SINGAPORE: Prime Minister Lawrence Wong said public housing will always be kept affordable for Singaporeans, as he spoke at a dialogue on Tuesday, Jan 21, with around 900 students at the University Cultural Centre in the National University of Singapore (NUS), as reported by The Straits Times.
PM Wong added that the Housing Board will continue to price new flats based on income levels rather than the resale market.
He said, “We are able, through heavy government subsidies, through what we do on the HDB side, to provide assurance to all of you, both now and in the future, that we will always keep public housing affordable for Singaporeans.”
According to the global research group Urban Land Institute (ULI), housing is considered affordable if the price-to-income ratio is below five, which means a flat’s price is within five times what a buyer earns in a year. According to ULI’s report in May, the ratio is 4.7 for HDB flats in Singapore.
PM Wong acknowledged concerns about rising housing costs, especially with some resale flats selling for over S$1 million.
He shared that in the 70s, his parents bought an HDB flat for around S$30,000. He noted, “You may say, wow, so cheap. Today, it is so much more expensive, 10 times or more. But remember, at that time, their salaries were nothing like today’s salaries.”
He explained that as flat prices have risen, so have Singaporeans’ incomes. He added that today, more than eight in ten first-time buyers can afford their flats and pay their mortgages using their Central Provident Fund, with little or no cash needed.
PM Wong noted that resale prices are currently “on the high side”, largely due to the pandemic disrupting the construction industry. The government has since accelerated flat construction and put out more land for private housing. However, he noted that increasing supply takes time as flats take years to build.
Addressing the high application rates for some Build-To-Order (BTO) flats, he explained that demand is higher in more attractive locations.
He said that because the government has been putting out so many new flats, the application rates have come down. This means it’s now easier to get a flat, and many Singaporeans are able to get one in just two or three tries, he said.
He added that the government will continue to review the situation, and its efforts to increase the flat supply will eventually help stabilise the property market. /TISG
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