On Oct. 14, Member of Parliament (MP) Gan Thiam Poh asked whether there is a plan to address the pent up housing demand as a result of record sale prices crossing a million dollars in mature estates.
Minister for National Development Desmond Lee said that only 38 out of more than 14,400 resale transactions were at these prices.
"These transactions are a small minority, representing less than 0.3% of the total resale transactions this year," said Lee.
Lee clarified that the Housing Development Board (HDB) establishes the market value of a flat by considering factors such as prices of comparable resale flats nearby, the individual attributes of the flat, and prevailing market conditions.
He said that a subsidy is then applied so that flats are priced at a significant discount.
"Today, HDB BTO (Built-to-Order) flat prices remain at around five times of median annual income or less, compared to other major cities in the world where the ratio can be nearly 10 or 20 times," said Lee.
He added: "The vast majority of first timer families are able to buy BTO flats in the non-mature estates, and service their monthly mortgage instalments using their CPF, with zero or minimal cash outlay."
HDB will monitor
In his follow up question, Gan pointed out that the underlying concern might be the anxiety caused by flats that are sold for a million dollars.
Lee said in response: "Certainly, when there are these headline grabbing articles which talk about HDB flats transacting at those prices, [it] may cause people to have the impression that overall there's very high demand, and that prices are escalating significantly."
Lee added that the government will continue to monitor the housing market closely to ensure that Singaporeans have access to affordable public housing.
"Last year, we built 14,600 new flats, and this year we are aiming to build 16,700 flats, so each year we'll calibrate the number based on demand," said Lee.
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Top image adapted via CNA.