Singapore Budget 2015: HDB flats have become more affordable, says Minister Khaw

SINGAPORE - Housing Board flats have become more affordable since 2011 and the Government's promise is that every generation will be able to afford their own HDB homes, said Minister for National Development Khaw Boon Wan in Parliament on Tuesday.

He cited figures showing that resale flat prices had fallen and new flat prices were within buyers' expectations.

Resale prices have dropped from their 2013 peak. They are now 37 per cent higher than the 2009 low, while median household income has caught up by rising 38 per cent since then, said Mr Khaw.

As for new flats, a recent HDB survey found that people were willing to pay up to $300,000 for a three-room flat and between $300,000 and $500,000 for a four- or five-roomer.

Last year, 90 per cent of Build-to-Order three-room flats were sold at below $250,000. For new four-roomers, 81 per cent were sold below $350,000, and 89 per cent of new five-roomers were sold below $450,000.

"These are actual transactions. They paint a comforting picture of young Singaporeans being able to get their first BTO flat, well within their expected budget," said Mr Khaw.

From 2009 to 2014, new flat prices rose 15 per cent without housing grants, or just 6 per cent with grants. "Measured against the household income increase of 38 per cent, we can see that public housing affordability has substantially improved since 2011," he said.

But not everyone knows this, he added.

The same HDB survey asked people if they knew the price of a four-room Build-to-Order flat in a non-mature estate. About one-third did not know, while 5 per cent thought they cost more than $500,000, even though the actual price is $295,000 before grants.

With housing grants, a young couple earning $4,000 a month could get such a four-roomer for $260,000 on average.

Home ownership has also been possible for the lower-income group, added Mr Khaw. From March 2012 to July 2014, a total of 1,491 families with household incomes below $1,000 had booked two-room or larger BTO flats.

"So when we said that families with $1,000 household income could afford two-room flats, we were not imagining things," he added.