But the Pinnacle at Tanjong Pagar might not have been built if National Development Minister Mah Bow Tan had not won over his colleagues in the Cabinet.
With the prime land slated for residential development, "the question facing us was whether we should have built private property — that means tender out the land for private property — or built HDB", Mr Mah revealed on Sunday night on Talking Point, a news analysis programme on Channel NewsAsia.
The Pinnacle a Talking Point
Mr Mah "convinced" his fellow ministers of the need to rejuvenate the area — "that we continue to have younger people moving into that area and that HDB owners are still able to live in a relatively expensive area in downtown".
While one viewer had found it "unbelievable" that Pinnacle flats were being sold between S$500,000 and S$600,000, Mr Mah said it was a question of location and of the Housing and Development Board (HDB) catering not just to the low income.
"Our housing (income) ceiling goes all the way up to S$8,000, which is, by any standards, upper—middle income, and that’s why we have to build many different varieties of flats, and the Pinnacle is one of them," said Mr Mah.
HDB will also build more executive condominiums — now about 10 per cent of flats built — if demand goes up.
But the majority of flats will still be three—, four— and five—roomers in non—mature estates. And "we make sure we don’t overbuild because once you overbuild, you’ll make flat prices in future go down, and that’s not what we want", he said.
Public housing prices was one of the key issues in the special 45—minute show, hosted by Channel NewsAsia’s chief editor Debra Soon, which also featured Member of Parliament Lim Wee Kiak (Sembawang GRC) and Ngee Ann Polytechnic real estate lecturer Nicholas Mak.
High cash over valuation (COV), in particular, has been a bane to some home buyers, especially those with ample Central Provident Fund (CPF) money but not cash, said Dr Lim, who wondered if the valuations given by private valuers to HDB need to catch up with the market.
But COV could also act to "retard" price growth, Mr Mak told MediaCorp, "since most buyers have limited cash to pay for the COV".
"If the valuation of the flat is growing at a slower rate, the rate of growth of resale prices can decelerate," he explained after the show.
As to whether valuations are moving too slowly, Mr Mah said the time gap has been "shortened considerably" to a "matter of weeks".
A more fundamental question is whether Singaporeans want the government to control resale flat prices, said Mr Mah.
"When people talk about controlling COV ... they’re talking about dampening prices, they’re saying let’s ban COVs," Mr Mah told Dr Lim, who asked for "a little bit more" in grants to those who buy resale. "If we control resale flat prices, we’re actually moving away from the free market, which fundamentally would not be in the interest of homeowners."
On the recent measures to curb speculative demand in the resale market — increasing the Minimum Occupation Period from one to three years — Mr Mah said that it was not a "blunt instrument" as Mr Mak felt, but "very calibrated, very measured".
While some people might want the Government to do more so that prices fall faster, Mr Mah stressed that only a specific group of people who are not buying for home ownership and the long term were being targeted.
"You can call it speculation — some people can say they just want to buy short term, some people want to buy for rental yield," he said.
While the numbers in this group are small, they are starting to grow, so HDB raised the hurdle for them.
As to why HDB owners are allowed to buy private property, Mr Mah said, "This is an upgrading opportunity I think all Singaporeans would like to have. They would like to see their lifestyles improve."
According to Dr Lim, there is "grumbling on the ground" about people buying HDB flats and not living in them.
To which Mr Mah said the HDB would "take drastic action" against those who exploit the rules.
"When you hear of those cases, you let us know," he said, two days after the HDB announced it had repossessed one flat for unauthorised subletting, following a tip—off.
Catch the Talking Point Special on Monday, March 15, at 8.30pm on Channel NewsAsia.
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