Closing Remarks by Minister Desmond Lee at Reach x Forward Singapore Conversations (Mandarin Session)
Oct 17, 2022
Ladies and Gentlemen, good evening.
I would like to thank everyone for taking the time to join us tonight.
You would have noticed that today’s engagement process is quite different from some of our previous engagement. We wanted to create a space and opportunity where YOU, the citizens, get to raise the topics that are important to you, that you want to talk about; and sometimes, for the Government.
This is the spirit of the Forward Singapore exercise, where Singaporeans with different views can come together to better understand one another and come to a consensus on how our society can best move forward.
Tonight we discussed a number of issues, and some participants had raised issues about public housing and the property market.
Public housing is a topic where many have differing views, so MND had recently conducted a few sessions similar to this, to hear the views of Singaporeans. Some of them were concerned about whether their children will be able to afford flats. Some of you may have the same worry.
Let me share how we price our BTO flats. First, HDB establishes the market value of new flats by looking at the prices of comparable resale flats nearby, adopting valuation principles. After doing so, HDB makes adjustments for individual flat attributes and prevailing market conditions, and then applies a significant subsidy to derive the selling prices, which are below market value. We then add on specific housing grants, and this helps to ensure that new flats are affordable to those buying their first home.
Although BTO flats are highly subsidised, some BTO flats with attractive locational attributes will naturally have a higher price point.
For instance, new flats being sold in the latest project in Ang Mo Kio are priced higher than the flats of similar size in the Choa Chu Kang project launched in August. This is because the AMK project is in the Town Centre, nearer to the city, and is close to MRT, bus interchange, market, hawker centre, polyclinic, library and shopping malls.
Our offering of BTO flats with different attributes, price points, locations and different levels of housing grants allow us to serve the needs and budgets of a diverse group of flat buyers. So we do not price our BTO flats just for median-income households, but also make a point to build flats that are priced affordably for people in the lower income segments.
For instance, in August this year, we launched 3-room BTO flats in Jurong East which cost between $194,000 and $245,000. A first-timer couple with a household monthly income of $3,000, which is between the 10th & 20th percentile of resident household income, should be able to pay the monthly instalments of such a flat without cash outlay, and using CPF.
We also launched 4-room BTO flats in Woodlands in August this year. The flats, which are right beside the Woodlands South MRT station, cost between $303,000 to $363,000. A first-timer couple with a household monthly income of $5,000, which is nearly at the 30th percentile of resident household income, will be able to pay the monthly instalments using CPF, without cash outlay.
Moving on to the HDB resale market, we provide grants of up to $160,000 for first-timers. You may have seen eye-catching headlines of million-dollar flats being sold. Actually, the number of resale flats sold at $1 million dollars or more only make up about 1% of all resale transactions. Most of them were 5-room or larger flats, with unique attributes such as lofts and maisonettes. Nevertheless, we recognise that there are concerns about rising resale prices, and we have therefore moved recently to moderate demand in the HDB resale market.
Some of you may worry about whether your children can successfully ballot for a flat. Actually, almost all first timer households were invited to book a BTO flat in the non-mature estates within three tries. In fact, 90% of first-time households were successful within two tries. Nevertheless, to meet the strong demand for housing, we are ramping up the supply of BTO flats. We are prepared to launch up to 100,000 new flats from 2021 to 2025, if needed.
Besides housing, there are many other important topics you may be concerned about. The topics that many of you have raised today show that the challenges we face ahead are complex. They cannot be solved by one party or one group, but it would require all of us across society, playing different roles and holding different responsibilities, to make our home a better one. Collectively, we can write a better Singapore story together.
MND will also be setting up roadshows across Singapore with interactive elements for people to give their views on public housing. We want as many people to be part of this process as possible, so I hope you can spread the word to your family and friends.
Thank you.