Opening remarks by Minister Desmond Lee at the Forward Singapore Our Housing Conversation: Housing for Singles and Second-time Home Buyers

Jul 30, 2023


Good afternoon, everyone. Thank you for making time to participate in Our Housing Conversation, today.

We launched this series of conversations last year under Forward Singapore, and heard from more than 16,000 Singaporeans from all walks of life. Many shared that they were concerned with rising prices in the HDB resale and private housing markets. Some worry if they will be successful in their BTO application. These are all real and understandable concerns.

Progress on Housing

Let me start by giving you an update on the housing situation.

a. First, we have moved decisively but carefully on a few rounds of cooling measures. These are starting to moderate the market, although we may need more time to see their full impact.

b. We have also stepped up supply of both public and private housing. We have significantly increased the supply of public housing over the last three years. Since 2021, we have launched 50,000 new flats. And we are on track to launch the other 50,000 by 2025. The 100,000 flats that we will launch between 2021 and 2025 is not a small number: equivalent to around twice the number of HDB flats in Ang Mo Kio town today.

c. On the private housing front, we have also significantly raised supply. We have ramped up the Government Land Sales Programme for the third consecutive year, reaching a total Confirmed List supply of around 9,250 units for 2023, which is the highest in a decade. This, coupled with the recent rounds of cooling measures, will help to keep private property price momentum in check.

Our HDB colleagues and construction partners have been working hard to build our flats and hand over keys to homebuyers. In the first half of this year, HDB delivered 13,400 keys to our new flat homebuyers – this is double the number in the same period last year. HDB has caught up on 70% of delayed flats caused by COVID-19. Not an easy task as HDB is concurrently managing the large supply of new flats to be launched. HDB is now overseeing 92 construction projects all over Singapore, and this will grow to 150 projects in 2025. So, we will press on to complete flats and deliver keys.

There are signs that the property market is stabilising.  Overall private housing prices declined in 2Q2023, for the first time in 3 years. Public housing resale prices are also showing signs of moderation, with slower growth rate from 1Q2023 to 2Q2023, as compared to the average quarterly growth in 2022. These are signs that the market is calming. We will continue to monitor the market closely and will take whatever steps may be needed to ensure that the market doesn’t run ahead of fundamentals.

We also made moves to enhance affordability and accessibility of public housing.  We increased the CPF Housing Grant earlier this year, for First-Timers intending to purchase an HDB resale flat, both for families and singles. First-Timer Singles buying a resale flat, for example, can get up to $40,000 in CPF Housing Grant, up from $25,000 previously, Altogether, eligible First-timer Singles purchasing resale flat can get up to $95,000 in housing grants. 

We reviewed access to public housing to better support homebuyers. Last year, we made adjustments to the allocation quotas for our BTO exercises to better support First-Timers. The quota of 2-Room Flexi flats set aside for First-Timer Singles was also increased from 50% to 65%. For Second-Timers with urgent housing needs and require greater support from the Government for a second chance at owning a flat, we have schemes such as the ASSIST for second-timer divorced or widowed persons with young children, as well as the Third Child Priority Scheme for larger families with three or more children.

I know some Singaporeans are also concerned about the sharp increases in rental prices, which stayed broadly stable in the preceding few years. Prior to the pandemic, rents had stayed broadly stable, even a bit soft. COVID caused unprecedented disruption in the construction industry, global supply chains, and border controls. There was a strong demand for rental units as Singapore residents sought temporary accommodation while waiting for their homes to be completed. Furthermore, with the easing of border restrictions in 2022, non-resident rental demand quickly recovered.

The ramp-up in supply of new housing, coupled with the significant number of residential units that have been and will be completed, will ease the situation. In fact, rental rates are showing signs of stabilising.

a. In the private housing market, the increase in rent moderated significantly in 2Q 2023. This was the third consecutive quarter of moderation and was the smallest gain since 4Q 2021. For public housing, this was also the second consecutive quarter of moderation in the increase of rent.

b. 40,000 units across public and private developments will be completed this year. Between 2023 and 2025, 100,000 homes will be completed. This will add to rental supply and reduce rental demand as households temporarily renting will move into their new homes.

Overall, it has been a very rough 3 years since COVID-19 hit us, but we have made progress in stabilising the housing market and have now started to turn the corner. Thank you for supporting the construction sector, and for your patience, and understanding through these difficult times.

From Conversations to Change

Even as we tackle the current supply-demand imbalance, we also want to plan for the future, and partner Singaporeans to refresh our social compact. What are some things that people have told us?

a. First, home ownership continues to resonate strongly. While there were some who were prepared to rent, to give them flexibility in their life plans, the overwhelming preference was to be able buy their own home.

b. Second, owner-occupation. Although people accepted that some investment in residential property is needed to enable a rental market to exist, there was strong support among participants that housing, especially public housing, should principally be for people to live in. And they supported measures that enhanced the concept of owner-occupation.

c. Third, participants hoped that our housing market can continue to be more inclusive, so that people from different walks of life can afford housing arrangements.

d. Fourth, many participants recognized that Singapore has limited land and resources and hoped that we plan adequately not just for the current generation, but for the needs of future generations too.

These are important conversations that we must have, as we forge our new social compact on housing in our City-State. Already, the many insights and good suggestions that we have received from these conversations have led to some policy changes that have been made.

a. For instance, Singaporeans played a big part in designing the Prime Location Public Housing (PLH) model in 2021.

i. We wanted to enable Singaporeans from a wider spectrum of society, and not just the well-off, to live in prime, central parts of our island. So, this meant that we needed to provide additional subsidies for these flats to keep them affordable and accessible.

ii. At the same time, we wanted the system to be fair, and did not want those who were fortunate to buy a prime location flat to benefit from both greater subsidies as well as a windfall in future. So, for fairness and equity with other homebuyers who did not benefit from additional subsidies, we will recover a percentage of the resale price upon the sale of the prime flat.

iii. And finally, we wanted to ensure that these prime estates remain inclusive and affordable – not just for the first generation of buyers, but for future generations of Singaporeans who may buy these flats in the resale market. Therefore, we introduced much tighter resale conditions for these flats.

iv. Over the last few months, on occasion, I meet families who bought PLH flats. I ask them whether they understood the rationale for the various parameters that we put in, and they understood what it meant; why it had to be done that way.

b. But let me give you another example of how your feedback and those of other Singaporeans have helped us craft and shape policies that we’ve changed recently. We constantly face the challenge of prioritising a limited supply of BTO flats, given the fact that we have to meet the needs of a diverse range of buyers: There are First-Timers, Second-Timers, singles, young singles, older singles who are caregivers, there are seniors and other groups, each with their own circumstances and their own housing needs. So, we engaged Singaporeans about this during previous Housing Conversations.

i. In these earlier sessions, we adopted gamification: participants role-played HDB in deciding how to allocate HDB flats. Session after session, many participants agreed that young married couples and families with young children who were trying very hard to settle down and to buy their very first property – they felt that these Singaporeans had the most need to purchase their first flat. They felt that we should do more to help this group of young Singaporeans.

ii. And so, if you recall, earlier this year, we introduced the First-Timer (Parents and Married Couples), or FT(PMC). This category gives this group of buyers greater priority and better chances of being allocated an HDB flat. We announced it earlier this year, and come September launch, we will introduce this new category.

We are continuing these conversations to dive deeper into other buyer groups’ needs and aspirations.

Some interesting ideas have emerged from some of these earlier engagements. For example:

a. While homeownership aspirations were strong, some singles told us they may wish to rent for a start. Sometimes for flexibility, sometimes because of financial reasons. So, some ideas that participants have tossed up include some variant of “rent-to-own” models, as well as the possibility of buying flats sold with shorter leases.

b. Similarly, while singles desired privacy, they also wanted to be part of a community. Co-living, or more broadly, housing with shared communal facilities, was a model that some people suggested that we consider.

c. Some also discussed inter-generational housing – where the young and the old can interact and support one another in shared communal spaces, while maintaining their own private living spaces. This could take the form of intergeneration housemates, for instance, where the young and old share a unit, or intergeneration blocks or estates, where there is a good mix of Singaporeans across ages, with communal spaces to mingle and support one another.

d. For Second-Timers, many told us that their needs change as their life journeys evolve. Some may have started out with smaller homes as a couple, and now require larger homes to accommodate a growing family. While there are others, such as empty-nesters, who may wish to right-size to a smaller unit as their children move to their own homes. Some may require different flat types to allow multi-generational living, and yet others may require a second opportunity, when they fall on hard times and require stronger support to buy homes again and to get back into home ownership.

Some ideas that we’ll hear today may be relevant for us in the here and now, while others could be things we consider for the future. Today’s session is a good opportunity for us to build on the ideas that other groups have given to us, and help us come up with fresh insights and suggestions as we continue to hone various policy ideas.

Forward Planning

But rest assured that our conversations will continue even beyond ForwardSG. Because society continues to evolve, the social compact must continue to evolve and change likewise. Hence public housing policies or housing policies in general, need to continue to be responsive to Singaporeans.

Now, to give you an example, some of you may have heard of the Draft Master Plan Review by URA that will be launched later this year. In fact, last year we did the Long-Term Plan Review. Every 10 years we pause, we take stock and try to look 50 years into the future. Because we are a city-state and because of our land and resource constraints and, in future, our carbon constraints too, we have to continuously plan long into the future. We don’t have the luxury of larger countries; because you have a lot of land, resources, you don’t need to plan so far ahead, even if you wanted to.  For us, we have to, because any change that we need to make will take a long time to come into fruition.

a. This year, we will embark on the Master Plan. The Master Plan will provide detailed land use and developmental plans for the whole of Singapore. It builds upon the Long-Term Plan that we developed last year. Go back, if you can, and read the report – it’s a very readable report on the URA website, on the concepts that are embodied in the 50-year plan of Singapore, in terms of how we live, how we commute, how we protect the environment, how we protect heritage and nature, so on and so forth.

b. And in our Master Plan review, housing will be an important focus area. As we plan new towns and rejuvenate older estates, we ensure that there will be a range of housing options to meet and balance the diverse needs of Singaporeans.

c. The ideas that will be heard during the Master Plan review will eventually culminate in URA’s presentation of the next Draft Master Plan. Please join us when the Draft Master Plan opens for public feedback and share all your feedback and ideas with us.

For now, I hope I’ve given you a sense of what impacted us during COVID, what we’ve been doing to tackle the supply-demand imbalance, the difficult choices we’ve had to make, the tremendous ramp-up in supply, and the way in which we balance the decisiveness and firmness in our measures with the need to take great care, because of the economic climate and not to overreact and cause severe impact on the property market in the opposite direction.  So we have to balance our measures very carefully.

I hope I’ve shared with you where the property market is so far, the progress we’re making, what more we need to look forward to. I also shared with you some of the changes that have been made as a result of your input over the last year. And I also shared some ideas that different groups of singles and Second-Timers have shared with us, so that today we’re not just discussing things in abstract. Those were some specific ideas that people have crystallised over the last few sessions. Comment on them, help us to shape them, tell us whether you welcome them or not, bearing in mind that Singapore is bounded by tight land, resource and carbon constraints. We are the only sovereign city state in the world, at 728 square kilometres. And with those limited resources, to fulfill the aspirations of Singaporeans, both today and tomorrow, requires us to have a social compact and understanding between Government and people. 

So with that, let us have a good session and look forward to hearing your ideas later on. Thank you.