Desmond Lee Addresses Affordability Concerns Amid Rising Resale Prices
National Development Minister Desmond Lee reassured Singaporeans that the majority of Housing and Development Board (HDB) resale flats remain affordable for first-time buyers. In response to concerns about escalating resale prices, Lee highlighted that around 80% of first-time families who collected keys to their resale flats in 2023 were able to pay their monthly loan instalments using their Central Provident Fund (CPF) savings, with little to no cash outlay.
While high-priced resale transactions have gained attention, they represent a small minority of the total market. A significant portion of these high-priced flats are maisonettes, jumbo flats, and five-room units located in prime locations, with some offering long leases or exceptional views. These types of flats make up less than 1% of all four-room and smaller flats sold in the past two years.
Lee explained that the recent rise in HDB resale prices is due to an imbalance between supply and demand, exacerbated by the Covid-19 pandemic, which disrupted the Build-To-Order (BTO) building programme. However, the government has increased the supply of BTO flats to address the issue and continues to offer more affordable housing options through measures such as the CPF Housing Grant.
In response to concerns about the Prime Location Public Housing (PLH) model, Lee stated that there is no clear evidence suggesting that it is driving up resale prices in non-PLH areas. He emphasized that changes to housing policy could have widespread effects, and the government will continue to monitor market conditions closely.
The minister also reassured that while the resale market has seen an uptick, housing prices will not rise indefinitely, and historical trends indicate that the property market moves in cycles.
