PM Wong on housing: 'I wish I can wave a magic wand & produce instant flats. But it takes time.'

The government is trying to catch up with the supply disruption for Build-To-Order (BTO) flats due to the Covid-19 pandemic, Prime Minister Lawrence Wong said on Jan. 21.

Speaking at a youth dialogue at the National University of Singapore (NUS) with about 900 participants on Jan. 21, PM Wong said: "I wish I can wave a magic wand and overnight, produce instant flats. (But) I can't. You have to identify land, prepare the land, then you have to get your construction workers (to) build, and it takes time."

The government must, therefore, make sure it is able to meet demand if it makes any moves on housing policy, he added.

Govt aware of concerns of couples, such as the income ceiling

PM Wong was responding to a question by a student about raising the monthly income ceiling for families that are eligible to purchase a Housing and Development Board (HDB) flat.

Currently, the income ceiling for first-time buyers of HDB BTO flats is S$14,000.

The prime minister pointed out that if the income ceiling is increased and more demand comes, the government might "disappoint" the public as there is a physical limit to how many new flats can be built.

PM Wong added that the government was aware of such concerns, in light of higher starting salaries and people getting married later, which makes it easier to exceed the income ceiling.

While this does not mean the government is going to move the income ceiling at the moment, the government will see what it can do.

"I hope you understand we have some constraints," PM Wong said.

The prime minister added that HDB will continue to price new flats according to income and not the resale market to ensure affordability of public housing.

Previously, in September 2024, Minister for National Development (MND) Desmond Lee said there are no plans to raise the S$14,000 income ceiling for first-time buyers of HDB BTO flats.

At that time, Lee explained:

"The income ceiling ensures that the limited supply of new flats and significant subsidies that come with such flats are prioritised for those who need them more, such as lower- to middle-higher income families."

He added that the current income ceiling covers about eight in 10 Singaporean households.

BTO application rates are coming down

In response to another question raised by a student about high application rates for BTO flats and the amount of money required to make payment upfront for a flat in cash and from one's Central Provident Fund (CPF), PM Wong replied that on the supply side, the government has been "very consistently" putting up a lot of land for the development of BTO flats.

However, this takes time as the building of the flats takes about four to five years to complete.

PM Wong said: "HDB has been going full steam. The supply is there and will increasingly start to help stabilise the market. But these things will take time."

In addition, as the government is putting out so many new flats, the success rates for getting a new flat is higher now and many applicants are able to obtain one within two or three tries.

He acknowledged that this might not be the case for flats with "attractive attributes", which have high application rates and often result in a ballot.

"But if you are prepared to look around at different options, many are able to get flats within two or three tries," he added.

80% of people who buy HDBs today can use their CPF with little to no cash

As for the payment of new flats, the prime minister highlighted that about 80 per cent of people buying BTO flats today can use their CPF to buy their flats and service their housing loan with "very little or zero" cash.

"That's a result of HDB pricing BTO flats to make sure that the vast majority of Singaporeans can still afford them," he added.

As for the resale market, PM Wong acknowledged that it was on the high side.

He said:

"But again, you got to appreciate that that's because we came out of Covid, where there was a supply disruption and we were not able to build sufficient flats, because the entire construction industry was severely impacted."

Since then, the government has been building as much as it can, PM Wong added.

What else did PM Wong talk about at the dialogue?

Top by Terence Tan from MDDI