Singapore to boost public housing affordability amid million-dollar prices
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.
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In his annual policy speech, Prime Minister Lee pledged to keep public housing, built and leased by the Housing and Development Board (HDB), affordable.
"Housing has always meant much more for us than a roof over our heads," Lee said in the National Day Rally, an address traditionally held two weeks after the republic's August 9 independence day celebrations.
"It also gives every Singaporean a valuable asset and a powerful reason to fight for our country and our future," Lee said.
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. Lee did not specify what the income ceiling will be.
At present, there are no income restrictions for the public housing secondary market. However, new HDB flats for first-time buyers are only available to a couple with a combined 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.
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.
Lee's remarks come as the issue of public housing affordability and availability re-emerges as a key cause for public anxiety.
The long-ruling People's Action Party (PAP) has governed with a legislative supermajority for decades, but has in the past suffered setbacks at the polls due to housing and public transport woes fuelled by rapid immigration.
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.
In June, a three-bedroom flat with a 49-year lease and located in the Tiong Bahru district near the city centre sold for S$1.5 million (US$1.1 million) - marking a record in the public housing secondary market.
Hundreds of similar units, especially those closer to the city or in preferred districts such as Ang Mo Kio - where Lee is one of the MPs - have sold for more than S$1 million.
The PAP has been under pressure on other fronts as well, following a spate of internal scandals that raised questions about probity within its ranks, and a delay in the succession of power from Lee to his designated successor Lawrence Wong.
Lee, in his speech on Sunday, acknowledged that his initial plan to step down as prime minister before he turned 70 in 2022 had been delayed by the pandemic.
Nonetheless, the "renewal" process was now back on track and would not be delayed by the PAP's latest controversies, the prime minister said, as he urged Singaporeans to back Deputy Prime Minister Wong and his team of fourth-generation PAP leaders.
He did not provide further details on the timeline for the succession. Lee and Wong have said the transition could take place before or after the next general election, which must be held by 2025.
This article originally appeared on the South China Morning Post (SCMP).
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