New Measures Aimed at Improving Housing Accessibility and Affordability
The Ministry of National Development (MND), led by Minister Desmond Lee, is focused on addressing challenges in Singapore’s public housing system, particularly the high rejection rate for Build-To-Order (BTO) applications. During a lengthy parliamentary session, Lee outlined the government’s ongoing and upcoming efforts to ensure Housing Development Board (HDB) flats remain affordable and accessible for Singaporeans.
Impact of the Pandemic on Housing Supply
Before the COVID-19 pandemic, the public housing market in Singapore was relatively stable, with demand matching supply. However, disruptions caused by the pandemic—such as halted construction, labour shortages, and industry pressures—led to a significant decrease in flat completions. In 2020, HDB delivered fewer than 8,000 flats, compared to 12,000 the previous year.
This supply crunch pushed more buyers towards resale flats, driving up prices. Concurrently, the demand for BTO flats surged as prospective homeowners queued earlier due to uncertainties in securing homes. Between 2020 and 2022, first-time BTO applicants increased by 80%, while second-time applicants grew by 140%.
Current Measures to Meet Demand
The government has ramped up efforts to address the housing crunch:
Increased Supply: HDB completed over 20,000 flats in 2022 and aims for similar numbers in 2023. Between 2021 and 2025, up to 100,000 new flats will be launched.
Targeted Policies: At least 95% of larger BTO flats in both mature and non-mature estates are reserved for first-time buyers. This ensures young couples and families have better access to housing.
Stable Pricing: Despite a 30% rise in construction costs over the last two years, the government has maintained near-flat BTO prices to safeguard affordability.
Promising Outcomes
Recent data highlights the success of these initiatives:
Nearly all first-time applicants for non-mature estate BTO flats secure a flat within three tries.
Over 80% of buyers who obtained their keys in 2022 fully financed their mortgages with CPF contributions, requiring little to no cash.
Resale price growth has slowed following cooling measures.
Future Plans and Challenges
To address persistent issues, the government plans to launch more Shorter Waiting Time (SWT) flats starting in 2024, aiming to deliver 2,000–3,000 units annually by 2025. Priority will remain on first-time buyers, particularly young couples and families.
Minister Lee emphasised that mature estates, while desirable, face land constraints. Pricing flats in these areas too low would only exacerbate demand, creating unfair windfalls for buyers who could later sell their flats for significant profits. To balance this, measures like the Prime Location Public Housing (PLH) scheme ensure affordability in central areas.
Balancing Trade-offs for Long-term Sustainability
Lee addressed concerns over housing costs by highlighting the broader fiscal considerations. Public housing subsidies come with trade-offs, such as potential impacts on national reserves. Proposals to eliminate land costs from HDB pricing could compromise Singapore’s ability to fund essential services like healthcare and education.
“Our public housing system is not without flaws, but it has enabled 90% home ownership in a global city—an achievement few other nations can claim,” Lee remarked, reaffirming the government’s commitment to keeping public housing inclusive, accessible, and affordable for future generations.
