Further Steps to Rein in Escalating Prices of HDB Resale Flats

Mr Lim Biow Chuan asked the Minister for National Development whether any further steps will be taken to rein in the escalating prices of HDB resale flats.

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.

Nevertheless, we recognise that there is, currently, strong demand for public housing from homeseekers. This strong demand is partly driven by marriage and family formation, and changing social norms and aspirations having resulted in a growing trend of smaller households. This may also possibly be fueled by COVID-19-related factors, such as the construction delays caused to both private and public sector construction projects, including BTO projects.

To meet the strong demand for public housing, the Government has also announced alongside these cooling measures that we will ramp up the BTO supply to launch up to 23,000 flats per year in 2022 and 2023. The BTO supply for 2022 and 2023 is an increase of 35% from the 17,000 flats launched in 2021. For new and ongoing BTO projects, we strive to keep waiting times as short as possible without compromising safety and quality, and have rolled out extensive measures to help contractors complete their ongoing projects in a timely manner. These measures will need time to take effect and we will monitor the market closely. We are prepared to launch up to 100,000 flats in total from 2021 to 2025, if needed. We will calibrate this based on prevailing demand.

Taken together, the suite of demand and supply measures will support a stable and sustainable property market in the medium-term. The Government will continue to monitor the housing market conditions closely to ensure that housing remains affordable and accessible to all Singaporeans, especially for those planning to purchase their first home.