Plans to Ensure Affordability of HDB BTO and Resale Flats

Mr Shawn Huang Wei Zhong asked the Minister for National Development (a) what is the 10-year trend of median household income per capita for families staying in a 4-room HDB flat as compared to (i) the median price of a 4-room HDB BTO flat and (ii) the median price of a resale HDB flat; and (b) whether the Ministry has considered any long-term plans to ensure affordability of both HDB BTO and HDB resale flats.

All flat buyers enjoy a housing subsidy when they buy a Build-To-Order (BTO) flat from HDB, as HDB applies a significant subsidy to the assessed market value of the flat and prices the flat below the market. In addition, eligible first-timer flat buyers can also enjoy the Enhanced CPF Housing Grant (EHG) of up to $80,000, which provides further support to lower- and middle-income families buying their first home. On the other hand, HDB resale flats are transacted at prices mutually agreed upon by flat sellers and buyers. Eligible first-timers buying resale flats can receive up to $160,000 in housing grants. This comprises the CPF Housing Grant of up to $50,000, EHG of up to $80,000, and Proximity Housing Grant of up to $30,000.

Between 2012 and 2021, the median selling prices of 4-room BTO flats in the non-mature estates bought by first-timer Singaporean families before grants increased by 10%, or by 1.4% after grants, while the flat buyers' incomes grew by 27%. Over the same period, the prices of 4-room resale HDB flats in the non-mature estates bought by first-timer Singaporean families before grants increased about 9%, or decreased by 1.3% after grants, while their median household incomes rose by 48%. Both HDB new and resale flats have thus remained affordable as incomes have kept pace with flat prices. HDB also increased housing grants several times over the same period, which has helped to keep flats even more affordable.

Most first-timers buying new and resale flats in non-mature estates in 2021 only need to use less than a quarter of their monthly income to pay for their loan instalments. This is well below the international benchmark of 30% to 35%. In fact, most of them can service their housing loans using their monthly CPF contributions, with little or no cash outlay.

To meet the strong demand for public housing, we will ramp up the supply of BTO flats and launch up to 23,000 flats per year in 2022 and 2023, an increase of 35% from the 17,000 flats launched in 2021. We are prepared to launch up to 100,000 flats in total from 2021 to 2025, if needed, subject to prevailing demand. MND/HDB will continue to monitor the housing market closely, taking into account long-term demographic and population trends, to ensure that the supply of public housing remains affordable, accessible and responsive to the housing needs of the population.