now. Just a follow-up in relation to my question. In the meantime, while we try to list some of the concerns of the residents that are having difficulties in selling, my suggestion is maybe by having a sharing of monthly guidelines for buyers and sellers in particular for the EIP scheme, will that in some way be a valuable suggestion in terms of the Ministry of National Development nudging buyers and sellers in that EIP locale to reduce the squeeze on the pricing of the units?
Mr Speaker, whatever we can do, particularly where it involves putting up more information in the marketplace to better help the matching of demand and supply, is worth considering, and so whatever we can do to provide more information to facilitate a better marketplace, those are things we will certainly consider and try our best to support.
Mr Speaker: Mr Chong Kee Hiong.
I see more of such cases in my Meet-the-People Sessions, especially in recent months. HDB does give extension of time, but the common feedback is that despite extension of time, there are no viewers. So, if there are no viewers, that means there is no offer at all. Can I ask the Minister whether there are any other ways to help these residents, especially those who have tried for many months and even years to sell their flats, especially if they are elderly?
Mr Speaker, I appreciate Mr Chong raising the issues that residents face. We really have to look at it case by case, because there are indeed instances where the residents have said they find it difficult. But we have seen recent transactions within that same neighbourhood where transactions have taken place. So, we really have to look at the specific location, the specific appeal, and we will, like I said, do our best to assist those cases.
Mr Speaker: Mr Pritam Singh.
Can I clarify with the Minister if there are any statistics available on the number of minorities who own such HDB flats? How much feedback has gone to HDB about their inability to sell their unit because of the EIP policy? Is there any data the Minister has on hand?
We have between 2015 and 2017, received about 1,600 appeals for waiver of EIP. So, those are the statistics I have that are available. If Mr Pritam Singh would like to ask more in-depth questions on other data, we can easily follow up in a separate Parliamentary Question.
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