Pricing Policy of HDB Flats

Mr Gan Thiam Poh asked the Minister for National Development if there are plans to review the existing pricing policy for HDB flats to ensure that public housing remains affordable for Singaporeans.

Mr Khaw Boon Wan: We must always ensure that new HDB flats are affordable to newlywed first-timers.

Since May, we have, through several Build-to-order (BTO) launches, stabilised the prices of new HDB flats. In Parliament last month, I illustrated the affordability of these newly launched 3-room, 4-room and 5-room flats for typical buyers. The BTO prices are about five years of their annual income and with Government housing grants, their monthly mortgage instalments are affordable, often with little cash outlay.

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This is the approach we take to ensure affordability of public housing for newlywed first-timers.

For second-timers, the issue is more complicated as they rely more on the resale market and our influence over the resale market is indirect. The current resale prices are the results of an imbalance in supply and demand. We are taking active steps to re-balance them, but we need time.

I am nevertheless optimistic, that as we ramp up the HDB building programme, the temporary imbalance will ease. Meanwhile, we are watching the deteriorating global economic situation closely. While ground-zero is at Europe, the crisis has global implications.

Singaporeans are strongly advised to be prudent in their property purchases. The current low interest rate will not stay low forever. Any global economic recession may also affect their jobs. There is a wide range of housing options and prospective buyers should think wisely and buy within their budget.

On the other hand, existing HDB owners should refrain from cashing out their flats without thinking through their subsequent housing plans.

Our unique public housing programme has delivered the world's highest home-ownership record. With prudence and the right level of expectation, I am confident that almost all Singaporeans can afford their homes.