Navigating the Ongoing Housing Debate Amidst Rising Concerns
Bread-and-butter issues remain a pressing concern for the average Singaporean. From underpaid delivery riders to ambitious boardroom executives, everyone shares a common anxiety: will the merciless free market ever shine a light on our struggles? High inflation rates and the looming threat of a global recession cast shadows over many, leaving most feeling in the dark—except perhaps for families fortunate enough to sell their HDB flats for million-dollar sums. But I digress.
At the heart of these pressing issues lies Singapore’s escalating housing crisis. Once a point of pride, high homeownership rates have come under scrutiny amidst rising claims of unaffordability. The burning question remains: will future generations be able to afford public housing? As we await answers, we find ourselves scrambling for solutions.
But we’re not alone in this struggle; our leaders are scrambling alongside us. Heated debates in Parliament over HDB prices have ignited public discourse. To help you navigate this flood of information, we’ve tracked the developments surrounding Singapore’s housing dilemma over the past month.
4 October 2022 — Lighting the Fuse
November was a month of pivotal discussions. Three pointed questions from opposition MPs Pritam Singh and Gerald Giam, along with NCMP Leong Mun Wai, during a Parliamentary session on November 7, set off a flurry of debates regarding Singapore’s housing market. These inquiries didn’t arise in a vacuum; they were preceded by a Facebook post on October 4 from former GIC Chief Economist Yeoh Lam Keong, who claimed HDB’s reported $270 million loss on a BTO project in Ang Mo Kio was merely “an accounting sleight of hand.”
Yeoh argued that the government acquires land at a subsidized cost and transfers it to HDB without charging a fee. According to him, the reported loss only reflected what the government would have earned had it sold the land at market price instead of transferring it to HDB.
In response, POFMA correction notices were issued to both Yeoh and The Online Citizen for supporting that narrative on October 14. National Development Minister Desmond Lee clarified that HDB purchases land from the government at fair market value, asserting that HDB’s losses were “accurate and real.”
7 November — “Not Meaningful”
In a follow-up, Leader of the Opposition Pritam Singh questioned whether HDB could provide a breakdown of the total development costs of new flats and the subsidies applied to public housing, particularly in light of the recent POFMA corrections.
Second Minister for National Development Indranee Rajah replied, “My straightforward answer is that it would not be helpful or meaningful to do so,” emphasizing that Singaporeans are more concerned about affordability than the flat’s total development cost.
The implications of this exchange delve deep into the need for transparency in Parliamentary inquiries, as Rajah urged Singh to file a formal question for clarification. During the same session, MP Gerald Giam inquired about the success rates of first-time Singaporean couples in securing BTO flats in non-mature estates, leading Lee to share statistics indicating higher success rates in these areas.
20 November — Non-Mature vs. Mature
In the weeks that followed, mainstream media outlets published explainers detailing how HDB keeps public housing affordable, announcing new BTO flats in non-mature estates. Minister Lee revealed that the government is reviewing the classification system for mature and non-mature estates, acknowledging that the distinctions were becoming less relevant as Singapore evolves.
However, the public’s perception still categorizes mature estates as having superior amenities and connectivity, which leads many first-time couples to prefer applying there—often resulting in unsuccessful applications due to high demand. Interestingly, the same trend emerged for BTO projects in non-mature estates, as evidenced by the application rate for the Woodlands South Plains project, which was 11.7 applicants per available unit.
30 November — Clarity at Last
Until now, HDB had not disclosed application success rates for BTO projects in mature estates, likely to encourage buyers to focus on non-mature estates. However, during the Parliamentary session on November 30, MP He Ting Ru posed four critical questions regarding HDB’s BTO applications in mature estates over the past three years.
In a written response, Minister Lee clarified that between 20 to 24 percent of first-time families were successful on their first BTO attempt in mature estates. This was the information we sought from HDB weeks earlier.
In a direct response to claims of excessive failure rates, Minister Lee asserted that virtually all first-time families applying for non-mature estate BTO flats were given opportunities to select a flat within their first two attempts. He further noted that fewer than 2% of successful applicants for mature estate flats took more than five tries.
7 December — A Glimmer of Hope?
In a notable move, HDB and the Ministry of National Development released a breakdown of costs for BTO flats on December 7. This followed a month of heated debate between MPs Pritam Singh and Indranee Rajah and emphasized that BTO flat prices are determined by applying subsidies against the prices of surrounding resale flats.
11 December — Affordability in Focus
On December 11, NCMP Leong Mun Wai took to Facebook, suggesting that excluding land costs from BTO prices could lead to lower prices, but cautioned that this would ultimately harm all Singaporeans. In response, Senior Minister of State for National Development Sim Ann highlighted the trade-offs involved, stating that increasing housing subsidies would likely require cuts to other vital areas like education and healthcare, or even an increase in taxes.
The Housing Question Persists
The ongoing housing question continues to challenge both policymakers and the public alike. It underscores the delicate balance of addressing trade-offs in essential sectors—education, healthcare, and housing.
Whether the existing housing framework requires adjustments is a debate for another day, but one thing is clear: a comprehensive overhaul may be necessary to adapt to current realities. For now, we hope the vigorous discussions continue as we monitor the evolving situation. Here at RICE, we’re ready to digest all the information you throw our way—for the foreseeable future, or until we find a way to house our entire population underground. Whichever comes first.
