Affordable Housing Remains the Focus
The Housing and Development Board (HDB) has clarified its methodology for pricing Build-To-Order (BTO) flats, emphasising that affordability for buyers is prioritised over profit margins. According to HDB and the Ministry of National Development (MND), flat prices are determined independently of development costs, ensuring affordability based on household incomes.
How Affordability is Assessed
HDB evaluates resident household incomes against the variety of flats and prices available in each BTO launch. Using benchmarks like the Mortgage Servicing Ratio (MSR), which limits monthly income allocated to mortgage payments, HDB ensures flats are accessible to households across different income brackets. First-time buyers also benefit from housing grants tailored to their income levels.
For 2022’s first half, most buyers in non-mature estates allocated 25% or less of their monthly income to HDB loan instalments, often covering payments through CPF contributions with minimal cash needed.
Variations in Flat Pricing
BTO flat prices are influenced by location and project-specific attributes. HDB ensures fairness by reflecting these factors in resale market valuations after the Minimum Occupation Period (MOP). HDB applies substantial subsidies to assessed market values, ensuring affordability while accounting for differences in flat attributes.
In prime areas, the Prime Location Public Housing (PLH) scheme adds extra subsidies to maintain accessibility for first-time buyers. However, PLH flat owners must pay a portion of resale profits to mitigate excessive windfall gains.
Independent Approach from Private Developers
HDB’s pricing is unrelated to development costs, distinguishing its method from private developers who factor in profit margins. Despite rising construction costs, BTO flat prices have remained stable, reflecting HDB’s commitment to affordability. From 2012 to 2022, price adjustments have stayed proportional to household income growth.
Public Accessibility of Pricing Data
HDB provides transparent information on BTO project costs and selling prices. Recent transaction data, alongside construction and development cost breakdowns, are published on platforms like the HDB InfoWEB. These practices highlight HDB’s focus on affordability compared to private residential developers prioritising profit.
Through these measures, HDB reaffirms its mission to provide affordable housing for Singaporeans, balancing subsidies with sustainable practices.
