What the news of the numbers of PRs owning HDB flats (and how it was reported) tells us

In Political economy, Political governance, Property on 29/11/2011 at 6:31 pm

(I waited eight days after the data on PRs owning HDB flats came out because I wanted to see if the local MSM would give a favourable-  to the government- spin on the data, which the MSM could reasonably do. The MSM was silent.)

Last Tueday, BT reported that  S’pore permanent residents (PRs) owned some 48,700 HDB flats as at September 2011 , according to the Ministry of National Development. It was answering a PAP MP’s question. According to this, there were approximately 1,038,473 flats as of May 201o.

This means that 4.7% of HDB flats are owned by PRs. So those lurid figures (over 20%, if I remember correctly) claimed by TR are not true.

It was also reported that 39,100 units in the 3rd Quarter 2011, are rented out. Assuming that the rentees are all FTs (PRs and other foreigners), a not unfair assumption, this means only 8.5% of the flats are occupied by FTs. Again, nothing near what TR claimed (over 30% from memory). 

Now as PRs are 13.9% of the resident population or 10.2% of the total population*, and PRs and other FTs 37.1% of the total population, these HDB numbers indicate that PRs and other FTs cannot be a major cause of HDB price rises. If  the 8.5% of the flats are occupied by FTs were 30- 40% (in line with their share of the population), then they would be a major cause of price rises. So Mah was right to he said that PRs and other FTs had no or little effect on public housing prices?

The way to look at this piece of data in relation to all the data made available is that FTs  have an effect (disproportionate perhaps?) because the supply was not keeping pace with demand given the influx of FTs. Khaw’s programme of building a surplus buffer is an admission that there was insufficient supply when the FTs were flooding in, courtesy of the government that we voted in in 2006.

No surprise then that the government and PAP spin doctors, and ST and MediaCorp staff missed telling us shumething important. This piece of info shows that Minister Mah did not know the numbers, or was fibbing when he said that PRs and FTs had no or little effect on public housing prices. They had an effect because he goofed, and then was in denial.  Hence the silence when the local MSM or spin doctors could have rubbished TR’s assertions, and the belief that FTs are the the major cause for HDB price rises?

This piece of information helps give some perspective to the ongoing (often heated and irrational on both sides) debate on public housing and immigration. Yet it only appeared in BT, which is behind a pay wall most of the day. Later Yahoo! reported it. This reminds me of what David Boey in a letter to Voices wrote, ” [R]elevant information is sometimes unavailable to the public or is not presented in a consistent format to facilitate analysis.”

How true and sad. Can fix this lack of info or not, PM? Will be a test of your promise of more openness, and change.


*”Singapore’s total population stood at 5.18 million as at end-June 2011. There were 3.79 million Singapore residents, comprising 3.26 million Singapore citizens and 0.53 million permanent residents, and 1.39 million non-resident foreigners, ” Department of Statistics report released on September 28th 2011.

“Singapore’s total population stood at 5.18 million as at end-June 2011. There were 3.79 million Singapore residents, comprising 3.26 million Singapore citizens and 0.53 million permanent residents, and 1.39 million non-resident foreigners.”

  1. “It was also reported that 39,100 units in the 3rd Quarter 2011, are rented out.”
    Keep in mind these are only the officially rented out units – where the minimum occupation criteria etc. has been met and HDB consent has been obtained.
    I suspect there are quite a few who do not get official consent – either because they dont qualify, or they dont want to pay tax on the rent.
    But I believe HDB has been cracking down on this problem after turning 2 blind eyes to it pre-election.

  2. Aiyah, old horse was simply given the broad helicopter or satellite picture by MND. That’s why he kept saying the magic 5% figure lah. But he forgot this is against backdrop of 1 million HDB flats built from 1960 until now. From 1960 to 2004, 95+% of HDB buyers are citizen. Horse forgot to look at the more recent slices of marginal demand and buyer makeup from 2006-2011. Unhappiness occurs at the margins when new couples are not able to afford resale HDB in mature estates and parents have to cough up their retirement funds to help children to buy. In addition to the fact that those who tikam for BTO had to tikam 5-6 times and some still don’t get a call from HDB.
    Even property agents (like PropNex CEO) were saying in 2010 and 2011 that PRs made up 20+% of their resale HDB buyers. They are the last people to admit since they have vested interest, and they don’t want govt to either build more BTOs, or slow down intake of PRs/foreigners. See now with Cow in the picture, those property agents are losing many potential resale buyers to large BTO exercises.

  3. The share of HDB flats owned or rented by PRs does not have to be anywhere near the percentage of PRs in the general population for them to have an effect on the market. Take the stock market. The volume of shares of a company traded every day may be only a few percent of the total shares outstanding, but obviously this is sufficient for big price moves. As abc above said, it is the marginal buyer and seller action that counts.

    As for what Mah Bow Tan said, not that it really matters now, I suppose he was just being defensive of his record and his authority in the customary PAP way. “We have a meritocratic system, so I must be the best for the job, so anyone who criticizes me must be wrong.” He may have told people that PRs make up a small share of the buying and selling action, knowing people will think that therefore they cannot be causing the price upswing.

  4. Your point that ownership is directly proportional to price may be flawed.

    IMO, absolute numbers do not tell the whole story. For instance, there is no breakdown of progressive ownership (and therefore aggregation) over say the past one or two decades. Obviously, if ownership of flats by PR is spread out with gradual increases over more years it would likely NOT have an impact on prices.

    However, lets say, if a big slice of the total number of purchases by PR’s occurred only during the past few years, i.e. a spike in demand by PR, it would MOST certainly IMO also cause a corresponding spike in market prices, as in all things -the familiar sellers’ market during a certain short period. This is entirely probable when the demand comes from well to do PR who can afford to outbid the average Singaporean looking for a flat.

  5. Very amusing… 8.5% of the flats are occupied by non-citizens who account for 37.1% of the population. Do you see something wrong here? Where do the vast majority of non-citizens (almost 2 million of them!) live? Without transparency, you will always get this kind of nonsense!

  6. “S’pore permanent residents (PRs) owned some 48,700 HDB flats as at September 2011.”
    Does this figure refer to all the PRs who have fully paid up their HDB flat. What about those PRs that have not fully owned the HDB flats.(ie those still have their flat mortgaged)

  7. The numbers are selectively presented. Does PR ownership refers to both owners being PRs or does it exclude those where one has converted to citizen. Every term in such reports are not defined clearly. Just like how we have come to realise the transport ministry’s definition of “peak hour” is actually only one hour of the day with the exact time not revealed.

  8. Hi, good write-up. Would like to make 2 points here:

    First of all, if I recalled correctly, TR wasn’t wrong to report about 20% of HDB resale flats are acquired by PRs. TR, I think, was reporting from Khaw’s blog. Khaw revealed that about 20% of the sale of HDB resale flats involves PRs last year.


    The figures of 48,700 HDB flats owned by PRs and total of 1,038,473 HDB flats refer to the current overall ownership situation. Certainly, as a %, we expect PR ownership to be small since HDB flats can be owned by PRs only not too long ago. For a long time since the founding of Singapore, HDB ownership is off-limit to PRs.

    Secondly, just want to say that if you are play the market, you would know that you don’t need majority of transactions to push up the market. It only requires a small percentage of the stock to be liquid and played to push up its price 🙂

  9. I know many foreign couples, and this is the strategy they employ. The wife will take up Singapore citizenship to enjoy maximum benefits, while the husband only take up PR status. They not only are entitled to housing grants but will also be absorbed into the “citizen” category, thus falsely inflating the ratios.

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