Mr Leon Perera asked the Minister for National Development (a) for each year in the past ten years, what is the average and range of prices of each HDB flat type (3-room, 4-room, 5-room and executive flats, BTO or resale) for first-time buyers before and after subsidies; and (b) what is the average household income for first-time buyers of each HDB flat type.
Mr Desmond Lee: All flat buyers enjoy a housing subsidy when they buy a Build-To-Order (BTO) flat, as HDB applies a significant subsidy to the assessed market value of the flat and prices the flat below the market. In addition, eligible first-timers can enjoy the Enhanced CPF Housing Grant (EHG) of up to $80,000, which provides further support to lower- and middle-income families buying their first home.
The prices of 3-room to 5-room BTO flats in the non-mature estates bought by first-timer Singaporean families in 2012 and 2021, and their median household incomes, are tabulated below.
Between 2012 and 2021, the median selling prices of 3-room to 5-room BTO flats bought by first-timer Singaporean families in non-mature estates before grants increased by 10% to 22%, while the flat buyers’ incomes grew by 8% to 46%. The price increases of new flats have thus been moderate. Over the same period, HDB had also increased the housing grants several times. The provision of these generous housing grants has helped to keep BTO flats affordable, with after-grant prices of 4-room BTO flats increasing marginally by 1.4% between 2012 and 2021.
Based on the median household income of new flat applicants and average selling prices, first-timers buying new flats in non-mature estates offered under BTO and SBF exercises in 2021 only need to use 13% to 26% of their monthly income to pay for their loan instalments. This is well below the international benchmark of 30% to 35%. In fact, most of them can service their housing loans using their monthly CPF contributions, with little or no cash outlay.
On the other hand, HDB resale flats are transacted at prices mutually agreed by flat sellers and buyers. Eligible first-timer families who buy a resale flat can enjoy up to $160,000 in housing grants, comprising a CPF Housing Grant of up to $50,000, an EHG of up to $80,000 and a Proximity Housing Grant (PHG) of up to $30,000.
The prices of resale HDB flats in the non-mature estates bought by first-timer Singaporean families in 2012 and 2021, and their median household incomes, are tabulated below.
The resale prices of HDB flats had decreased in six out of the last eight years since their peak in 2013. The increase in prices over the past two years could be partly attributed to a broad-based demand for housing supported by the current low interest rate environment. Nevertheless, with grants of up to $160,000 for resale flats, they remain affordable especially for first-timers, with after-grant prices of 4-room resale flats in non-mature estates decreasing slightly by one per cent between 2012 and 2021. In 2021, first-timers buying resale flats in non-mature estates only need to use less than a quarter of their monthly income to pay for their loan instalments, and hence most of them can service their housing loans using their monthly CPF contributions, with little or no cash outlay.
The Government will continue to monitor the housing market conditions closely, and ensure that Singaporeans have access to affordable public housing.
Ministry of National Development
18 February 2022