Maintain a Surplus of HDB Flats

Some years ago, there was a surplus of HDB flats that was described in some quarters as mismanagement on the part of HDB arising from an over-projection of the demand for flats. I personally do not see having a surplus as a problem. A surplus of HDB flats enables first-timers to get flats sooner, perhaps a year or two earlier.

The government might like to think of the cost of empty flats as a subsidy in terms of time to first-timer flat applicants. Early acquisition of a home to call one’s own can make a positive difference to the willingness to have a children. As such, surplus flats are compatible with Singapore’s needs. The question then arises of how to manage the flat supply.

The quantity of the stock of flats should me managed so as to ensure a healthy but not excessive level of surplus flats. To do this, the key is to launch the next project only when the stock of remaining flats falls below some critical level. This critical level should be determined based on (i) the lead time from launch to the handover of keys, (ii) the number of flats to be built in the next project in the pipeline, and (iii) the estimated demand for flats over the next few years.

To manage the quality of the stock of flats, the key is to ensure that older flats get sold first by policy means (e.g.: not allowing a flat to be sold if a flat two years older is still on the market) or market means (e.g.: discounting older flats slightly).

Surplus flats can be a strategic tool to achieve national objectives, and should be used as such.