Excluding singles from future HDB flats in prime areas not a ‘step backwards’: Desmond Lee

• Excluding singles from purchasing future public housing flats in prime areas is not a step backward, said National Development Minister Desmond Lee
• Singles had the option of buying existing resale units, many in prime areas, he said
• He said it’s a new untested public housing model that will be launched with few units, which is why the Government is prioritising large households who need more space
• The Government would assess its impact and make adjustments along the way

SINGAPORE — Excluding singles from buying future public housing flats in prime areas is “not a step backward”, National Development Minister Desmond Lee said on Friday (Oct 29).

Instead, the Government is prioritising large households who may need more space for their families given that this new model of public housing — known as Prime Location Public Housing (PLH) — is untested and many units will not be launched initially.

Mr Lee said in a keynote speech at the 14th Singapore Economic Policy Forum: “Let us launch it, assess the impact of the current suite of measures in achieving our objectives, and gain experience operating the model, as we make adjustments and improvements along the way.

“In the meantime, singles can continue to buy existing resale flats, including many in prime central areas.” 

Under prevailing rules for the wider market, prices of existing resale flats have been on the rise in recent times amid a generally buoyant residential property market during the Covid-19 pandemic.

On Wednesday, the Ministry of National Development (MND) announced tighter criteria for Singaporeans looking to own new Housing and Development Board (HDB) flats to be built in prime locations such as the Greater Southern Waterfront and the city centre and towns surrounding it.

The first public housing project under this new scheme would be located at the Rochor Road district.

The minimum occupation period of these flats would be doubled from the present five to 10 years and its resale is limited to an eligible family nucleus, because MND said that this would reduce the risk of speculative demand and ensure that these flats are affordable to a wide range of buyers.

The exclusion of singles from getting PLH flats on the resale market even after the buyers have turned 35 years old has received considerable backlash. Petitions for the Government to reconsider the decision have already started circulating.

Prevailing rules do not place any limitations on singles above the age of 35 buying resale flats.

Addressing these concerns on Friday, Mr Lee said that the restrictions on singles flows from the Government’s current eligibility criteria for buying flats straight from HDB, known as Build-To-Order (BTO) flats.

Currently, singles are allowed to buy only two-room flats in non-mature estates at BTO sales exercises after they turn 35.

“We understand their concerns. Some Singaporeans remain single for reasons of their own, but may still want or need their own living space. They may wonder if we care about their housing needs," Mr Lee said.

“To these Singaporeans, let me assure you: We do. We recognise your needs, your aspirations. That’s why we’ve been expanding housing options and grants for singles over the years.”

He added that the tighter restrictions on eligible resale buyers are being put in place to prevent resale prices of PLH flats from skyrocketing.

“It is not our intention to exclude anyone from these prime locations. If land and resources were not a constraint, we would provide for all. But we also recognise that without some intervention, resale prices there would likely rise out of reach for many Singaporeans, thus excluding them, in practice,” he said.

Besides excluding singles, households earning more than S$14,000 are also not allowed to buy these flats on the resale market — the same criterion set for the initial BTO purchase. This income ceiling of S$14,000 encompasses more than eight in 10 resident households.

“We settled on the BTO eligibility criteria, as an objective set of means-tested conditions that Singaporeans are familiar with. They cover a broad range of Singaporean households,” Mr Lee said.

MINIMUM OCCUPATION PERIOD

With the minimum occupation period extended to 10 years for PLH flats, this means that homeowners would not be able to sell these flats until after they have lived there for 10 years.

Mr Lee said that he had received some feedback that it was too long, while others said that it was too short.

However, the Government believes that a longer-than-usual occupancy period was warranted to reduce speculative demand and ensure that potential buyers are looking to buy for the purpose of living in the flats.

“There is no magic number that works for all families in all situations,” he added. HDB, though, will consider homeowners appealing to sell their flat before the 10-year mark is up on a case-by-case basis.