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Why Singapore and Shenzhen Housing model is totally different to provide subsidised housing for the masses
SG housing is not just a matter of building and providing housing at affordable levels for the different levels of income.
Sharing a post from South China Morning Post (SCMP) about how China’s city of Shenzhen is looking to drop their Hong Kong model of public housing in favour of Singapore’s, Ho Ching said that housing in Singapore is not just about building and providing housing at affordable levels. It is also about having a proper savings scheme and separating government annual revenue from land sales proceeds.
The SCMP article highlighted that Shenzen, one of the most expensive cities in China, is looking to bring about a “second housing reform” by providing more affordable public housing. The measure is part of the government’s promise to offer 1.7 million homes by 2035, 60% of it being subsidised.
SCMP noted that as of 2018, only 20% of homes in Shenzen were government-funded, compared to 45% in Hong Kong and over 80% in Singapore. They want to change this by offering subsidised homes at half the prevailing market rate, according to a consulting paper issued by the Housing and Construction Bureau of Shenzhen.
Shenzen’s plan is to split the subsidised homes into three parts: public rental flats leased at 30% the market rent, affordable homes at 50% the market rate, and other homes at 60% the market rate.
By adopting the Singapore model, SCMP says Shenzen is echoing President Xi Jinping’s pledge to build homes “for living in, not for speculation.”
Hong Kong Chief Executive Carrie Lam Cheng Yuet-ngor has also praised Singapore before for its housing policies, saying that it inspired her in the formation of her own policies relating to Hong Kong’s housing crisis.
SCMP noted that this new model could work in Shenzen as the city’s economic outputs are higher than Hong Kong’s.
Going back to Mdm Ho’s Facebook post, the Temasek CEO noted that in Singapore, CPF contribution rates have been gradually built up to the 37% today which is “just nice to cover mortgage payments” so that buyers won’t have to use their take-home pay. But she cautioned this is just one of many factors to consider.
Additionally, Mdm Ho said “a complete housing solution is also about separating govt annual revenues from land sales proceeds.”
On this note, she explained how money from land sales in Singapore is not allowed to be used directly for government annual spending as land is considered part of Singapore’s collective heritage.
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