This is a ‘cut’ I delivered in Parliament on 8 March 2013 during the Committee of Supply debate for the Ministry of National Development.
The Minister said in February this year that the prices of new HDB flats have been “delinked” from resale flat prices by varying the quantum of discounts applied to the selling price. He said that HDB will continue with this pricing policy for as long as “property remains hot”.
What is the criteria he will use to determine if the housing market is cool enough, resulting in the prices of new and resale flats being “linked” once again?
Would HDB consider permanently delinking the price of new and resale flats, so new flat buyers are not at the mercy of resale flat prices, which the Minister has said he is not able to control?
I understand from the Minister’s earlier replies in this House are that the factors used to determine the selling price of new flats include the typical household income of the families who buy them, the market price of similar resale flats in the vicinity and the attributes of the flats including their size and location. He said that HDB applies a discount to this price and gives housing grants to eligible buyers.
Could the Minister share with us what is the exact pricing formula used to string all these factors together to determine the selling price for new flats?
More specifically, what is the formula used to calculate the discount or “market subsidy”?
For future launches, could HDB publish the price of each new flat before and after the discount, so that home buyers will have a clearer picture of the market price of the new flats, and discounts that they are receiving from HDB?