The year 2024 has been a good year for the resale Housing and Development Board (HDB) flat market — for sellers, at least.

With the HDB resale price record broken multiple times in the past three months, some questioned whether the government should be concerned.

Through a written parliamentary reply on Aug. 6, Minister for National Development Desmond Lee addressed a question from Member of Parliament (MP) Saktiandi Supaat, who asked how the government is working to keep flats affordable for Singaporeans.

Majority of resale flats still affordable

Lee shared that the government has implemented three rounds of cooling measures since December 2021 to temper housing demand.

"Today, the majority of resale flats remain within reach," Lee said in a written reply.

He pointed out that about eight in 10 first-timer families who collected the keys to their resale flats in 2023 could service their monthly loan instalments with Central Provident Fund (CPF) with "little to no cash outlay".

About one-third of high-priced resale flats are maisonettes and jumbo flats

"Resale transactions with high prices continue to make up a small minority of total resale transactions," Lee added.

About one-third of these are maisonettes and jumbo flats, which are "much larger than most flats" and are in limited supply.

Lee went on to reveal that more than 70 per cent of the remaining units are five-room flats with "very good locational attributes, high floors, and/or very long remaining leases".

High priced 4-room flats mostly located in 4 HDB estates

For dearer four-room and smaller flats, they are mostly located in four HDB estates in or very near to the city centre, Lee said.

He listed their "attractive attributes" that command higher prices, but stressed their minimal presence in the market, stating that they make up just 0.5 per cent of all four-room or smaller flats transacted in the last two years.

Lee said these flats are "very central" and are well-served by transport connectivity and comprehensive amenities.

More than half are also located on very high floors, above 30 storeys, and have good facing and views, he added.

Ramping up BTO flat supply

Lee also attributed the recent elevated resale HDB flat prices to the Covid-19 pandemic, which he said disrupted the Build-To-Order (BTO) building programme and "significantly impacted supply".

"At the same time, demand increased as more Singaporeans sought to move out to live on their own, a trend accentuated by the pandemic," he explained.

"These led to an imbalance in supply and demand, and resale prices increased."

To curb this surge in prices, the government has ramped up the supply of BTO flats and "remains on track" to offer 100,000 flats from 2021 to 2025.

Lee reminded the House that in 2023, HDB completed about 21,400 flats across 23 housing projects, making it "the highest number of projects and flats completed annually in the last six years".

This year, he added, they are on track to finish another 18,000 flats.

Shorter wait times

Those in more of a hurry to move out might be turned off by the longer waiting times of BTO flats.

As such, in 2023, the government committed to launching 2,000 to 3,000 Shorter Waiting Time (SWT) flats by 2025.

"HDB is now able to do this one year ahead of schedule and would have offered more than 2,800 SWT flats by the October 2024 BTO exercise," Lee announced.

Families that need temporary housing while awaiting the completion of their BTO flats can tap on the Parenthood Provisional Housing Scheme (PPHS) Voucher.

"No conclusive evidence" that PLH is the culprit

On whether the introduction of Prime Location Public Housing (PLH) in 2021 has driven up HDB resale prices in the towns with higher-priced resale flats, Lee said there has been "no conclusive evidence".

"That said, it has only been less than three years since the PLH model was launched, and it will be some years more before the first PLH flats enter the resale market, and we will continue to monitor closely," he caveated.

He added that there are safeguards to keep prices affordable even upon resale of PLH flats, such as a 10-year minimum occupation period and an income ceiling on resale buyers.

He concluded his reply by saying that housing policy is "complex".

"We should not expect housing prices to go up indefinitely.

History has taught us that the property market moves in cycles. In a time of market exuberance, prospective buyers should be extra careful, because those who buy high will also be harder hit when the market eventually comes down."

He also advised buyers to consider the wide variety of housing options available and exercise prudence in their flat purchases.

Top images via Unsplash