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Lawrence Wong: Gov Cannot Reduce Price of Land to Lower HDB Flat Prices

Deputy Prime Minister and Finance Minister Lawrence Wong has said that the government cannot simply sell state land at a lower cost to bring down the price of HDB flats.

He was responding in parliament to MPs who raised concerns and proposed solutions related to public housing prices.

Wong said that such a move could destabilise the market and does not address the underlying cause, which is Covid-era supply problems.

Wong said that from 2013 to 2019, HDB resale prices fell for 6 years straight and no one “seemed to be unduly concerned about the prices of new flats” at that time.

Instead, he said, there was “great anxiety that there would be a huge overhang of flats and we would end up with a price meltdown”.

Wong added that the pandemic caused delays to the BTO programme, disrupted supply and resulted in longer waiting times.

“People felt anxious and more started applying for BTO flats earlier; others decided to get a resale flat instead.”

Wong said that land for public housing is sold to the HDB at “fair market value”, and that the way land is priced cannot be changed arbitrarily to lower the cost of public housing.

“If you were to try to artificially reset the housing market in this manner, you will risk destabilising the entire property market.”

He added that what needs to be to bring prices down is the ramping up of BTO supply and catching up with delays caused by the pandemic.

As for the increase in the CPF Housing Grant, which has been widely criticised as a move that would push prices even higher, Wong said that there will “always be a risk like this when we increase grants”.

He said that the move is a “targeted support measure, rather than a broad-based move” and that the government had considered earlier property cooling measures and HDB’s progress in ramping up BTO supply in coming to a decision.

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