Government's Response to Current Pace of Increase in HDB Resale Prices
Ministry of National DevelopmentSpeakers
Summary
This question concerns the 12.3% year-on-year increase in HDB resale prices and measures to ensure housing affordability as raised by Mr Chua Kheng Wee Louis. Minister Desmond Lee stated that while demand and low interest rates have driven prices, the average mortgage servicing ratio remains stable at 23%. He highlighted that housing grants of up to $160,000 help first-timer families purchase flats, often requiring little or no cash outlay due to CPF contributions. To meet demand, the Government is ramping up supply by offering 22,300 flats in 2021 and plans to launch more than 17,000 Build-To-Order flats in 2022. Minister Desmond Lee concluded that the Government will continue monitoring market conditions to ensure public housing remains sustainable and aligned with economic fundamentals.
Transcript
36 Mr Chua Kheng Wee Louis asked the Minister for National Development (a) whether the current pace of HDB resale price increases, where the third quarter flash estimates of the Resale Price Index was up 12.3% year-on-year, is in line with the Government’s intent to ensure a stable and sustainable property market; and (b) what are the measures the Government is considering for implementation to improve housing affordability.
Mr Desmond Lee: The Government is committed to ensuring a stable and sustainable property market where prices move broadly in line with economic fundamentals. The recent increase in prices can be partly attributed to a broad-based increase in demand for housing, supported by the current low interest rate environment.
HDB resale flats continue to remain affordable. On average, the mortgage servicing ratio, which is the proportion of monthly income used to service mortgage instalment payments, has remained stable at 23% among resale flat buyers taking an HDB housing loan, over the past three years. This means that first-timer buyers, generally, have little or no cash outlay in servicing the payments for their resale flats as their mortgage loans can be paid using their CPF contributions. The Government also provides housing grants of up to $160,000 to ensure resale flats remain affordable for eligible first-timer families.
To meet the demand for HDB flats, HDB is on track to launch about 17,000 Build-To-Order (BTO) flats in 2021, which are higher than the 14,600 and 16,800 flats launched in 2019 and 2020 respectively. Including the 5,300 flats offered under the Sale of Balance Flats exercises and open booking, a total of 22,300 flats will be offered in 2021. HDB will continue to ramp up the flat supply and will launch more than 17,000 flats in 2022 to meet the strong demand.
At the same time, we are continuing to monitor the economic and property market conditions very closely and will ensure that public housing remains affordable and accessible for Singaporeans.