DPM Lawrence Wong discusses the affordability of public housing and shares insights on the government’s plans to address supply shortages.
SINGAPORE: Deputy Prime Minister and Finance Minister Lawrence Wong took a light-hearted yet insightful approach to Singapore’s rising property prices in a speech earlier this week, remarking that, perhaps only partially in jest, “in Singapore, the Prime Minister has to be a real estate agent.”
Mr Wong, who has been widely speculated to be the successor to Prime Minister Lee Hsien Loong, reflected on Singapore’s public housing and the challenges posed by soaring property prices. As co-chair of the ministerial task force tackling the Covid-19 pandemic, Mr Wong emphasized the government’s ongoing efforts to ensure affordable housing for Singaporeans.
“We’ve created the world’s best public housing. You go anywhere in the world, name me any country that has the same quality of public housing that we do – there is none,” he said in his May Day speech, reaffirming his commitment to providing affordable and high-quality public housing.
Despite this, property prices in Singapore have continued to rise for 12 consecutive quarters, while the global housing market has seen a slowdown. This rising cost of housing has been a point of concern for many, discussed in detail during parliamentary debates earlier this year.
Mr Wong acknowledged the difficulty in keeping up with the demand for Built-to-Order (BTO) flats, particularly given the delays caused by the Covid-19 pandemic. He assured the public that the government is working to address the backlog and is on track to complete 20,000 units this year.
Addressing concerns raised by a union leader about the affordability of future housing, Mr Wong shared a light-hearted comment: “In Singapore, the Prime Minister has to be a real estate agent, so I’m learning and brushing up my skills, and I will use this occasion to practise.”
Mr Wong went on to clarify that in evaluating the affordability of public housing, Singaporeans should look beyond the headline price of BTO flats and consider the relationship between the price and household income, as well as the proportion of income required to service the loan.
He compared the cost of a four-room BTO flat in the 1980s, which was priced at $40,000, to today’s prices. While the cost of flats has risen, Mr Wong noted that median household incomes have also increased tenfold from $900 to $9,000.
“BTO flat prices have, in fact, moved in tandem with incomes,” he said, adding, “So if we do a proper comparison, a fair comparison, BTO flats remain affordable. The typical household now continues to use less than 25 per cent of their income to service the loan, just like in 1980.”
Mr Wong concluded by reaffirming that affordable and accessible public housing, like access to quality education and healthcare, will remain a cornerstone of Singapore’s social compact.
