Speech by 2M Indranee Rajah at ERA APAC Business Conference
Mar 20, 2024
Mr Marcus Chu, Chief Executive Officer, ERA
Ms Doris Ong, Deputy Chief Executive Officer, ERA
Ladies and Gentlemen
Introduction
1. Good morning. I am delighted to join all of you for your annual business conference today.
2. I understand that it’s not just the sales force from Singapore but we have friends from overseas as well, so please give them a big welcome.
3. I would like to begin by congratulating all award recipients. The awards are a recognition of your hard work and commitment towards service excellence and professionalism. Well done, and give yourselves a big hand.
4. I would also like to thank ERA for its valuable contribution as a key partner in our real estate sector, helping Singapore achieve a prosperous yet sustainable property market, and at the same time ensuring risks are well mitigated.
a. In fact, as we can see from today, ERA has also gone beyond our local market and established a prominent international presence. This achievement is made possible not just from ERA’s strong leadership team and foresight, but also from every one of you. Your commitment to professionalism and upholding high service standards have earned you customers’ trusts.
b. ERA’s motto, indeed, is “Trusted by Generations”, and I know many of the exemplary RESs and industry veterans here will know that this is not to be taken lightly.
c. Today’s business conference is a culmination of ERA’s efforts in the past year, where representatives across the ERA family come together to celebrate ERA’s success.
5. Over the past 2 years, we embarked on the Forward Singapore exercise to refresh our social compact and chart our way forward as a united nation. More than 200,000 Singaporeans participated in this exercise, giving us an invaluable peek into their aspirations, dreams and goals.
a. Singaporeans have told us that homeownership remains a key aspiration, and we are committed in supporting them, to help them turn their aspirations into reality. We will continue to provide housing options that cater to Singaporeans with different budgets and needs.
b. And who are the people who are going to help them achieve their housing aspirations? Salespersons like yourselves, because you help them to connect with the property market.
6. With that backdrop in mind, I will cover the following broad areas in my speech:
a. First, some updates on property and the measures announced in Budget 2024
b. Second, the role of real estate agencies and professionals in combatting money laundering and terrorism financing;
c. And thirdly, other measures in Budget 2024 that provide support for households and individuals.
d. Now for those of you who are Singaporeans or locals, the terms I’m using will be familiar to you and you know much of the background. For our foreign guests here today, if you’re not familiar with some of the acronyms, I’d like to ask some of our Singaporean ERA salespersons to help explain to our friends from abroad, just so they get some understanding of what the Singapore system is like and some of the things that I will be talking about.
Market Updates and Trends
7. Housing is very close to the hearts of Singaporeans. Our home ownership rate is around 90%, one of the highest in the world. Of this, 80% is public housing, a testament to the quality and affordable homes HDB built over the decades.
8. So let me say a few things about what has been happening here. As you know, COVID-19 had a significant impact on our construction sector and our housing market.
a. There were major supply disruptions. We also saw strong demand, in part as more Singaporeans move out to live on their own earlier.
b. This resulted in an imbalance in demand and supply, inadvertently pushing up housing prices and rents for both the public and private housing markets. Application rates for new HDB flats rose to a peak.
c. I know that the higher prices in the resale market will be good for the real estate salespersons, but I think that for those entering the market, it was also a bit challenging for them. So this is something we have to keep an eye on.
9. To address this imbalance, we committed in 2021 to launching 100,000 new flats by 2025.
a. As of February this year, we have launched more than 67,000 flats – two-thirds of our commitment. We will launch another 19,600 flats this year and are well on track to meeting our 2025 target.
b. Last year, HDB also completed 21,400 flats across 23 projects. This marks the highest number of flats and projects completed annually in the last 6 years. HDB also issued over 22,000 sets of keys to flat buyers, about one-third more than in 2022.
10. Besides building more flats, we have also introduced more flats with Shorter Waiting Times. These flats generally have waiting times of less than 3 years. This helps young couples to settle down faster and start building their own families. So if any of you have children looking for a BTO, please share the good news with them.
a. HDB will launch 2,800 of such flats this year, 4 times the number of such flats offered last year. With that, HDB would have achieved its target of launching around 2,000 to 3,000 such flats per year, one year ahead of schedule, instead of 2025.
11. Couples who prefer not to wait for the completion of BTO flats can opt for resale flats with generous grants.
a. Together with the EHG, as well as the Proximity Housing Grant, eligible First-Timer families can receive up to $190,000 in grants when they purchase a resale flat. This is important for you to know because some of your clients are buying resale flats, so they need to know that there are grants available, so please share this information with them. These grants provide significant financial help for eligible first-timer families and younger couples who are in the early stages of their careers, giving them a boost towards their homeownership aspirations.
12. To help married couples who have booked their BTO flat but need a temporary HDB room or flat to stay while waiting for their BTO flats to be completed, we have the Parenthood Provisional Housing Scheme, or PPHS. However, due to the COVID crunch, the demand currently still exceeds the supply. As such we introduced the Parenthood Provisional Housing Scheme (Open Market) Voucher.
a. The voucher will help eligible couples ease the financial burden renting from the open market, while providing them a private space to kickstart their family plans.
b. Broadly, these are Singaporean families with a household income of $7,000 or less. This allows us to target the PPHS Voucher at those with less income at their disposal, to defray their costs of renting.
c. Each eligible family will receive $300 per month, regardless of whether they rent an HDB flat or bedroom. Payment will be made on a reimbursement basis every few months.
d. The $300 quantum was carefully calibrated to provide some relief to eligible families, whilst mitigating the potential inflationary impact on the rental market for others. At $300 per month, eligible families will receive up to $3,600 if they qualify for the full year of support.
e. The PPHS Voucher will be in place for a year starting from July 2024, and we will monitor the impact of the voucher on the rental market closely.
f. This is relevant to you why? Some of these families will also come to you if they are looking to rent a flat or room. So do share this information with them; the eligibility requirements are on the HDB website, so let your clients who are looking for these know that this PPHS (Open Market) voucher is available.
13. On the private property market, we have also ramped up private housing supply.
a. In 2023 alone, we launched 9,250 units under the Government Land Sales Programme, or GLS. This was the highest annual supply in the last ten years.
b. And for the first half of this year, land supply for 5,450 private homes was made available on the Confirmed List. This is the highest supply on the Confirmed List in a single GLS Programme since the second half of 2013.
c. We are watching the market carefully, and will inject more supply as necessary to meet demand.
14. In total, across the public and private housing markets, a significant number of new homes have been completed.
a. Last year, around 43,000 public and private homes were completed, with keys handed over to their owners. This is the largest number of homes completed in a single year since 2018.
15. In parallel, we have implemented three rounds of cooling measures since December 2021 to temper housing demand, and to encourage greater financial prudence among homebuyers.
16. We are seeing the effect of these measures. Our property market is stabilising.
a. HDB resale prices rose 4.9% last year, less than half of the 10.4% increase in 2022.
b. Price growth in the private residential market has also moderated, from 8.6% in 2022 to 6.8% in 2023.
c. Overall, BTO application rates have also gone down, from a high of 5.8 applications per flat in 2020, to 2.9 applications per flat last year. Basically, this means we are catching up with our schedule.
d. Transaction volume in the private property market in 2023 has also declined by 13% compared to 2022, and is at its lowest since 2016.
17. Rents are also stabilising. As more units are completed and residents move out of rental properties into their new homes, rental demand has eased.
a. The quarterly increase in public housing rents has moderated to 0.4% in the fourth quarter of 2023, from 1.9% in the third quarter.
b. Private housing rents also fell by 2.1% quarter-over-quarter in the fourth quarter of 2023. This was the first quarterly decline in over three years.
18. We expect the housing market to continue to stabilise this year.
a. We will continue to launch a steady supply of new homes, so that there is a home for every budget and need. Some of these homes will be in exciting new areas, such as Bayshore, Mount Pleasant and Pearl’s Hill. I encourage you to visit URA’s draft Masterplan to find out more on these new housing areas.
19. Besides young families, we also recognise that there are senior homeowners who are keen to right size, as part of their retirement planning. Some may want to use the sales proceeds to supplement their retirement income. Others may prefer a smaller place, as it is easier to clean and maintain due to their age.
a. Hence, we adjusted the ABSD framework, to provide an ABSD refund for senior single Singaporeans aged 55 and above, to facilitate them right sizing to a lower-value private property from their existing properties, enabling them to unlock their property value for their retirement needs. This is in addition to the current concession provided for married Singaporean couples on their replacement private property. So it would be helpful if you become familiar with these ABSD changes so you can share the information with your clients and potential clients who are looking to right size.
20. For all other homeowners, we raised the annual value bands for owner-occupied properties. Homeowners will pay the same or lower property taxes for the same annual value and before any rebates.
a. For an owner-occupied 3-room HDB flat with AV of $12,000, the homeowner will pay $0 under the revised AV bands, as compared to $160 (without rebate) under the current AV bands.
b. For an owner-occupied semi-detached with AV of $50,000, the homeowner will pay $1,720 under the revised AV bands, as compared to $2,480 (without rebate) under the current AV bands.
c. IRAS will extend the interest-free GIRO instalment plan for Property Tax bills from 12 months to 24 months, for residential properties owner-occupied by eligible retirees aged 65 and above. Please do help us to share this information with this group of property owners, because it is helpful information for them and you can also help them understand the annual value of their properties.
The real estate sector and Anti-Money Laundering (AML)
21. Next, I want to touch on the real estate sector and Anti-Money Laundering (AML).
22. I also want to talk about the role that real estate agencies and agents can play in combatting it.
a. Serious financial crimes such as money laundering are a scourge on Singapore’s reputation and our economy.
b. With the strong international reputation that Singapore has carefully built up over the years, we are renowned for having a clean system that works, and professionals who are competent, honest and trustworthy.
c. Criminal activities such as money laundering erode trust and damage Singapore’s reputation and attractiveness as an international trading and financial hub.
d. There will be far reaching consequences if we fail to tackle the issue and uphold Singapore’s clean reputation globally. It will then be extremely difficult to maintain our competitive advantage in an increasingly challenging and multipolar global environment.
e. Hence, all of us need to play our part to uphold the reputation we have built. The effectiveness of Singapore’s AML measures relies on each stakeholder playing their part and working closely together to maintain a strong collective defence against the abuse of our system for money laundering.
f. As leaders and professionals in the real estate industry, you are the key first line of defence against the twin scourges of money-laundering and terrorism financing. You are the gatekeepers. You play an important role in countering these threats and upholding Singapore’s reputation as a global financial centre.
g. Currently, we require all property agencies and agents to perform Customer Due Diligence checks on your clients. Anyone who has reasonable grounds to suspect that any property may be connected to criminal conduct is required to file a Suspicious Transaction Report.
h. It is crucial that property agencies put in place processes and systems to ensure that such due diligence is carried out. CEA will work with the industry to identify gaps and develop the necessary systems or capability to ensure compliance with our anti-money laundering and terrorism financing regulations.
23. Recently I had a dialogue session with REAs and professionals, and all of you have given me feedback because I am chairing the Inter-Ministerial Committee to deal with AML measures and see how we can strengthen our system. You have given me feedback on some of the gaps where we can build capability, and we also know that you are looking to see how to better file STRs, and also how to get access to information that would be relevant. We are looking into this, but what I wanted to just say is we should work together to prevent money-launderers from, first, abusing our system; and second, making use of real estate agencies and real estate salespersons to further their money-laundering activities. So let us work together to uphold Singapore’s reputation.
24. Besides our AML efforts, we have also taken steps to counter scams. In recent years, we have seen a proliferation of scams involving property agents and listings that are becoming increasingly sophisticated.
a. For example, scammers impersonating landlords to cheat unsuspecting tenants of their deposits. Or scammers impersonating CEA-registered property agents and convincing victims of their credentials by sending pictures of property agent passes and business cards. These scammers would then pressurise victims into making deposits to secure or view the property.
b. To be even more convincing, in some cases, victims were asked to meet up with the “personal assistants” of scammers who would help facilitate physical viewings of the property.
c. Between July 2023 and January 2024, at least 389 victims have fallen prey to scams involving such impersonations, with total losses amounting to at least $2.4 million. I am sure you have seen many news reports of victims who have suffered life-changing losses, or even know of family or friends who have fallen victim.
d. The best defence against scams is a vigilant and discerning public. Through your regular interactions with property consumers, you are an important touch point to remind property consumers to be aware of such scams and share ways to avoid falling for them. On this, I would like to thank ERA for its effort in sharing with your clients and the public on how they can avoid scams, through educational messages and publicising CEA’s anti-rental scam webpage on ERA’s social media channels.
e. So thank you ERA for this.
25. Now let me say a little bit about industry transformation. We are living in an increasingly interconnected world, with technology advancing faster than we can imagine. In this highly competitive sector, what makes you stand out is the unique value you can provide to your clients.
a. Hence, I am heartened to know that that ERA has committed to achieve the Real Estate Industry Transformation Map target of having 100 per cent of RESs to be digitally trained in at least one digital marketing tool or skill.
b. ERA has also contributed to efforts to boost the industry’s digitalisation journey. As a member of the Alliance for Action (AfA) on Accurate Property Listings, ERA together with other industry stakeholders, contributed time and money towards developing a prototype to address the longstanding pain-point of dummy, unauthorised, inaccurate and duplicate property listings.
c. The AfA members have accepted the completed prototype, with a view for CEA to develop it into a full-scale platform to be used by property agencies and agents in the future. CEA will continue to partner with stakeholders such as ERA to work towards a more seamless and efficient property search experience for consumers and property agents.
d. So thank you, ERA, for your commitment to investing in and leveraging technology to enhance service delivery. Keep up the good work!
26. Let me just conclude by saying a little something about Budget 2024 which was delivered in parliament a few weeks ago.
27. Budget 2024 is the first instalment of our Forward SG plans to refresh our social compact and take definitive steps to build a Singapore that is vibrant and inclusive, fair and thriving, resilient and united.
28. At the same time we recognise that in the current economic environment, Singaporeans also have concerns about cost of living and job security. On this, I want to highlight the following measures in Budget 2024.
29. Firstly, we will further enhance the Assurance Package by $1.9 billion, bringing it to over $10 billion in total.
a. All Singaporean households will receive an additional $600 in CDC Vouchers - $300 in end-Jun 2024, $300 in Jan 2025.
b. A Cost-of-Living Special Payment of between $200 and $400 in cash will be extended to adult Singaporeans with Assessable Income of up to $100,000, and who do not own more than one property.
c. Additional one-off U-Save rebates to help eligible HDB households cope with increases in their utility bills.
d. Additional one-off Service and Conservancy Charges Rebate for eligible HDB flats.
e. The Package is designed such that lower-income families, and larger households, particularly those with seniors and children, get more support.
30. Second, and this may be of interest to many of you, we are investing heavily in mid-career reskilling for our citizens through the SkillsFuture Level Up Programme. Under this, Singaporeans aged 40 and above are eligible for the following:
a. $4,000 SkillsFuture Credit (Mid-career) top-up. This is for selected and curated courses but it is really to help you gain new skills so you can access new job opportunities or different areas of interest.
b. There is also a Mid-Career Enhanced Subsidy for another publicly funded full-time diploma. So irrespective of whatever qualification you have now, whether its NITEC, higher NITEC, diploma or university degree, you have a chance to go for another publicly-funded diploma. This is not something you have to do immediately, you can do it later, but the idea is that at 40, life should not be slowing down. At 40, we are opening new doors for you to chart new directions and learn new things. So new chapters are opening at age 40.
c. And in addition, there is up to $3,000 monthly SkillsFuture Mid-Career Training Allowance for up to 24 months for selected full time courses. This is for those who have to stop working or give up their jobs in order to take up full time training.
31. These are just some of the highlights for budget 2024. All these changes are part of a wider set of assistance measures, which includes enhancements to CPF framework, higher CDC vouchers, income tax rebates, reduced childcare fees, mid-career reskilling subsidises as well as increased healthcare subsidies.
32. You can find out more about these support measures from the Budget booklet and check what you are eligible to receive through the Support for You Calculator. The QR code is on screen, and you will find it in various places as well.
33. Please do share this with your families, friends and clients, and encourage them to check the calculator to find out more about what they can receive.
Our Reserves
34. These measures were all made possible only because we have strong Reserves. Our Reserves are strategically planned and managed over decades to provide us with this financial ability.
a. The investment returns from our reserves are channelled back to citizens via the Net Investment Returns Contribution (NIRC). This is part of our annual Budget, and contributes to spending in areas such as education, public housing, healthcare, and other social goods. This benefits Singaporeans via good economic growth and jobs, as well as safe and liveable homes.
b. This NIRC is one of the largest contributors to the annual Budget. Today, the projected income from our reserves already provides more than $23 billion a year, more than the budget of any one ministry.
35. You can find out more about the reserves via the CNA documentary “Singapore Reserves Revealed” or through some of our collaborations, such as with The Woke Salaryman.
Conclusion
36. I hope you have taken away something useful today. Please feel free to share this information with your clients and your friends and encourage them to find out more at our official websites.
37. I look forward to ERA’s continued support in our efforts. We, in turn, will be very happy to continue supporting the real estate sector and to help the sector transform, professionalise and to do even better. Thank you all very much and please enjoy the rest of today’s conference.