Speech by Mr Desmond Lee at MyNiceHome Dialogue at NUS
Mar 26, 2025
I am glad to be back at NUS. Over the years, I have been back to speak at NUS on various topics, from nature conservation to urban planning, and today, on housing.
Some of you may already be thinking of buying a home or starting a family after graduation or shortly after that. Or you may be planning for your housing options after you start working. Some of you may find the idea of buying your first HDB flat daunting. Don’t worry, we will support you every step of the way. That is why we organise MyNiceHome dialogue sessions at various campuses across Singapore, and this is in order to help you in your housing journey. Let me share on MND’s two “A”s of public housing – “Accessibility”, and “Affordability”.
Keeping public housing accessible
Let me start with the first – Accessibility. When you think about accessibility, it means addressing questions like “can I get an HDB flat?”, “can I successfully ballot and book for one?”. You may also worry about how long you have to wait before you get your keys.
We keep public housing accessible for first-timers by setting aside the vast majority of Build-To-Orde r(BTO) flats for you. We also have priority schemes to ensure that those with greater needs are prioritised in the BTO queue. For example, if you have ROM’d, are already married, or have children, and are buying your very first home, we give you priority under the First Timer (Parents & Married Couples), or FT(PMC) priority. When you apply for a flat and you fall under this category, you get priority. For instance, if you apply for a 4-room or smaller Standard BTO flat, you receive first priority.
This is a new priority scheme, but so far we have seen positive outcomes. Virtually all applicants in this category were given the chance to book a flat within two tries in categories where they are given priority.
In fact, I met a young couple some time back. They told me that they had been going steady for some years and were ready to settle down, but wondered if they will be able to ballot for a flat. They said they were going to ROM as soon as they successfully booked a flat, and then hold the customary ceremony a little later. So, I suggested to them: since they were already so ‘steady’, why not consider flipping the order the around – ROM first, book under this new FT(PMC) category with higher priority, and then do their customary marriage after booking their flat. They discussed with each other and their parents and went ahead. They’ve successfully booked their flat and the husband came by the other day to share this with me.
Some of you may ask, what if I have already found my future spouse and want to settle down early, but I do not have enough savings to pay for the downpayment yet? Today, we have two key schemes in place that may be helpful.
First is what we called the Staggered Downpayment Scheme (SDS). For those taking an HDB housing loan, this halves the initial downpayment needed when you first book your flat from 10% to 5% of the flat price. For a 4-room BTO flat in Jurong East that costs $400,000, you will pay $20,000 under the SDS, instead of $40,000.
Second, we have the Deferred Income Assessment (DIA). This is currently available to young couples who are both studying or serving National Service (NS) or were doing so recently. If you are in this group, you would probably not have accumulated much savings yet, so we will help you to book a flat with a further reduced initial downpayment of 2.5%. Using the earlier example I mentioned, the downpayment will drop from $20,000 to $10,000. In addition, what we do under this scheme is that we can defer the assessment of income for both housing grants and HDB housing loan till nearer the date of key collection, which will be a few years down the road, when your incomes are more stable, and probably higher.
Both the Staggered Downpayment Scheme (SDS) and Deferred Income Assessment scheme have been well received by young couples, with the majority of eligible first-timers taking up at least one of these schemes. However, we have also received feedback from young Singaporeans like yourselves, that there are often situations where one person has started work after graduation, maybe even having worked for a few years, but the fiancé may still be studying or serving NS. But because this is a single-income couple at the point when they want to book a flat, they may not qualify for a sufficiently large housing loan to afford a flat they are looking for, and they may have difficulty paying the initial downpayment.
We would like to help such young couples settle down earlier too. We will therefore make a change this year. From July onwards, when we have the next BTO launch, we will expand the Deferred Income Assessment scheme (DIA) to cover young couples where only one party is a full-time student or National Serviceman.
Take for example a couple where one party has worked for about a year, earning $3,500 a month. Her partner is still studying. Today, they can take an HDB housing loan of about $200,000, if they wish to service their loan entirely using CPF. They will also qualify for an Enhanced CPF Housing Grant (EHG) of $90,000. This places a 3-room BTO flat in Yishun at $265,000 within their budget. Under the Staggered Downpayment Scheme (SDS), their initial downpayment is reduced from 10% to 5%, at about $13,000.
However, the 3-room flat might be a bit small if they plan to have many children. Some may think that a 4-room flat is more ideal. With the expansion of DIA, the couple can put in their BTO application first, and their HDB housing loan and EHG assessment will be deferred for the time that the flat is being constructed, say around 3 years, and then have it assessed nearer to key collection. At that point, both parties would have started work. With a combined income of say $7,500, they will qualify for a sufficient loan to buy their 4 or 5-room BTO flat. So, take an example, for a 5-room BTO flat in Yishun at $500,000 before grants, as they are taking up DIA, their initial downpayment is also further reduced from 5% to 2.5%, or $25,000 to $12,500.
The same logic applies for those who think a 3-room flat is sufficient for their needs, but perhaps prefer to purchase a flat nearer to town, or amenities, which are usually a more expensive, because of location or amenities.
This expansion will benefit not just university graduates, but a wide range of young couples, including those serving NS after graduating from our polytechnics and ITEs.
Each young couple’s life journey is different. Regardless of which path you take, if you are looking to settle down early, you want to book your flat early. And when you graduate or finish NS and it is time for key collection, through these schemes, we hope to support you in achieving your housing aspirations.
However, some of you may ask, what good are these schemes, if there are not enough BTO flats to go around, if it is so hard to book one? Or if I have to wait 5 years for my BTO flat? I would like to assure you that we will continue to ensure an adequate supply of housing. We have overcome the construction crisis during Covid. We have ramped up supply significantly and cut down waiting times.
We are on track to exceed our commitment to launch 100,000 BTO flats from 2021 to 2025. This is the equivalent to launching two Ang Mo Kio towns worth of HDB flats in less than 5 years, despite the disruption that the pandemic caused.
We have also shortened the median waiting time for BTO flats to less than 4 years, and this is comparable to where we were, before Covid struck us.
We have also committed to building Shorter Waiting Time (or SWT) flats. For background, we started doing this in 2018, before Covid. When Covid struck, we had to sacrifice these flats and launch them as ordinary flats. We had committed to launching 2,000 to 3,000 of such Shorter Waiting Time flats each year, and these Shorter Waiting Time flats are flats with a waiting time of two plus years.
As a result of the ramp-up and the launch of SWT flats again after the pandemic, application rates for first-timers have come down.
In fact, BTO application rates for first-timer households have stabilised to below pre-COVID levels, from 3.7 times in 2019, before Covid, to 1.5 times in the February 2025 BTO exercise.
We will continue to maintain a strong housing supply, to meet more Singaporeans’ needs on the housing front. I also earlier shared during Budget session that from 2025 to 2027, we will launch more than 50,000 BTO flats.
During the same period, we will also increase the SWT flat supply to 12,000 flats. This is more than what we launched over the last 5 years, all combined together.
With the large increase in supply, we do want to better support the aspirations of more than just first-timer families. We are not quite ready to do so, but we acknowledge and understand the calls to lower the eligibility age for singles, as well as the aspirations of other groups of Singaporeans. We will continue to work hard, and this is something that we will study and review carefully. Notwithstanding, we have been able to support singles who do meet the eligibility age, and want to live with or near their parents.
Last year, with the new flat classification, singles can now buy 2-room flexi flats island-wide, allowing them to stay near their parents who live in what was formerly mature estates. In the past, singles could only buy in non-mature estates, which would be what we used to think as estates being further away from town centres or less well-developed. As of last year, singles can now buy Prime, Plus, Standard 2-room Flexi flats.
Later this year, the new Family Care Scheme or FCS, will give eligible singles priority access when they apply for new flats to live with or near their parents, and vice versa. In the past, this priority scheme will apply to married couples. Now we are extending the priority to those who are single too as some of them may well be caregivers.
Through these efforts, we will ensure there continues to be an adequate supply of housing for Singaporeans.
Keeping public housing affordable
The other “A” is affordability. Some of you may feel anxious after reading news articles about resale flats selling for more than a million dollars. I want to assure you that there is a wide range of affordable housing for different housing budgets, for both BTO flats, which are new flats built, sold and priced by HDB, as well as resale flats, which you buy from an existing owner in the open market.
One of the key ways to ensure affordability is by pricing our BTO flats for affordability with significant market discounts, even before we apply the grants that are means-tested. Looking at our recent February BTO launch, the typical selling prices of 4-room flats would be around $350,000 to $650,000, depending on project, level, as well as location. Last year, the median starting salary for graduates was about $4,500. After working for a few years, for a couple with combined income of $9,000, all these projects are within reach with little to no cash outlay for the monthly loan instalment, which means, you pay almost exclusively using your CPF.
In that same launch, a large number of flats are found in very attractive locations such as Tanjong Rhu and Queenstown. These flats will naturally fetch a higher price because of location and amenities. So how do we keep them affordable for first-timers? We do so through a major change that we made recently, which is the new flat classification framework, or Standard, Plus, and Prime flats.
Let’s look at Tanjong Rhu Parc Front, a Prime BTO project. It is a very attractive project, near the city centre and a short distance from the riverfront. Comparable resale flats in the area would cost more than $900,000. For this flat, we first apply a generous market discount to comparable resale HDB prices, and because it’s a Prime project, we further layer on additional subsidies. After this, a 4-room BTO Prime flat in that project costs around $640,000, before grants.
What does this mean for young buyers like yourselves? For a couple with a combined income of $10,000, you can afford the 4-room Tanjong Rhu Prime flat with zero cash outlay on your monthly housing instalments. Even for a couple with a combined income of $8,000, you will receive an EHG of $20,000, which can be used to pay the initial downpayment, and you will be able to pay your mortgage with a modest cash outlay of about $340 a month.
Beyond the additional subsidies, the new flat classification framework also seeks to limit the lottery effect and be fairer to buyers who did not receive additional subsidies. Tighter restrictions are in place for Plus and Prime flats, such as a longer Minimum Occupation Period (MOP), a subsidy recovery upon first resale, as well as tighter conditions on your ability to rent out the whole flat or who you can sell to when you decide to resell it in the open market subsequently. These restrictions reinforce owner-occupation in public housing, reduce the investment value or investment mindset when buying a BTO flat, and thereby limit speculative gains, or the lottery effect.
This is what we mean when we say that we will seek to ensure a wide range of affordable housing for Singaporeans with different housing budgets, while doing so in a manner that is fair, and inclusive.
Conclusion
What I have covered today reflects our commitment to support Singaporeans every step of the way in their housing journeys, bearing in mind the two “A”s of public housing – “Accessibility” and “Affordability”. We will continue to update our policies and schemes to support Singaporeans of all walks of life, at different stages of their life journeys. We will keep striving to do better, to give you a home that is endearing and a future to look forward to.