http://www.straitstimes.com/PrimeNew...ry_676602.html

Jun 6, 2011

Property czar with bold moves, soft touch

Khaw is not afraid of making radical changes, listening to the ground

By Jessica Cheam, Housing Correspondent


THE raft of changes to Singapore's housing policy makes it hard to believe it's just been about three weeks since the new Cabinet was announced and Singapore had a new property czar.

Yet in the time since former health minister Khaw Boon Wan took over at the Ministry of National Development, he has set up a new 'Housing Matters' blog.

His posts have been short, casual and chatty - but they pack a punch. In fact, the first three all led to Page 1 stories.

He started out modestly by identifying three segments of the population that needed to be helped in housing: young couples, divorcees with children and low-income families.

But his next post marked a radical departure from a past practice that the Housing Board (HDB) had steadfastly held on to for almost a decade. Instead of building flats to order, it would now build them ahead of order.

And most recently, Mr Khaw said he would direct HDB to offer new flats in mature estates wherever possible - marking another sharp shift in policy.

Unsurprisingly, Mr Khaw's moves have generated a great deal of buzz. Industry analysts and netizens alike now watch his blog like a hawk to discover the Government's next move in addressing the dissatisfaction that has built up on housing issues among the electorate. But people are also wondering: Can Minister Khaw really deliver?

How far will he go to reverse existing policies to placate the public? And perhaps more importantly, what kind of impact will new policies have on Singapore's property market?

Well, one needs only to look back at Mr Khaw's past record to get some inkling of what could happen in the next five years.

When he became acting health minister in 2003, he was also entering a hot seat, albeit of a different kind. Singapore was then facing the threat of severe acute respiratory syndrome (Sars) and a combination of strict rules and public vigilance helped the nation get through the crisis.

When he became full-fledged minister, Mr Khaw caused a stir in the health-care sector when he demanded that hospitals publicise their prices, so that health-care fees can become more competitive.

He turned out to be 'better than his word', a phrase used at the time to describe him. A month after his call, information on the cost of 28 common procedures at the hospitals was up on the Health Ministry website.

In his eight years at Health, Mr Khaw went on to revamp MediShield, the national medical insurance scheme, to bring premiums down. He reviewed health-care costs to make them more equitable, and he even took on controversial issues with a moral slant, such as broadening the Human Organ Transplant Act (Hota).

For this reason, industry observers are betting that the straight-talking civil servant who entered politics in 2001, will 'deliver what he says'.

One property analyst said Mr Khaw seems intent on adopting a 'back to basics', needs-based approach to housing, seeking to ensure urgent needs are met first.

This contrasts with the former National Development minister Mah Bow Tan's overall 'asset enhancement' approach, with the HDB flat functioning as more than just a roof over a home buyer's head. It was also an investment, a hedge against inflation and a possible retirement nest egg through HDB's various schemes.

But are the two approaches exclusive? For now, some think that both elements could be married. Mr Khaw could do well to maintain the role of the HDB flat as Singapore's social safety net, even while he focuses more attention on alleviating the unhappiness of certain segments of the population.

The question that worries analysts more is what else will Mr Khaw change, since he is clearly in a mood to rewrite policy?

He has so far kept silent on the contentious issue of pricing HDB flats, which emerged as a top election issue.

HDB, under Mr Mah, maintained that market-based pricing made more sense, although opposition parties had argued for a more transparent cost-based method.

Will Mr Khaw move to bring down the prices of new flats? And what effect would that have on resale flat prices, which are at historic highs?

Industry experts say the market could see another round of measures to cool the market, particularly if the private property market sees rising sales volumes and home prices.

Some commentators are fearful that Mr Khaw's moves - which some have already described as 'populist' - could spell, in the worst-case scenario, a supply glut of HDB homes in the future and a moribund property market for years to come.

Building ahead of demand, for example, seems the right thing to do now. But it also seemed like the right to do in the 1990s - until, that is, the Asian financial crisis struck and buyers disappeared.

This resulted in a massive stock of unsold flats that depressed HDB flat prices for many years until 2006, when the market picked up.

What property watchers can agree on is that Mr Khaw's biggest strength - and what would be key to crafting the best housing policies - is the sense he is giving that in making policy he will conduct a two-way conversation.

Mr Khaw was among the first to begin a blog in 2009, and to use social media, among other avenues, to widely consult stakeholders in any policy change.

In announcing his blog in 2009, the Ministry of Health said Mr Khaw had felt everything 'should be transparent', and that 'if our policy is flawed and can be enhanced, we welcome comments and will adopt practical suggestions'.

Singapore's property market - with an open economy making it vulnerable to headwinds that change constantly - requires policymakers to be nimble.

Policy U-turns should not be seen as a sign of weakness, and policymaking should be an evolutionary process where the people also feel they have a say in the decision-making process.

From Mr Khaw's moves so far, he seems to understand all this.

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