Addressing Record Resale Flat Prices

Mr Saktiandi Supaat asked the Minister for National Development (a) whether the breaking of the HDB resale price record three times in the past three months is a concern that the Ministry is looking into; (b) whether the Prime Location Public Housing (PLH) model is driving up the resale prices of non-PLH flats in choicer locations; and (c) whether the Ministry is considering imposing a cap on HDB transaction prices so that HDB flats remain fair and accessible to all Singaporeans.

The Government remains committed to providing affordable public housing for Singaporeans. COVID-19 disrupted our Build-To-Order (BTO) building programme and significantly impacted supply. At the same time, demand increased as more Singaporeans sought to move out to live on their own, a trend accentuated by the pandemic. These led to an imbalance in supply and demand, and resale prices increased.

This is why we have significantly ramped up BTO flat supply, and we remain on track to offer 100,000 flats from 2021 to 2025. BTO flats are priced significantly below comparable market value, as the Government provides market discounts to ensure affordability for Singaporeans. Middle- and lower-income first-timer buyers are also given a housing grant of up to $80,000.

Last year, the Housing and Development Board (HDB) completed about 21,400 flats across 23 housing projects, the highest number of projects and flats completed annually in the last six years. This year, we are on track to complete another 18,000 flats.

Last year, we committed to launching 2,000 to 3,000 Shorter Waiting Time (SWT) flats by 2025. HDB is now able to do this one year ahead of schedule and would have offered more than 2,800 SWT flats by the October 2024 BTO exercise.

Families that need temporary housing while awaiting the completion of their BTO flats can tap on the Parenthood Provisional Housing Scheme (PPHS) or the PPHS Voucher.

For the resale market, we have implemented three rounds of cooling measures since December 2021 to temper housing demand and encourage greater financial prudence among home buyers.

Today, the majority of resale flats remain within reach. About eight in 10 first-timer families who collected the keys to their resale flats in 2023 could service their monthly loan instalments with Central Provident Fund (CPF), with little to no cash outlay.

Resale transactions with high prices continue to make up a small minority of total resale transactions. Out of these, about a third are maisonettes and Jumbo flats which are much larger than most flats and have limited supply. More than 70% of the remaining units are 5-room flats with very good locational attributes, high floors, and/or very long remaining leases.

For 4-room and smaller flats at the higher end of transacted prices, they are predominantly located in four HDB estates in or very near to the city centre. So, they are very central and well-served by transport connectivity and comprehensive amenities. More than half are also located on very high floors, above 30 storeys, and have good facing and views. So, they come with very attractive attributes and make up just 0.5% of all 4-room or smaller flats transacted in the last two years.

Since the introduction of Prime Location Public Housing (PLH) in 2021, there is so far no conclusive evidence that the launch of PLH projects has driven up HDB resale prices in those towns. That said, it has only been less than three years since the PLH model was launched and it will be some years more before the first of the PLH flats enter the resale market and we will continue to monitor closely. We have also put in place safeguards to keep prices affordable even upon resale of PLH flats, such as a 10-year minimum occupation period and an income ceiling on resale buyers.

We thank the Member for his concern about rising resale flat prices and for his suggestions. Housing policy is complex and any change in one area may have wide ranging implications in other areas. Our approach to tackling this has been to address the supply and demand imbalances. As set out earlier, we have ramped up supply and implemented measures to moderate demand. As these measures take time to work through the market, we have also increased the CPF Housing Grant to provide quick, targeted and direct support to first timers.

While the resale market has risen in the last few years, we should not expect housing prices to go up indefinitely. History has taught us that the property market moves in cycles. In a time of market exuberance, prospective buyers should be extra careful, because those who buy high will also be harder hit when the market eventually comes down. We encourage buyers to consider the wide variety of housing options available and exercise prudence in their flat purchase.