Singapore will boost grants and subsidies to make public housing flats more affordable while imposing new restrictions in the secondary market for such flats, Prime Minister Lee Hsien Loong said on Sunday, as sky-high prices re-emerge as a political headache for the government.
The resale market for public housing flats – home to 80 per cent of Singapore residents – has remained red hot despite earlier rounds of cooling measures, in part due to disruptions caused by Covid-19 in building new flats.
Property prices have been at an elevated level across the board also as a result of an influx of overseas wealth to the republic in the aftermath of the pandemic.
In his annual policy speech, Prime Minister Lee pledged to keep public housing, built and leased by the Housing and Development Board (HDB), affordable.
Among the policy changes was the introduction of more means-tested housing grants to help lower- and middle-income households own homes.
To deal with especially high demand for flats in “choicer” locations – either near the city centre or close to town centres in the suburbs – new rules will be imposed to restrict sales and moderate prices. The government will offer additional subsidies “over and above” what is granted for other new flats, but with the caveat that this sum will be recouped upon sale.
Unlike with a five-year minimum occupancy period for most new HDB flats, owners of these units will only be able to sell them after occupying them for 10 years. In addition, an income ceiling will be introduced for buyers of these flats in the secondary market, in line with similar restrictions for the purchase of new HDB flats.
At present, new flats are only available to a couple with a combined monthly income of no more than S$14,000 (US$10,300), or a single person above age 35 who earns no more than S$7,000. There are no income restrictions for the public housing secondary market.
The latest measures will allow the city state’s growing ranks of single residents the opportunity to buy a wider range of flats after they turn 35. While authorities have emphasised that new HDB flats, known as “built-to-order” (BTO) flats, remain affordable for most income groups, the current public mood surrounding housing has also been coloured by headlines about the million-dollar prices of such housing in the secondary market. The waiting time for a new BTO flat – which can cost as little as S$163,000 (US$120,000) with government grants – is about four years.