HDB AFFORDABLE BUT WHY 40,000 HOUSEHOLDS IN ARREARS?

According to the TR Emeritus article “Khaw dismisses critics who feel housing is unaffordable” (Aug 22) – “For Sengkang, the situation is worse. 2-room flats are priced below ratio of 4, but 3-room and 4-room flats have ratios of 4.5 and 5.4 respectively. So, in fact, Sengkang 4-room BTO flats (ratio of 5.4) are considered unaffordable by the standards laid down by the World Bank and the United Nations.”

No more delinquency statistics?

In practically every country – the mortgage delinquency rates are a very important indicator of housing affordability.

However in Singapore, such statistics for public housing may not have been regularly published for many years already.

34,000 HDB households in arrears?

For example, according to the last published statistics, the Housing and Development Board provided financial assistance to more than 28,000 HDB households (2005 HDB Annual Report), and 7 per cent (over 6,000) of HDB bank loans were in arrears over three months (March 2007 Parliamentary Report).

In this connection, according to LeongSzeHian -

“Very few Compulsory Acquisitions?

Whenever the question was asked in Parliament, as to how many flats have been acquired by the HDB, the answer given seems to be a very small number.

Who will wait for Compulsory Acquisition?

We understand that it is common knowledge in the real estate industry, that HDB’s compulsory acquisition compensation is generally much lower than selling in the open market plus cash-over-valuation (COV).

So, why would anyone wait for HDB’s compulsory acquisition?

Disappearing delinquency statistics?

Once a flat is sold, it in a sense, it will disappear from the HDB loans in arrears over three months or compulsory acquisition statistics.

Why were banks allowed to offer HDB housing loans from 1 January, 2003?

One possible reason perhaps, may be that at its historical peak, more than 40,000 HDB households were in arrears over three months.

HDB annual reports used to have a statistic on the number of HDB households given financial assistance on a cumulative basis, but this has disappeared for many years.

No HDB bank loan statistics?

Since 1 January 2003, the HDB delinquency statistics have increasingly become more “incomplete”, as there are no publicly available statistics on HDB bank loans in arrears or foreclosures.

The HDB has said that it does not have the statistics on HDB bank loans in arrears or foreclosures.

Revisiting HDB compulsory acquisition in history?

In this connection, perhaps it may be interesting to reproduce an article which LeongSzeHian wrote in 2009 on HDB compulsory acquisition:

60,000 flats had problems paying?

“One out of every seven HDB flat owners have problems paying their mortgage loans. This seems to be what the statistics have revealed. Last year (2008), the HDB visited 60,000 flats which had problems paying their loans and gave financial counseling to 35,000 households.

This is 14 per cent of the estimated 420,000 HDB loan mortgages – or one in seven.

As of October last year, 33,000 HDB loans were in arrears over three months. This is about eight per cent of the total number who took HDB loans.

The number of flats which have been repossessed or surrendered to the HDB because of non-payment of mortgage loans is another worry.

According to a BeritaHarian report, 1,350 HDB flats were surrendered to the HDB in the last four years.

In February 2007, Parliament heard that 360 flat owners had voluntarily surrendered their flats from 2002 to 2006.

This means that the average number of flats surrendered per annum has increased from 72 (2002 to 2006) to 318 (2005 to March 2009).

This is an increase of about 342 per cent, or about one flat a day now.

This figure, however, does not include HDB flats on bank loans which are reportedly being foreclosed at about 60 a month. It also does not include those in arrears who have sold their flats in the open market.”

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