Ensuring Housing Needs of Singles and Singaporeans are Met

Mdm Deputy Speaker, I would like to first declare my interest as an equity research analyst in a financial institution, covering the real estate industry.

Mdm Deputy Speaker, the adequacy of HDB housing for singles has arisen in public and Parliamentary discussions ever so often, showing this remains an important and evolving issue in Singapore. Over the years, public housing options for singles have gradually expanded ever since the introduction of the Single Singapore Citizen scheme in 1991. However, since the scheme’s inception almost 30 years ago, one key policy requirement has remained unchanged – that singles must be at least 35 years old to be eligible to purchase public housing.

At the same time, recent headlines reporting record high HDB resale prices, suggest that something is amiss in public housing provision, even for couples.

As set out in the Workers’ Party manifesto, and as reiterated by Leader of the Opposition Mr Pritam Singh in the MND Committee of Supply debate earlier this year, we believe this threshold can and should be lowered and we propose to lower the BTO eligibility age for singles to 28 years, which is when most Singaporeans would have been in the workforce for a few years and have begun to lead more independent lives.

This proposal would be a critical change, yet a continuation of the Government’s efforts over the years to expand HDB options for singles, while still allowing HDB to give priority to providing for families. In fact, we believe lowering the threshold for owning HDB flats to 28 years would go a long way towards HDB’s stated aims for Singapore’s public housing to be “inclusive” and to “reflect the diversity of our society”.

The objective of today’s Adjournment Motion is two-fold: to ensure that the housing needs of not just singles, but those of all Singaporeans are met. Before I move on to state my case on why singles should be allowed to apply for a BTO flat at an earlier age, I would like to touch on the most pressing issue in my view and, that is, housing supply.

I would like to implore the Government to take urgent and decisive steps to increase the availability of public housing and address the current demand-supply imbalance, to ensure that the housing demand of all Singaporeans, not just singles, can be met.

In response to my Adjournment Motion last year on "Supporting Diverse Aspirations Through Rental Housing", Senior Minister of State Sim Ann shared that home ownership has been and will continue to be our key housing strategy for Singapore. Since this is the Government’s position, I hope that the Government can take steps to deliver on this strategy.

I acknowledge that compared to last year, housing supply is set to increase by about 35% over the next two years, at about 23,000 BTO flats per year in 2022 and 2023. Moreover, the HDB stated that it is prepared to launch up to 100,000 flats in total from 2021 to 2025, if needed, subject to prevailing demand.

These numbers, however, need to be put in context.

Even if HDB decides to launch the whole 100,000 flats in total from 2021 to 2025, this implies that BTO supply falls 20% to about 18,400 flats in 2024 and 2025. Moreover, while the average of 20,000 BTO flats between 2021 and 2025 is an increase, compared to an average of 17,000 flats between 2016 and 2020, this is still 13% below the average of 23,000 flats in 2011 to 2015, during the time when Mr Khaw Boon Wan was the Minister for National Development and sought to address the backlog in the supply of HDB flats.

We have already seen BTO application rates climbing steadily over the past decade to new highs. For 3-room and larger flats, this increased from 2.8 times in 2012 to 6.1 times in 2021. Similarly, 2-room Flexi flats, whose buyers are more likely to be the elderly or singles, also saw application rates rise, albeit at a more moderate pace from 2.8 times in 2012 to 3.6 times in 2021.

What is of greater concern is that despite the supposed ramp-up in supply this year, application rates have reached new record highs, suggesting that the level of demand-supply imbalance remains a critical concern.

Following the February, May and August BTO exercises this year, application rates for 2-room Flexi flats and 3-room and larger flats have increased even further and reached new record highs, at 5.1 times and 7.2 times respectively this year. This is worrying, especially when we look at the recent August BTO exercise, where the overall application rates are seeing no signs of letting up, with that for 2-room Flexi flats at 5.5 times and that for 3-room and larger flats at 8.3 times.

While I acknowledge that our proposal on singles’ BTO eligibility could increase marginal demand for 2-room Flexi flats, it does not detract from the fact that there appears to be serious imbalances in the housing market, the spillover effects of which is evident for all to see in the secondary market, where HDB resale prices have increased by 25% in the last three years, with prices today 12% higher, compared to just one year ago, and prices showing no signs of slowing down, increasing by 2.8% in just the last three months alone.

So, I hope the Government will seriously prioritise its resources to support Singaporeans in achieving their home ownership aspirations.

Moving on to reducing the BTO eligibility age to 28 for singles. By the age of 28, the average Singaporean male and female would have finished their tertiary studies and had some amount of time in the workforce. In that sense, they would have some chance to lead independent lives and steady their financial footing.

As shared by Leader of the Opposition Pritam Singh earlier this year, in the National Youth Council’s 2021 publication on the state of youths in Singapore, when it comes to aspirations or goals in life, the top choice selected by our youths was to maintain strong family relationships while the second choice was "to have a place of my own".

Our proposal looks at reducing the BTO eligibility age to 28, and not that for the resale market. While opening the resale HDB market to singles below 35 is a possibility worth exploring, we think it is important to first enable singles to access the BTO market, to ensure that incremental demand is met through new supply and not through existing supply and via the currently buoyant HDB resale market.

Moreover, with a waiting time of up to 5.7 years as of the August 2022 BTO launch, assuming one is successful in balloting for a flat on the first attempt at age 28, he or she would already be close to 35 years old by the time the flat is in a move-in condition. No different from purchasing a resale HDB flat anyway.

Affordability is also a key consideration when it comes to meeting singles’ housing needs. While first-timers can access various financial support grants from the age of 21 to aid in their purchase of a flat, this is, at this point, not available to singles. That said, I recognise that single buyers, too, have access to housing grants and can buy smaller BTO units in non-mature estates.

Should the eligibility age be reduced, I believe singles can avail themselves of such grants, too, thus supportive of singles’ home affordability.

If the Government has budgetary concerns or believe that younger singles should not be incentivised to buy a place of their own, the level of housing grants accorded can be on a graduated scale, where grants provided for 28-year-olds are at a discount to the full enhanced CPF housing grants, with an annual step-up to the current eligible age of 35.

Yet, singles aged below 35 who wish to have a place of their own today would have to either purchase a private residential property, which, needless to say, is significantly more expensive than public housing, or rent a flat in the open market.

However, even in the HDB rental market, many singles would be priced out of the market if they wish to rent a place of their own. Median rents for a 3-room HDB flat are, currently, about S$2,000 a month, which is, essentially, the entire take-home salary of a Polytechnic graduate today.

The purchase of a BTO 2-room flexi flat, on the other hand, is a lot more affordable. Based on indicative prices of close to S$100,000 for a 2-room Flexi flat in non-mature towns in the latest August BTO launch, the monthly repayment amount over a 25-year period is only around $400 a month, a fraction of what it costs to rent in the open market.

So, while it is abundantly clear that many Singaporeans who may be single for various reasons before the age of 35 would like to have a place of their own, many simply cannot afford to do so. Should we not look into further enabling single Singaporeans to meet their housing needs and aspirations?

Mdm Deputy Speaker, when we look back at the time before the introduction of the Single Singapore Citizen scheme, the original rationale for excluding singles from owning HDB flats was: first, to prioritise BTOs for families as the use of space in land-scarce Singapore was not optimised; and secondly, that home ownership by singles was supposedly inconsistent with the Government's social policy of encouraging marriage and preserving the traditional family unit.

The change in policy came about in 1991 by allowing singles over 35 to buy resale HDB flats but limited to 3-room flats in selected locations. The rules were further relaxed over the years, but the next big break came in 2013 when singles over 35 were, for the first time, allowed to buy new, subsidised 2-room flats directly from HDB.

Mdm Deputy Speaker, the introduction of the Single Singapore Citizen scheme and the developments that followed showed that the Government can be responsive to the changing demographics of society.

In fact, Minister for National Development Desmond Lee recently reassured Singaporeans that the Government cares about housing for singles, when he said at the Singapore Economic Policy Forum on 29 October 2021: “Some Singaporeans remain single for a variety of reasons, including obligation to family and parents, or a matter of choice, or a matter of life course. But many still want or need their own living space. They may wonder if we care about their housing needs. To these Singaporeans, let me assure you: we do. We recognise your needs, your aspirations and your sacrifices. That’s why we’ve in fact been expanding housing options and grants for singles over the years.”

However, 30 years on from the introduction of the Single Singapore Citizen scheme, singles below 35 remain largely precluded from owning their own HDB flat. While there have recently been welcome exceptions carved out for certain special situations, such as for single parents, the general threshold of excluding singles below 35 years of age seems to have been retained by default since 1991, despite changing demographics and societal mindsets.

This rule has serious implications on the growing number of singles under 35, depriving them of the security of home ownership if they are priced out of the private market, the private and HDB rental market and not having a place to call their own and build their own lives. More importantly, current policy signals to single Singaporeans that their marital status, whether by choice or due to factors beyond their control, is somehow viewed as undesirable and undeserving of Government support for home ownership.

Mdm Deputy Speaker, implicit in HDB's exclusion of singles under 35 is the expectation that Singaporeans should get married before turning 35 years old and that, up until that point, single Singaporeans will live with their parents. While this traditional life progression might have been more relevant back in 1991, we know now that Singaporeans are staying single for longer for myriad reasons and not necessarily moving straight from their parents’ home into a matrimonial home.

Contrary to popular belief that the younger generation are eschewing marriage, surveys have shown that many single Singaporeans still want to get married. In fact, over the last 20 years, the general marriage rates for resident males and females have been consistent at 43.3 for males and 40.2 for females. The latest data point on general marriage rates in 2021 is even higher on a year-on-year basis for both males and females, at 45.3 and 44.2, respectively.

What has changed is that Singaporeans are staying single for longer and getting married later in life. Based on data from SingStat, the proportion of singles among citizens in the 30 to 34 years age group is now at a record high of 42.2% in 2021, increasing steadily from 27.6% in 2000 and 36.9% in 2010.

A 2013 survey conducted by IPS sheds some light on why Singaporeans are getting married later in life. The IPS found that, among respondents who wanted to get married, the key reasons for their getting married later in life than their ideal age were “the delayed acquisition of the markers of adulthood” and “not having a suitable partner.”

At the same time, data shows that more young people are moving out of their parents’ home even before marriage. DOS data shows that between 2017 and 2020, the number of persons aged below 35 and living alone has almost doubled from 12,300 to 25,000. There are, of course, those who are neither living with their parents nor living alone. But there are also a considerable number who, while still living with their families, do not have the financial ability to live on their own, as much as they desire to do so.

While it can be argued that some singles might have needed to move out given working from home requirements during the pandemic, many others have expressed a yearning simply to lead more independent lives in their early adulthood.

The data and trends highlight the negative effects of excluding those under the age of 35 from owning HDB flats and, considering these developments, it behoves the Government to revisit the issue and assess the validity of the main arguments against HDB flat ownership by singles under 35.

Mdm Deputy Speaker, one of the key arguments for limiting singles’ ability to buy HDB flats relates to the allocation of resources: that in land-scarce Singapore, flats should be prioritised for families over singles. To this point, I am comforted by Prime Minister Lee Hsien Loong’s comments during the National Day Rally earlier this year, where he shared that, and I quote, “We have done our studies and planning. We will have enough space for future generations. Our problem is not finding the space to build enough flats, nor keeping homes affordable for Singaporeans. We know how to do that.”

Putting the issue of land scarcity aside, I would like to make three points on the issue.

First, data from past BTO exercises shows clearly singles do not compete with young couples and families for the same type of flats in non-mature estates. The data shows that young married couples overwhelmingly apply for 3-room or larger BTO flats and very few apply for 2-room flats, whereas singles are limited to buying only 2-room flexi BTO flats. For example, in the BTO exercises since 2015, the application rate for 2-room flexi flats among first-timers have consistently been less than one time, while that for 3-room or larger BTO flats has consistently been multiple times oversubscribed. Moreover, first-timer singles can only apply for 2-room Flexi flats in non-mature locations, with a cap of 65% of the balance 60% of such flats meant for non-elderly applicants; in other words, at most, 39% of such flats.

This shows that even without making any adjustments to the unit mix of various types of flats, lowering the minimum age threshold for singles to buy a BTO flat from 35 to 28 is expected to have a minimal impact on young couples’ likelihood of securing a flat.

Secondly, we are in full agreement that public housing policy should provide extra support and incentives to young couples and budding families. Having said that, providing support for young couples and families should not be viewed as mutually exclusive from expanding HDB options for singles. For instance, the Government can loosen the BTO eligibility criteria for singles without in any way impinging on the subsidies and other benefits given to young couples, which may even be enhanced.

Thirdly, even if there were to be a question on the allocation of limited resources, such an exercise will always be a balancing act conducted in accordance with Government priorities and, more importantly, guided by fundamental principles and values.

Our current policy measures have been described as imposing “anti-single penalties” and which, unknowingly, become signals to singles that their marital status, whether by their own volition or not, is viewed as undesirable and undeserving of Government support for home ownership.

The next key argument against singles owning HDB flats is that it is somehow in conflict with the Government’s goals of encouraging marriage and family formation. If this hypothesis were true, then we might see an immediate dip in marriage rates for singles over 35 years old who have been able to buy an HDB flat of their own.

To test this, we looked at the number of marriages in the 35- to 39-year-old age group at two key points in time when HDB options for singles were expanded: after October 1991 when the Single Singapore Citizen scheme was first introduced; and after July 2013 when singles were allowed to buy 2-room BTO flats in non-mature estates.

The data showed that in the three-year period from 1992 to 1994, as well as from 2014 to 2016, marriage rates and the number of marriages for both males and females in the 35- to 39-year-old age group went up instead of falling.

We accept that this could be a simple coincidence of timing between housing policy and marriage rates, which are, of course, affected by multiple factors and do not necessarily imply causation. However, the data does suggest that we need not be too circumspect about expanding HDB options for singles as a factor that will single-handedly cause a further delay or decline in marriages. On the contrary, allowing singles to have a home of their own might even encourage marriage and family formation.

Mdm Deputy Speaker, this Adjournment Motion does not call for a major overhaul to the policies that are in place today. I hope we can, firstly, take urgent and decisive steps to increase the availability of public housing and address the current demand-supply imbalance; and, secondly, lower singles’ eligibility age for HDB BTO flats from the current 35 to 28.

I am comforted that there is a slight reallocation of 2-room flexi BTO flats in non-mature areas for singles, with up to 65% of the non-senior 2-room flexi flats in non-mature estates will be set aside for first-timer singles, an increase from up to 50% currently.

This, however, only means a marginal increase of, at most, 9% of 2-room flexi flats in only non-mature estates available.

As elected Members of Parliament, we are given a mandate from and by the people we serve. We, therefore, must lend a listening ear to the generation ahead of us and ensure that our public housing policies are both inclusive and reflective of the diversity of our society.

Senior Minister of State Sim Ann shared last year that beyond just a roof over our heads, home ownership has provided Singaporeans with a sense of stability, security and belonging and has given us a strong stake in our country’s progress. In this spirit, I hope the Government can consider the points I have raised in this speech and ensure that the housing needs of singles and all Singaporeans are met.

Mdm Deputy Speaker, firstly, let me thank Mr Louis Chua for raising his perspectives on the housing issue. I would like to assure Singaporeans that ensuring affordable and accessible housing for Singaporeans has always been an important priority for this Government.

Today, almost nine in 10 Singaporeans own a flat – one of the highest home ownership rates in the world.

At the same time, we are keenly aware that housing preferences and aspirations change over time and across different life stages of families and individuals. Therefore, MND and HDB have been actively engaging Singaporeans to understand their needs and aspirations, as also reflected in Mr Louis Chua's theme for the Adjournment Motion – "housing needs for Singaporeans". And we have been listening to Singaporeans, hearing their views and taking in their suggestions.

Most recently, as part of the year-long Long-Term Plan Review (LTPR), we have heard from over 15,000 people from all walks of life.

Seniors shared with us that they would like to age-in-place in the neighbourhood that they are familiar with.

Working adults shared with us that they would like to have workplaces closer to home to minimise commute and to have the flexibility to reconfigure their flats to provide more space as more of them work from home.

Couples with young children told with us they would like to live near their family so that grandchildren can be taken care of by their grandparents.

Young couples wanting to get married and settle down shared with us their anxieties of getting a flat at an affordable price, especially in a bullish property market.

Singles, especially those older singles, shared with us that they would like to get a place of their own near their ageing parents so that they can better care for their elderly parents.

Younger Singaporeans have also shared with us that they value their own personal space and would like to stay by themselves, even if it is rental, on a temporary basis. Many of them still wish to own their homes eventually.

We hear these views, aspirations and needs. We take them seriously and feed them into our Long-Term Plan Review, which was recently launched and exhibited at the URA Centre. We have received many valuable feedback and suggestions, some of which are quite similar to what Mr Louis Chua has raised today. We are studying those suggestions carefully and we are engaging Singaporeans as part of the Forward Singapore exercise.

We would want to meet the needs of all Singaporeans, their aspirations and their wants if we can. But we have limited land and resources and would have to prioritise and allocate within these constraints. So, I thank Mr Louis Chua for recognising these constraints and recognising the very difficult stresses and strains the Government has to deal with.

That is why we need to prioritise public housing for those who have more urgent housing needs, for example, implementing income eligibility criteria for BTO for married couples as well as for singles.

I would like to address a couple of points that Mr Louis Chua has raised.

Before that, I would like to assure Singaporeans that even as we engage all of you as part of the Forward Singapore exercise, we have already taken steps to address the concerns raised by various demographic groups and various segments of Singaporeans. We are closely monitoring the situation, to assess if other measures are needed.

On young couples, which Mr Louis Chua talked about, I am glad that Mr Louis Chua has recognised the many moves and steps that we have taken in terms of giving first-time couples priority, including in this recent August BTO launch as well as stepping up and enhancing the various grants and support that we give to first-time couples.

We are also taking steps to raise the housing supply. We are working hard, working with the construction industry that has been severely impacted because of the COVID-19 pandemic to ramp up BTO supply to 100,000 flats till 2025, if demand and circumstances warrant it.

Mr Louis Chua spoke about the demand for BTO flats. We monitor this situation very carefully. Although the application numbers have risen and increased, four in 10 of the applicants did not choose a flat when invited to do so. We are monitoring the supply situation, application rates and the locations where application rates are elevated.

In terms of affordability, I would like to assure Singaporeans that this is an important consideration for HDB and the Government. We have looked at the statistics. Most first-timers only need to use less than a quarter of their monthly income to pay for their loan instalments. In fact, most of them can service their housing loans using their monthly CPF contributions, with little or no cash outlay.

I would like to address a second group of people that Mr Louis Chua spoke about. He talked about singles and the need to cater to their needs, aspirations and wants.

I am glad that Mr Louis Chua has also recognised that, over the years, the Government has been trying to accommodate and support their needs. More recently, we have also made changes to the BTO allocation quota. In 2013, we opened access for singles to purchase new 2-room flats from HDB under the Single Singapore Citizen (SSC) scheme. We have also raised the allocation quota for these 2-room flats in 2015, from 30% to 50% of the non-senior quota in the non-mature estates.

And because we still see a fairly strong broad-based increase in housing demand across all groups, including singles, which Mr Louis Chua spoke about, we have further increased the quotas to better support all first-timers, including singles. Specifically, we raised the non-senior quota from 50% to 65% with effect from the August 2022 BTO exercise. And eligible first-timer singles can also qualify for various housing grants – up to $40,000 for a new flat purchase and $80,000 for a resale flat purchase.

We have taken steps to adjust, to finetune our policies, trying to meet the needs and aspirations of all Singaporeans within the constraints of the land and resources that we have.

There is also another trend that we have observed where more singles and young couples are renting. There is a vibrant rental market, with a wide variety of both public and private options. Some of these are provided by seniors or families who are renting out their rooms or flats to supplement their income and retirement adequacy.

An increasingly popular housing trend, especially amongst the youths, is in the form of co-living or shared housing arrangements with common facilities. These spaces are attractive as they provide the flexibility of shorter-term rental contracts. Some even provide housekeeping services and fully furnished rooms. We see many commercial providers stepping up with innovative offerings that cater to the diverse range of needs for singles and youths.

I think this shows that the market is functioning and responding agilely to consumer demand and preferences. This is an important part of the entire housing market. It is not just public housing and private housing, but also commercial providers with rental options.

We will continue to review developments holistically and comprehensively and assess if there would be ways to work with the private actors to meet the demand from youths and singles.

And to Mr Louis Chua's point about lowering the age eligibility from 35 today to 28 for the housing market for singles, this is an issue that we have discussed before. We are looking at it and, certainly, many Singaporeans have also suggested this idea of lowering the age limit and eligibility criterion as part of our long-term plan review conversations. We will, certainly, engage these issues as part of our Forward Singapore discussions.

But there are considerations that still remain – there are binding constraints in terms of land resources as well as implications on the housing market with enhanced demand. We have to bear in mind that supply is inelastic while demand can change very quickly. That might lead to high prices and those at the margins – especially those vulnerable singles like the elderly singles, single parents and those in need of housing urgently – might be squeezed out.

So, these are considerations that we have to bear in mind.

In conclusion, let me sum up by just thanking Mr Louis Chua for recognising many of the moves and efforts that we have made as the Government to accommodate the needs, aspirations and wants of Singaporeans. This is certainly something that we will continue to work towards as part of the Forward Singapore exercise. We will engage Singaporeans on their housing needs and aspirations and discuss how we can each play our part to build an inclusive home for our families and loved ones.

Singaporeans' housing needs will become more diverse as our society becomes more diverse. And housing is so much a core part of families, society and the social compact between the Government and our citizens, between each of us in society and across generations.

Minister Desmond Lee will be launching our Forward Singapore engagements later this month and we hope that everyone will participate actively, giving us ideas, suggestions and co-develop these solutions together but, importantly, co-create solutions that bring Singapore together and bring Singapore forward, while balancing the needs of various groups of people for housing aspirations.