HDB to continue prioritising first-time buyers and keeping flats affordable
HDB clarified that the new flats are not priced based on the development costs of projects, but rather on household incomes and prices of various types of flats.
To meet the housing aspirations of Singaporeans, the Housing Development Board (HDB) will ensure that public housing remains affordable and accessible to all, announced Minister for National Development Mr Desmond Lee in a press release on Monday (Oct 31).
“This is a key national priority, and provides the basic foundation for us to raise our families, bring up our children, and build strong communities,” he said.
To achieve this, HDB will continue to build and sell new HDB flats at prices below the market, increase its market subsidies over this period to keep Build-to-Order (BTO) prices relatively stable, and also provide housing grants to eligible buyers of both new and resale flats.
The board also added that in pricing new flats, the key consideration is to ensure affordability for flat buyers, especially first-timers.
Building on this, HDB clarified that the new HDB flats are priced based on affordability, and not development costs of projects.
It establishes market value of new flats from comparable resale flats nearby, and applies a significant subsidy to ensure affordability based on household incomes and prices of various types of flats offered by HDB.
HDB also added that construction costs have been “largely absorbed by HDB”, allowing most first-time buyers to “use less than a quarter of their monthly income to service their housing loans”. It also noted that close to 90 per cent of first-timer families service their HDB loans using CPF with little or no cash payments.
While BTO application rates have gone up in recent years, virtually all first-timer families have a chance to book a BTO flat in the non-mature estates within three tries.
According to HDB, nine in 10 applicants are able to do so within two tries. To increase their chances, HDB encourages buyers to apply to projects in non-mature estates and with lower application rates.
To meet the strong housing demand, HDB has also been ramping up the supply of BTO flats and will launch up to 23,000 flats per year in 2022 and 2023, a 35 per cent increase from the 17,000 flats launched in 2021. It is also prepared to launch up to 100,000 flats in total from 2021 to 2025, if needed.
This means that not only will more buyers be able to secure their BTO flats, and in a wider range of locations, they will also be able to select from a larger pool of flats that meet their budgets.
It is also keeping median waiting times for new flats between four to four and a half years and is working to launch more flats with a waiting time of less than three years.
“We will continue to work hard to reduce the delays to BTO projects, without compromising safety and quality,” said HDB CEO, Mr Tan Meng Dui.