Commentary: Why singles should cheer NDR 2023's housing policy changes

During the National Day Rally on Sunday (Aug 20), Prime Minister Lee Hsien Loong announced significant changes to long-standing housing policies.

First, new Housing and Development Board (HDB) flats will no longer be classified as being in mature or non-mature estates.

Instead, they will be referred to as "standard", "plus" and "prime" flats, with an ascending amount of subsidies and resale restrictions.

Second, singles will be able to buy new two-room flats across all three housing types, instead of the current restriction which means they can purchase only from non-mature estates.

They will also be able to buy resale flats across all three categories, though their choice of prime units will again be restricted to two-room flats.  

What do these changes mean for singles and what are the implications for the housing market?

Singles have long called for greater access to the public housing market. At one time, they couldn't buy any HDB flat.

This changed in 1991 when the Government introduced a Single Singapore Citizen Scheme where singles aged 35 and above were allowed to buy a three-room and smaller resale flats in selected locations.

Housing policies however were still heavily skewed towards families, as they were eligible for grants and had wider choices.

Between 1991 and 2013, HDB fine-tuned its policies by extending Central Provident Fund (CPF) Housing Grants to singles and allowing them to buy almost any resale HDB flat in any location.

The one exception is a fairly new type of property known as a three-generation flat, which offer more space to accommodate three generations of a family.

It was only in 2013 that singles were allowed to purchase a new Build-to-Order (BTO) flats direct from the HDB.

Application rates for two-room flats by singles shot through the roof in 2013, ranging between 7.2 and 172.4 per available unit, reflecting the strong pent-up demand.

The demand started to taper off in 2014 with application rates easing to between 4.7 and 41.2. Before the pandemic struck, the application rate was between 0.9 and 5.1 in 2019.

When Covid-19 caused delays to the completion of BTO flats, many buyers including singles brought forward their plans to buy a flat in view of the longer waiting time.

This pushed up the application rates among singles to between 1.9 and 16 in 2021 and 2022.

Overall, it is clear that there is strong demand for new flats by singles.

With the new housing classifications, the central region will be made up of mostly prime and plus flats while the other regions (east, west, north and orth-east) will be made up of standard and some plus flats.

With the reclassification, HDB could have continued with the existing housing policy of limiting singles to two-room flexi flats outside the central region. But that would not be seen as fair and inclusive.

The Government thus took the bold approach by allowing singles to apply for two-room flexi flats across standard, plus and prime flats.

This move is fair and inclusive and accepts that being single is a choice and there should not be differentiated policies.

After all, singles have become an integral part of society and are actively contributing to the economy and society.

Furthermore, according to the Department of Statistics Singapore, the number of single-person households with the resident aged 35 and above has increased eightfold from 23,800 in 1990 to 193,500 in 2022.

The launch of the Forward Singapore exercise saw many Singaporeans stepping forward to offer their views on housing in the future and a new social compact.

According to Forward Singapore, some cherished common values that Singaporeans hold dear are fairness, inclusiveness, and giving back.

One could further argue that the move to allow singles to buy new prime flats is part of the new social compact in Singapore.

The 2013 experience would suggest that the demand from singles buying prime flats from the second half of 2024 is likely to be high initially following the change as everyone wants the choicest location.

However, demand will stabilise over time.

Part of this initial surge in demand can be met with the units not selected by first-timer families.

While the immediate response on the ground from most singles towards the move to allow them to buy new Prime flats was that of happiness, one immediate feedback was why are singles still restricted to two-room flats.

Why are they unable to buy larger BTO flats?

The pushback is understandable as some may desire to have more space, especially after the pandemic. However, singles may be missing a point here.

Depending on the type of two-room flats, a single will enjoy between 36 and 48 sqm of space.

By comparison, a couple with no children applying for a typical 90 sqm four-room flat will have on average 45 sqm of space each.

If the couple has two children, the average space drops to 22.5 sqm. Furthermore, in land scarce Singapore, there is a need to strike a balance between the needs of singles and families.

If singles do want more space, they can turn to the resale market which offers them choices up to an executive apartment or maisonette, which can be more than 180 sqm.

This brings me to the new policies for singles buying resale flats across the standard, plus and prime types.

When the Government introduced the Prime Location Housing (PLH) model in November 2021 for selected BTO projects in mature estates, the strict restrictions meant singles were excluded from purchasing them in the resale market.

This created a fair bit of unhappiness among singles as they had been allowed to buy resale HDB flats in any location.

So quite understandably, some singles may view the PLH resale policy as not inclusive and unfair.

Now, they will be allowed to buy resale prime flats, albeit only two-room ones.

Nevertheless, it is a good change and will be a boon to singles who have caregiving responsibilities and need to be near their parents.

It should be well-noted that changes to housing policies be they for singles or families have come about gradually.

Singles should take heart that their voices have been heard and remember that no policy is cast in stone and will evolve with a changing housing landscape.

ABOUT THE AUTHOR:

Lee Sze Teck is senior director for data analytics at Huttons Asia.