CPF Members Whose Savings Are Withdrawn under Residential Properties Scheme for HDB Flat Purchases

41 Mr Leong Mun Wai asked the Minister for Manpower as at December 2021, what is the median percentage of CPF members whose savings were withdrawn under the Residential Properties Scheme for the purchase of HDB homes at the 25th, 50th and 75th percentiles of savings for each age group.

42 Mr Leong Mun Wai asked the Minister for Manpower (a) in each of the last 10 years, how many and what percentage of HDB home owners were unable to fully refund their CPF savings used with accrued interest when they sold their HDB flat; and (b) of these cases, how many of the flats were sold (i) at or above HDB valuation and (ii) below HDB valuation.

Dr Tan See Leng: As at December 2021, 39% of members had withdrawn their Central Provident Fund (CPF) savings to pay for down payments or housing loans for their Housing and Development Board (HDB) flats. While the vast majority of local households own their homes, some of them stay in private properties, and only one or two members from each household use their CPF to pay for their housing typically. The proportion of members who had withdrawn their CPF savings to pay for HDB flats increased with age and higher Ordinary Account balances.

For those aged 55 years and above, 43% of members in the first quartile of Ordinary Account balances, that is the 1st to 25th percentiles, 46% of members in the middle two quartiles, that is the 26th to 75th percentiles, and 59% of members in the fourth quartile, that is the 76th to 100th percentiles, had withdrawn their CPF savings for a HDB flat.

For those younger than 55 years old, 13% of members in the first quartile of Ordinary Account savings, 40% of members in the middle two quartiles and 40% of members in the fourth quartile had withdrawn their CPF savings for a HDB flat. Those in the younger age group with lower Ordinary Account savings are likely to be young workers who are just starting their career, and thus, fewer of them have bought a home.

When members sell their property, the sale proceeds will first be used to pay off any outstanding housing loan before being used to refund the principal amount of CPF withdrawn for housing and the interest accrued. Any remaining sale proceeds are then paid out to members in cash.

Among HDB flats sold in 2021, about 90% of cases were able to fully make the refunds to their CPF accounts. Of the remaining 10% of cases, less than 1%, or about 12 cases, were sold below market value. These cases form about 0.03% of all HDB flats sold in 2021. In 2018, HDB had streamlined its resale process such that buyers and sellers can better decide the asking and selling price of a HDB flat based on the detailed information provided on the flat in HDB's Resale Flat Prices portal. The percentage of members who sold below valuation and were unable to refund their CPF has since remained very low.

These trends are in line with the design of the CPF system, which was designed to assist Singaporeans to own their homes and to service their mortgages with little or no out-of-pocket cash. Together with a commitment and policy to keep public housing affordable and accessible, and with many Singaporeans tapping on their Ordinary Account savings, the CPF system has helped Singaporeans achieve their aspirations to own their homes.

In addition, our CPF system is also designed to help members save for their basic retirement and healthcare needs, by allocating a proportion of members' CPF contributions to their Special and MediSave Accounts for these purposes.