Debated in Parliament on 10 Jan 2022.
Mr Yip Hon Weng asked the Minister for National Development (a) whether the current high demand and prices for HDB resale flats will have a knock-on effect on the market value of future HDB BTO flats; and (b) if so, how can affordability be ensured for all Singaporeans.
All new HDB flats are priced below the market. When pricing new flats, HDB first establishes their market value by considering the prices of comparable resale flats nearby as well as the individual attributes of the flats and prevailing market conditions. To derive the selling prices, HDB then applies a significant subsidy to the assessed market values to ensure that new flats are affordable to those buying their first home. 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. For resale flats, the Government provides housing grants of up to $160,000 to ensure resale flats remain affordable for eligible first-timer families.
With these generous subsidies and grants, both new and resale flats have remained affordable. Over the past three years, the mortgage servicing ratio (MSR), which is the proportion of monthly income used to service mortgage instalment payments, has remained at about 23% or below for both new and resale flat buyers taking an HDB housing loan, on average. This means that buyers, generally, require little or no cash outlay in servicing the payments for their flats as their mortgage loans can be paid using their CPF contributions.
To meet the demand for HDB flats, HDB has offered about 17,100 BTO flats in 2021. HDB will ramp up the flat supply by 35% over the next two years and launch up to 23,000 BTO flats per year in 2022 and 2023. Looking ahead, HDB is prepared to launch up to 100,000 flats in total from 2021 to 2025, if needed, subject to prevailing demand. The Government has also implemented a set of measures to cool the private and public housing markets on 16 December 2021, to ensure that homes remain affordable over time.
MND/HDB remain committed to keeping public housing affordable and accessible to support the homeownership aspirations of Singaporeans and will continue to monitor housing market conditions closely.
PAPERCUTS