HDB Resale Flat Price and Cash-over-valuation Trends in Past Year and Support for Families Opting for Resale Flats due to Construction Delays for BTO Flats

14 Mr Desmond Choo asked the Minister for National Development (a) how have HDB resale flat prices and cash-over-valuation trended over the last 12 months; and (b) what are the new measures that HDB will put in place to support families opting for resale flats in view of the prolonged completion of BTO flats due to the COVID-19 pandemic.

The Minister for National Development (Mr Desmond Lee): Mr Deputy Speaker, Housing and Development Board (HDB) resale flat prices registered an increase of 5% in 2020 and 6% in the first half of this year. The proportion of buyers who paid a cash-over-valuation (COV) increased from around one in five in 2020 to slightly above one in three in the first half of 2021. The majority of buyers did not have to pay any COV and the median COV has remained at zero.

For flat buyers who have been affected by Build-To-Order (BTO) delays and who cancel their BTO flats to buy a resale flat due to urgent housing needs, HDB will consider waiving the forfeiture of the option fee or 5% of the flat purchase price based on an assessment of the flat buyers' specific circumstances. HDB will also consider waiving the one-year wait-out period to allow first-time families with urgent housing needs to receive housing grants if they decide to buy a resale flat.

Resale flats are generally available for immediate occupation and buyers can choose from a wide range of flats, according to their preferences and budget. Eligible first-timer families can receive up to $160,000 in grants when they buy a resale flat. We will continue to monitor the market situation to ensure that it remains stable and sustainable.

Mr Deputy Speaker: Mr Desmond Choo.

Mr Desmond Choo (Tampines): Mr Deputy Speaker, I thank the Minister for his assurance and clarification. The need to get a flat urgently for young couples is significant and we also know that there is a significant delay because of COVID-19. I would like to ask the Minister if they can assure younger couples, or couples looking to get a place of their own, if there would be a significant increase in supply; therefore, being able to calm the market down and being able to keep resale flat prices at a reasonable level.

I say this because we recognise increased subsidies can also lead to an escalation in resale transaction prices.

Mr Desmond Lee: Mr Deputy Speaker, indeed, we have increased the supply of BTO launches over the last few years to meet the needs of young families, including echo boomers or the children of the baby boomers. In 2019, we launched 14,600 flats. Last year, some 16,800 flats. And this year, we are on target to launch 17,000 flats.

For next year, we are still looking at demand and keeping track of the property market. We will announce the figures for next year's launch soon. Having said that, we do not see that we will reduce the number of flats for launch next year. Certainly, it will be at or above 17,000 flats.

Mr Deputy Speaker: Ms Carrie Tan.

Ms Carrie Tan (Nee Soon): Thank you, Deputy Speaker. I would like to address the Minister, to find out, due to numerous cases that I have met amongst my residents, such as divorced couples who are not first timers, but they are unable to get any Sale of Balance Flats and also, residents who because of their income, do not qualify for public rental housing, will they also be eligible to have additional subsidies if they had to opt for a resale option?

Mr Desmond Lee: I thank the Member for her continued concern for more vulnerable families. We will assess each case on a case-by-case basis for their eligibility for rental housing or other forms of housing support. And I urge the Member to raise any specific cases to us for our consideration.