Singapore will provide more 2-room and 3-room government flats next year. This was announced by Minister for National Development, Mah Bow Tan in Parliament when addressing the rising demand for such units. He said that this would help lower income families to own their own homes, as well as those that needed to downgrade their homes in these troubled times

Home ownership has always been a primary focus of the government. Since it came into power in 1965, the PAP (People’s Action Party) has been busily building affordable public housing to meet the needs of the general population. From modest 5 storey 1 and 2 room walk up flats in early years to the 50 storey 4 and 5 room apartments today, the government has always monitored the changing housing trends in supply and demand.

Singapore 2nd Generation HBD Apartments at Rochor Constituency

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Practical Public Housing

The approach to public housing has been a based on trial and error. After more than 40 years of holding the reigns, the PAP has now adopted a build-to-order system in determining the number of public housing units to be constructed. This system caters to the majority of existing and incumbent owners of such units. But the aim of supplying more 2 and 3 room dwellings is to cater to a small ratio of such owners.

Recognizing the plight of lower income families, though they be few in number is how the government has been able to remain relevant to its population all these years. The rapid construction of these smaller dwellings is evidence of this. In today’s ever changing world, a country as small as Singapore can only survive if it adapts in tandem to the sudden changes of these modern times.

Public housing must be practical if it is to cater to the needs of the people. And it is this founding principle that has now prompted the government to adjust its direction in ensuring that as many people as possible can afford to buy their own homes. People are Singapore’s most vital resource.

Public Housing Across the Board

As a broad-based middle income society, it is of no surprise that the majority of Singapore’s public housing units cater to this category of wager earners. A lot of emphasis has been put into ensuring that people can afford to own their own homes. The government sees home ownership as a means to encourage people to take an active stake in Singapore’s future as a nation. With this concept in mind, public housing remains affordable at realistic prices. The HDB (Housing Development Board) ensures that this is so.

The Pinnacle @ Duxton - Design Build and Sell Scheme 50 storey Apartments

The HDB’s Design, Build and Sell Scheme is the latest scheme that the government has introduced in it’s efforts to maintain the ratio of supply to demand in public housing. By virtue of the demand for specific types of flats, clusters of such flat types are constructed once a minimum percentage of take-up has been reached or after 4 years of public offering. This scheme is ideal in regulating the supply of public housing to the upper middle income households.

General Categorization of HDB Apartments

From the small first generation HDB 5 to 10 storey flats that share a common corridor to the condominium-like apartments complete with lush landscaping and aesthetic interior and exterior design that cater to the upper middle class, public housing constitutes more than 80 percent of the homes in Singapore. A general categorization allocates 1 (studio) and 2 room flats for lower income households while 3 and 4 room apartments cater to the broader middle income households. Flatted double storey massionettes, 5 room apartments, and executive apartments predominantly cater to the upper middle income households.

Note: Limited batches of multigeneration 6 and 7 room flats were constructed in the mid 1980s. Construction of this flat type was discontinued shortly after due to poor demand.

Singapore’s Budget Statement for 2009 is eagerly anticipated. It is seen as pivotal to the outcome of both local and foreign businesses operating here in Singapore. As a matter of fact, it is so important that the Government has brought it forward to January 2009. The policies laid down in this Statement shall indicate the Government’s response in relation to the bleak world economic forecast for the year 2009.

Addressing a recent partisan assembly, Prime Minister Lee Hsien Loong announced that Singapore’s economy could possibly be negative next year. With the threat of slowing economic growth looming ominously on the horizon, PM Lee revealed the Government’s intention in expediently adjusting financial and economic policies to meet the global economic downturn by releasing the Budget Statement one month ahead of schedule.

Singapore pushes ahead with Infrastructural Developments

Expedient Response is Vital to Real Estate Value

Singapore’s ability to quickly respond to changing world economic conditions has done much to stabilize local real estate value. This was evident during the SARS epidemic and the Asian Financial Crisis. Back then, the Budget statement had also been adjusted to stimulate the economy and support jobs while strengthening the economy at the same time. As the Government was able to minimize businesses casualties, the demand for commercial properties dipped slightly.

Real estate stability here is an incidental result of the Government’s emphasis on helping companies cope with the challenges ahead. This not only safeguards jobs but in so doing, ensures that industrial, commercial, and residential occupancy rates remain at an optimum in relation to the economy.

As was previously projected, real estate value is not expected to see a dip beyond 10% in the coming year ahead. It is speculated that the Budget Report 2009 shall further consolidate this position in the face of weaker tourism and domestic exports.

Market Indicators

In its weakest showing since September of 2007, the Singapore dollar fell to a low of 1.5253 against the US greenback. As Singapore is heavily dependent on tourism and trade, a weaker Singapore dollar is seen as positive direction in securing competitiveness and maintaining economic stability. The MAS (Monetary Authority of Singapore), which plays a key role in regulating and adjusting its monetary policies is also expected to bring forward its policy review to further boost Singapore’s competitiveness as and when necessary.

In breaking news, Las Vegas Sands Corp is reported to have announced that it has raised enough funds to complete construction of the Marina Bay Sands. It says that it is halting its Macau and Las Vegas projects and therefore can proceed with Marina Bay Sands without assistance from the Singapore Government. The continuance of this development amid worldwide economic uncertainty highlights confidence in both local commerce and real estate value.

And in other local news, the government has announced that it will enhance schemes to help businesses here to secure loans from banks. Finance Minister Tharman Shanmugaratnam was cited as saying that the government will be announcing ‘enhancement of loan schemes that will involve risk sharing with the banks so that they maintain access to credit on the part of our companies’. As a point of note, the Government is more than able to do this as all the local banks in Singapore are semi-Government institutions.

Existing Policies in Place

Finance Minister Tharman Shanmugaraynam also addressed the issue of Singapore’s budget deficit for the year 2008. He was reported as saying that this deficit was expected to triple to over S$2.4 billion. Although this is much higher that what was initially expected by the Government, Tharman attributed this to ‘higher infrastructure costs, additional spending on procreation measures and lower revenues collected”.

Tharman reiterated the government’s stance on raising expenditures that will facilitate a more expansionary budget given the current economic slowdown. The funding for this deficit shall not come from trimming Government spending or raising revenues. He affirmed that the funding for this deficit shall come from last year’s S$6.4 billion Budget surplus. He maintained that ‘the larger deficit is an appropriate fiscal stance in the context of an economy that has entered a slowdown’.

History has shown that such Government policies have been very effective in countering economic slowdowns and buffering the impact of economic recessionary waves. Most countries in the region cut down on costs and brace themselves to face economic recessions, and then struggle to recover throughout the aftermath of such recessions. Singapore builds itself up during such periods in preparation of the conclusion of economic recessions.

Singapore’s proactive response by stimulating the economy and providing aid to businesses saves companies and jobs and in so doing, supports local the real estate sector. For when far less companies go under, occupancy rates remain high and, supply and demand for real estate remains stable.