Speech by Minister Desmond Lee at ERA Asia Pacific Business Conference 2023
Mar 21, 2023
Mr Marcus Chu, Chief Executive Officer, ERA
Ladies and Gentlemen
1. Good morning. I am delighted to join all of you for your annual business conference today.
2. I would like to begin by congratulating all our award recipients. The awards are a recognition of your hard work and commitment towards service excellence, client centricity and professionalism. Well done!
3. Over the next few minutes, I will cover three areas. First, I will talk a bit about housing market in Singapore, then I will speak about ERA and broader real estate as a whole. And lastly, I will be covering ERA, and the work you’ve been doing, ESG, as part as your active citizenship, as part as your commitment to environmental sustainability and social equality.
4. Recently, concerns over public housing accessibility and affordability have grown to be top-of-mind for many Singaporeans. All of you are in the industry and all of you have been giving us useful feedback about your clients’ concerns, about whether they can afford a home, whether they can get one, especially in today’s climate. Much of this was caused by pandemic disruptions. For instance, more than 100 BTO projects were delayed, affecting 83,000 home buyers in Singapore. We have been working hard over the past 2 years to catch up on lost time, and I would like to opportunity to thank you and also thank Singaporeans who have been affected, for their forbearance, for their patience and for their understanding as we deal with the impact that COVID had brought on our construction sector, on the real estate sector.
5. As of January this year, my colleagues at HDB have successfully completed around 55% of all delayed BTO projects, or a total of 52 projects over the last 2 years. We will continue to push on to deliver more homes to home buyers as soon as possible. We are also making progress in meeting the strong demand for public housing, and are starting to see early signs that the market may be stabilising. From the most recent two launches in November last year and February this year, my colleagues at HDB saw applications falling for the consecutive launches, to the lowest in February 2023, particularly those from first-timer applicants, since the onset of the pandemic in February 2020. So, we start to see some stabilisation, some rationalisation of demand, some early signs of progress.
6. These early numbers are encouraging, but our work is not done, and we need to keep a close eye on the property market, especially in the current climate that we’re operating in.
7. At the same time, we have been organising Housing Conversations under Forward Singapore, to refresh our social compact around housing, and identify what more we need to do to improve our public housing system, which is unique to Singapore. So far, we’ve heard from more than 14,000 Singaporeans who have shared their ideas and their concerns with us, and I’m grateful for their active participation.
Government’s Commitment of Public Housing Affordability and Accessibility
8. As a result, we’ve been able to make some moves during the recent Budget season in Parliament, principally to provide better support for Singaporeans buying their first home.
a. For example, we increased the CPF Housing grant to help first-timer families buy resale flats. With this increase, they can receive a maximum of up to $190,000 in grants to offset the price of their resale flat purchase.
b. And from the Aug 2023 BTO exercise, families with children who are 18 years old and below, as well as married couples 40 years and below, who are buying their very first home, will get extra help. They will get 3 ballot chances, up from the previous 2. In addition, they will be eligible for a new or enhanced scheme, which we call the Family and Parenthood Priority Scheme (FPPS) for all HDB launches – mature estate, non-mature estate, prime location housing – to help people to buy their very first home.
9. In parallel, we have been building aggressively and on a very large scale to ramp up flat supply. It is not easy. A great deal of forward planning and preparation work is required before we can launch a site.
a. With limited greenfield sites left, we have to identify other plots of land, some of which may require relocation of existing uses.
b. Time is also required for land preparation to ensure that supporting infrastructure there, like roads and sewers, cables are ready. We need to conduct extensive soil investigations and soil remediation works, where needed. These have an impact on the timeline.
10. But we have been and will continue to work towards launching more flats, with shorter waiting times. By this, I mean shorter witing times of three years or less. So around two years plus, under the shorter waiting time flats, they will be able to collect their flats.
a. This has been disrupted by COVID because we started it in 2018, but by 2025, we plan to return to pre-COVID levels and launch around 2,000 to 3,000 of such shorter waiting time flats each year.
b. But that is not all. We will also recalibrate our building programme over time, to increase the proportion of Shorter Waiting Time (SWT) flats in our overall new flat supply.
11. Across the public market as well as the private market, we are expecting close to 100,000 home completions between 2023 and 2025, with almost 40%, or 40,000 home completions, this year alone. This will be the highest number of home completions in the last five years, including the pre-COVID years of 2018 and 2019.
a. This increased rate of home completions in Singapore should help to alleviate some of the pressures that we see in the rental market. Why? Because households who have been waiting for these keys, both private and public market will leave the rental market for their new homes, and there will also be some additional rental supply from the newly completed homes.
b. Looking forward, the supply of BTO flats will be significantly increased. We upped the ante in 2021, in the midst of COVID. As I’ve said before, we will launch up to 100,000 new flats in total from 2021 to 2025. We launched more than 23,000 flats last year and will launch around the same number this year. By 2025, HDB will oversee more than 150 concurrent BTO projects all across our island.
12. In the longer-term, we will need to rejuvenate our housing estates. We will need to reimagine public housing all over again to meet the needs for future generations, better quality, better amenities, more community, to allow us to utilise our limited land in a sustainable and equitable manner.
13. We will continue to promote a steady and sustainable property market for the benefit of both current and future generations. We watch the trends closely, and will review our measures to moderate demand, so that we can keep the housing market stable and affordable for Singaporeans.
14. We invite all of you, as trusted advisors and professionals, to continue to support us in this important work – guiding buyers to be better informed on their purchases and practise financial prudence by not overextending themselves financially, especially during this period of increasing economic and geopolitical uncertainty. We applaud everyone in this profession who has taken up this mantle and carried out these duties responsibly.
Spirit of Constant Innovation to Improve Services and Sector Transformation
15. Let me now speak on my second topic, which is on the spirit of constant innovation by ERA to transform the sector and improve services.
16. With the rapidly changing nature of the real estate industry as Mr Marcus Chu presented it some of it earlier, I am encouraged by ERA’s spirit of constant innovation and drive to keep improving. Technology is both a disrupter and an enabler. It is both; it depends on the posture you take. If you are passive, if you’re reactive then it will disrupt. If you seize it by the horns and ride it, you will use it as an enabler. And this is important even though the real estate profession is a high-touch, high-feel and high-trust sector, because technology empowers you to serve your client to the best of your ability, to maximise technology to meet their needs.
17. One way you have done this is through the launch of the Realty Watch app in 2021. This allowed consumers to track property transactions in their neighbourhood, including real-time information on new launches. You then launched SALES+ app in 2022, which supported agents in their work through built-in work management functions, and features to facilitate market research. I understand that ERA will be enhancing this app further this month, by integrating it with the AI software ChatGPT, which will provide an even more intuitive user experience.
18. Beyond improving service delivery through tech adoption, I am also appreciative for ERA’s partnership with CEA on the Real Estate Industry Transformation Roadmap (RE ITM) 2025, the latest, updated version of our transformation map.
19. As part of this work, you serve as a member of the Alliance for Action (AfA) on Accurate Property Listings, which seeks to address the longstanding problem of dummy, inaccurate, unauthorised and duplicate listings, creating a productive property search experience for both agents and consumers.
20. Not only that, you are also actively involved in Project ADEPT, a joint initiative between my colleagues at CEA and the industry to improve the Continuing Professional Development ecosystem, in order to raise the professionalism and skills of property agents so that they can provide better service to their customers.
Going beyond Real Estate
21. Let me now move on to my last topic, which is about the heart, and it is about the future, going beyond real estate, and what ERA has done to be an active citizen.
22. Beyond real estate, ERA has also been giving back to the community, and supporting important causes relating to sustainability.
a. In November 2021, you became Singapore's first real estate agency to launch an ESG initiative, and you have raised more than $470,000 since.
b. In 2022, you contributed $250,000 towards the Hong Kah North Environmental Sustainability Fund, to fund green projects in Tengah New Town. You also donated $220,000 to the Northwest CDC to support important sustainability programs, to advocate green living and wellness.
c. This year, you collaborated with Zero Waste SG and launched the Bring Your Own Bag (BYOB) campaign with participating supermarkets and held a collection drive for reusable bags.
23. I applaud your efforts in championing these important green sustainability causes. But going beyond sustainability, is the importance of tackling social inequality in a city state like ours. It is not just the Government; the entire community, including Corporates, need to come into the picture.
24. Earlier this year, my colleagues at the Ministry of Social and Family Development (MSF) launched the “Year of Celebrating Social Service Partners”, where we recognise the contributions of our partners from within and beyond the social service sector. Silent heroes that look after the vulnerable, empower lower-income Singaporeans to dream of a better future. As an important partner, ERA has been working closely with MSF to meet the needs of a number of low-income rental households through the Gift-a-Family (GAF) initiative, an integral part of ComLink. Under this initiative, ComLink families with children who are living in rental flats, will be sponsored to attend training and enrichment courses to help them grow and develop, show them that another Singaporeans cares and support them and help them to achieve their dreams.
25. For our foreign friends who are coming to Singapore and hearing ComLink for the first time, this is our attempt to tackle deep-seated inequality, and we start by supporting 14,000 low-income families who are living in our rental flats. Rental flats are flats provided by my department – Housing Development Board – provided as a social safety net, rented at highly subsidised rates to families and individuals who would otherwise have no other housing options. As of last year, all rental flats provided to families, will come as a combined product known as ComLink rental flats. That means, we no longer provide just housing, they come with social support, integrated with housing support. And through ComLink, we aim to support each and every one of these families, in a proactive data driven approach by coordinating Government, community, corporates around customised goals and plans for each and every one of these 14,000 families. And through Gift-A-Family, you are among the pioneers to support individual aspirations, partnering the Government, partnering the community, to help fulfil the dreams and aspirations to incentivise, to empower and to uplift these families, one by one. I thank you for having faith in us, and working on this important project.
26. As one of the market leaders spearheading the real estate industry, ERA is an important contributor and has been a role model for many others to follow. Your commitment to professionalism, innovation and customer satisfaction has enabled you to establish yourselves as a trusted and reliable partner in the industry. We look forward to your continued partnership as we push the boundaries for the sector.
27. Once again, congratulations to ERA and all award recipients on your achievements! Thank you.