Measures to Deal With Consecutive Increases in HDB Resale Flat Prices

Mr Yip Hon Weng asked the Minister for National Development as HDB resale prices have risen for 23 months in a row in June 2022 (a) whether ramping up the supply of HDB BTO flats coupled with the recently implemented property cooling measures are sufficient to rein in the cost of purchasing HDB resale flats; and (b) whether the Government will take additional steps to moderate HDB resale prices.

In December 2021, the Government announced a set of measures to cool the private residential and HDB resale markets. Specific to HDB flat buyers, the Loan-to-Value (LTV) limit for housing loans from HDB was reduced from 90% to 85%. For those taking housing loans from the financial institutions, the Total Debt Servicing Ratio (TDSR) threshold was also reduced from 60% to 55%. These measures are intended to encourage greater financial prudence among homebuyers, providing an additional buffer against potential income reductions or interest rate increases.

To meet the strong demand for public housing, alongside these cooling measures, the Government also announced that we will ramp up the HDB Build-to-Order (BTO) flat supply 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.

Notwithstanding recent media reports of a few HDB flats that have transacted at prices which exceed the norm, there are early signs that the measures may have moderated the pace of price increase in the housing market. For the public housing market, the HDB Resale Price Index reflected a lower price increase of 2.4% in 1Q2022 and 2.6% in 2Q2022 based on flash estimates, compared to 3.4% in 4Q2021. Nevertheless, given the on-going ramp-up in BTO supply, and the evolving market and economic situation, more time is needed to assess the extent of the impact of these measures.

The Government will continue to monitor housing market conditions closely and make changes where necessary to ensure that housing remains affordable and accessible for all Singaporeans, especially for those planning to purchase their first home.