Last week during the Parliament debate on the President’s address,
PM Lee pledged that housing will remain affordable for
Singaporeans.
He then gave a recap of the progress made on that hot-button issue
since 2011. In the last three years, 52,000 flats have been built,
the equivalent of two Clementi new towns, he said.
The amount of subsidies given out for flats has almost doubled.
“And the situation is now under control, as many MPs have
acknowledged,” he said.
He also praised the good job done by National Development Minister
Khaw Boon Wan, to the applause from the House.
But Singaporeans are still focused on housing, PM Lee noted.
On May Day, he met some unionists from the pioneer generation, who
reminisced about buying three-room flats for just $6,800 on a
salary of $300. That is, these 3-room flats were bought at
about 1.9 times of the household’s
annual salary.
The children of the pioneer generation are still worried about
housing prices.
“So I explained what I have explained so many times before – how we
are keeping flats affordable for their children’s generation as
well,” PM Lee tried to assure.
Home ownership is not just about providing shelter, but giving
everyone a stake in the country and boosting the assets of
lower-income Singaporeans, he said.
He also talked about the government providing “generous grants” for
households to buy HDB flats.
“Where for $1,000 income, you can start to buy an HDB flat and have
a substantial nest egg for your retirement, with the help of this
Government?” PM Lee asked.
Khaw’s promises
So, what is the current definition of “affordable housing” by the
government?
In Parliament March 2013 [Link], Minister Khaw said more would be done to
reduce BTO flat prices relative to income, and to reduce the
financial burden of housing on the young:
We have stopped
BTO prices from rising by delinking them from resale prices. We can
now pause and see what else we can do to bring BTO prices in
non-mature estates to, say, around 4 years of (annual)
salary as it was before the current property cycle
started.
One thing is
clear. We are committed to restoring and maintaining the
affordability of new HDB flats to the vast majority of first-timer
Singaporean households. Their Singapore Dream of owning their own
flats, like their parents’, is safe. We will make sure of that.
Note that Mr Khaw used the term “restoring” the affordability of
new HDB flats and note that he avoided talking about resale flat
prices and preferred to focus on new BTO HDB flats.
TRE then examined the latest BTO launches [Link] to see if the government has fulfilled its
promise of restoring BTO prices in non-mature estates to
around 4 years of annual salary(‘Latest
HDB BTO still not affordable as promised‘).
In the latest May BTO launches in Marsiling, for example, we
see:
Typical 2-room
(I) @ Marsiling Greenview:
Nett selling price less grants = $35,000
Applicants’ median monthly household income = $1,700
Price to annual household income = 1.7
Typical 2-room
(II) @ Marsiling Greenview:
Nett selling price less grants = $55,000
Applicants’ median monthly household income = $1,700
Price to annual household income = 2.7
Typical 3-room
@ Marsiling Greenview:
Nett selling price less grants = $125,000
Applicants’ median monthly household income = $2,600
Price to annual household income = 4.0
Typical 4-room
@ Marsiling Greenview:
Nett selling price less grants = $240,000
Applicants’ median monthly household income = $4,400
Price to annual household income = 4.5
Typical 5-room
@ Marsiling Greenview:
Nett selling price less grants = $350,000
Applicants’ median monthly household income = $5,800
Price to annual household income = 5.0
Typical 3Gen @
Marsiling Greenview:
Nett selling price less grants = $355,000
Applicants’ median monthly household income = $5,800
Price to annual household income = 5.1
From the above calculations, except for 2-room and 3-room flats,
the BTO prices for 4-room and above in these launches are still way
above 4 years of annual salary.
One can only conclude that the government has yet to fulfill its
pledge to bring down ALL the BTO prices
in non-mature estates to around 4 years of annual
salary, especially for first-timer Singaporean
households.
The
midle-income group is especially hard-hit.