Affordability of HDB flats have improved, says DPM Wong in Budget 2024

SINGAPORE: Over the last 10 years, the average price of a four-room BTO flat in non-mature estates has remained relatively stable, even with rising median household incomes, according to Deputy Prime Minister and Finance Minister Lawrence Wong.

He emphasized that, in real terms, the affordability of these flats has improved.

Despite concerns, particularly among the younger generation, about the affordability of public housing for achieving home ownership, DPM Wong defended the accessibility of owning a house in his Budget 2024 wrap-up speech on Wednesday (28 February).

“The challenge we faced was with the prices of BTO flats in choicer locations, which are more expensive, ” he explained

To address the issue, the government earlier introduced a new Standard, Plus and Prime framework. The framework aims to keep the BTO flats in these better locations affordable through more upfront subsidies.

“but it will be a fair system because the additional subsidies will be clawed back when the first owners sell the flats, ” added DPM Wong.

WP MP raises alarming concerns on housing affordability

Earlier, during his budget speech on Tuesday, Mr Muhamad Faisal Bin Abdul Manap, Workers’ Party MP for Aljunied GRC, highlighted two primary concerns, particularly for young Singaporeans from low-income households: affordability and availability.

He pointed out that the support of underemployment and savings packages is capped at S$30,000, resulting in challenges for households trying to purchase their own homes.

“If we assume a 50/50 split in the amounts a household receives for each section, the maximum amount a household receives for purchasing their own home is $15,000. ”

“After including the grants, the price of a three-room flat in the February 2024 launch of BTO projects ranges between $127,000 and $172,000. Assuming the household successfully applies for a housing loan, the downpayment involved would range between $25,400 and $34,400. ”

Mr Manap highlighted that this insufficient support makes it challenging for families, especially those with children, to save for their homes due to immediate daily needs.

Furthermore, he addressed the extended wait times for BTO units, affecting both middle-income and lower-income families.

For lower-income families with children, the living environments in rental flats may not be conducive for young children, impacting their development.

Mr Manap suggested a more proactive approach, such as prioritizing households ready to purchase their own homes in Sales of Balance Flats exercises or providing assistance in purchasing resale flats at subsidized prices.