Keeping Public Housing Affordable in Singapore: What the Government is Doing to Help

In recent months, Singapore has seen some record-breaking prices for HDB resale flats. This has caused many Singaporeans to worry about whether public housing is still affordable. But don’t worry! The government is on it, and they’re working hard to make sure that everyone can still afford a home. Here’s a look at what’s going on and how the government is stepping in to help.

Why Are HDB Resale Prices So High?

First, let’s understand why the prices have gone up. The COVID-19 pandemic caused big delays in building new flats. Because of this, fewer new flats were available. At the same time, more people wanted to move out and get their own homes. This includes young couples, singles, and even people in their 30s who are getting married. With more people looking for homes and fewer new flats being built, prices naturally went up.

How the Government Is Ramping Up Supply

To fix this, the government is building a lot more flats. They aim to offer 100,000 new flats from 2021 to 2025. In 2023 alone, they finished building about 21,400 flats, which is the most in six years! And in 2024, they plan to complete another 18,000 flats. They’re also speeding up the process for Shorter Waiting Time (SWT) flats, offering more than 2,800 of these by October 2024, a year ahead of schedule.

Cooling Measures to Keep Prices in Check

The government has also introduced several measures to cool down the housing market. Since December 2021, they’ve raised the Additional Buyer’s Stamp Duty (ABSD) rates, tightened the Total Debt Servicing Ratio (TDSR) threshold, and lowered the Loan-to-Value (LTV) limit for HDB loans. These measures help make sure that people don’t take on more debt than they can handle, especially with interest rates going up.

Help for First-Time Homebuyers

For those buying their first home, the government has increased the Central Provident Fund (CPF) Housing Grant. This grant has helped many first-time buyers cover their loan payments with little or no cash outlay. About eight in ten first-timer families who got the keys to their resale flats in 2023 could pay their monthly loan installments using their CPF.

The government also provides significant discounts for new Build-To-Order (BTO) flats, making them cheaper than similar flats on the market. For resale flats, eligible first-time buyers can get housing grants of up to S$160,000. This keeps these flats within reach for many Singaporeans.

Prime Location Public Housing (PLH) Model

The Prime Location Public Housing (PLH) model helps keep flats in prime areas affordable. It offers extra subsidies and has stricter rules, like a 10-year minimum stay and an income ceiling for buyers. Although it’s still early to see the full impact, the government is watching closely to make sure it doesn’t drive up prices too much.

Looking Ahead

Minister Desmond Lee has assured everyone that the government is keeping a close eye on the housing market. They’re ready to make more changes if needed to ensure stability and affordability. With the global economy and interest rates being unpredictable, they’re prepared to act decisively but carefully.

Conclusion

In conclusion, the government is taking many steps to keep public housing affordable for all Singaporeans. They’re building more flats, introducing cooling measures, and providing financial support for first-time buyers. While the market has its ups and downs, the government’s commitment to affordable housing remains strong. So, if you’re looking to buy a home, know that help is available, and the government is working hard to make sure you can find a place you love at a price you can afford.

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