For first-time buyers, the majority of HDB resale flats continue to be within their p

For first-time buyers, the majority of HDB resale flats continue to be within their price range: Desmond Lee

Aug 7, 2024

On Wednesday (August 7), the Minister for National Development, Desmond Lee, addressed concerns regarding the affordability of public housing. He stated that the bulk of resale flats offered by the Housing and Development Board (HDB) are still within the reach of Singaporeans.

In response to a question posed in Parliament by Saktiandi Supaat (Bishan-Toa Payoh GRC), Lee mentioned that approximately eight out of ten first-timer families who collected the keys to their resale flats in 2023 were able to service their monthly loan instalments with their Central Provident Fund, with minimal or no cash outlay that was required.

According to Lee, transactions that involve high prices continue to constitute a relatively modest portion of the total number of resale transactions.

A third of these are maisonettes and jumbo flats, which are extremely difficult to come by and are significantly larger than the majority of other styles of apartments, he added.

According to him, more than seventy percent of the units that are still available are five-room apartments that also have a very long remaining lease, are located on a high floor, or are placed in desirable locations.

While this is going on, he stated that only 0.5 percent of all flats of this type that have been sold in the past two years have been four-room or smaller flats that have been sold at the higher end of the pricing range.

More than half of these apartments also have very appealing characteristics, such as being situated in estates around the city centre or in close proximity to it, being on a high floor, or having scenic views.

As a result of the fact that HDB resale price records had been broken three times in the preceding three months, Saktiandi had enquired of the minister whether the government was investigating housing affordability concerns.

The record for the most expensive HDB resale flat in Singapore was broken in July when a five-room apartment located at Margaret Drive in Queenstown for around S$1.73 million was sold.

There was a five-room flat in Boon Tiong Road that sold for S$1.59 million in April, and another similar unit in City Vue @ Henderson that sold for S$1.59 million in June. This surpassed the previous records that were set by those two units.

Furthermore, Saktiandi enquired as to whether or not the Prime Location Public Housing (PLH) model was causing an increase in the resale prices of non-PLH apartments located in more desirable areas, and whether or not the government was contemplating the implementation of a limit on the prices at which HDB transactions are conducted.

It was brought to Lee's attention that ever since the PLH model was introduced in 2021, there has been no hard evidence to suggest that this has resulted in an increase in the prices of HDB resale properties in those towns.

It has been less than three years since the PLH model was introduced, and it will be a few more years before the first of the PLH flats goes on the market for resale. Despite this, we will continue to keep a careful eye on the situation, as he stated.

In the PLH model, flats are subject to more stringent rules, such as a minimum occupation duration of ten years and a clawback of eight percent of the subsidy upon resale.

A change in one area of housing policy may have far-reaching effects in other areas, as housing policy is a complicated topic. For the purpose of addressing this issue, our strategy has been to address the disparities between supply and demand," he explained.

However, because it would take some time for these measures to take effect, the government has enhanced the CPF Housing Grant in order to give first-time homeowners with assistance that is both urgent and specific, he clarified.

The pandemic caused by the COVID-19 virus caused the Build-To-Order (BTO) building program to be halted and had a considerable impact on supply, according to Lee, who explained why the prices of resale flats have soared.

As a result of this, there was an imbalance between supply and demand, he explained, "At the same time, demand increased as more Singaporeans sought to move out to live on their own, a trend that was accentuated by the pandemic."

According to him, the government has "significantly ramped up BTO flat supply," which results in the provision of additional apartments with reduced waiting times.

It was the largest number of projects and flats completed annually in the previous six years, according to him, and HDB finished approximately 21,400 units across 23 housing projects in 2023. There is a good chance that it will finish another 18,000 apartments in the year 2024.

According to him, there have been three waves of cooling measures adopted since December 2021. These steps are intended to reduce the demand for housing in the resale market and to urge homebuyers to exercise greater financial restraint.

Despite the fact that the resale market has been on the increase over the past few years, we can not anticipate that housing prices will continue to grow indefinitely. According to him, "through the course of history, we have learnt that the real estate market moves in cycles."

Those that buy high will also be harder hurt when the market inevitably comes down, so prospective buyers should exercise extra caution while the market is experiencing an exuberant period.

In the meantime, Melvin Yong (Radin Mas) enquired about the rates of occupancy for apartments that were part of the Parenthood Provisional Housing Scheme (PPHS) as well as the amounts of rental vouchers that were utilised by the PPHS.

Families that are waiting for an unfinished apartment to be completed can take advantage of this program to rent a unit directly from the Housing Development Board (HDB) in the interim. Additionally, these families have the option of utilising PPHS rental vouchers in order to reduce their monthly rent payments in the event that they decide to rent a flat or bedroom on the open market.

Regarding the HDB flats that are offered for rent under the PPHS, Lee stated that the occupancy rate is approximately 90 percent. In the ongoing PPHS application procedure that is taking place in August 2024, residents have the opportunity to select from the remaining units.

According to him, the HDB has received ninety applications for the PPHS rental voucher as of the thirty-first day of July in the year 2024.