GE2025: How parties are dealing with concerns over housing needs
Higher home prices fuelled by Covid-19-related construction delays have led to greater anxieties among Singaporeans, including worries by prospective home owners of being priced out of the market.
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From mid-2025, singles applying for BTO flats will get priority access when they buy a home near or with their parents.
ST PHOTO: KUA CHEE SIONG
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Those who looked to the resale market in recent years would have seen prices rise, with a small but growing number of Housing Board flats transacting at a million dollars or more.
Given such concerns, the matter of how to keep housing accessible and affordable has been debated in Parliament multiple times over this term of government, with political parties putting forth a varied range of solutions.
In December 2021, the PAP government said it was prepared to launch as many as 100,000 new flats by 2025
Minister for National Development Desmond Lee noted then that there was a growing trend of smaller households as social norms changed.
Meanwhile, the disrupted supply of Build-To-Order (BTO) flats meant some turned to the resale market. The buoyant resale market in turn channelled more demand to the BTO market, and the result was a spike in both BTO application rates and resale prices.
The Government’s first priority was therefore to ramp up flat supply and catch up on construction, said Mr Lee.
In March 2025, he told Parliament that HDB was on track to exceed its commitment to build 100,000 flats, the equivalent of building two Ang Mo Kio towns in less than five years.
Two months earlier, HDB completed the last of the 92 pandemic-delayed BTO projects,
Another priority was to bring down the waiting time for BTO flats to the pre-pandemic norm of less than four years, which was achieved in 2024.
This was done by building more flats with a shorter waiting time of under three years, with an additional 12,000 such flats to be launched from 2025 to 2027.
The PAP government also said it would keep flats affordable for a wide range of incomes, increasing market discounts while raising grants. For instance, the Enhanced Housing Grant was increased in 2024
Competing ideas to keep housing accessible
To keep flats in attractive locations accessible to a broad range of Singaporeans, the Government also implemented a new flat classification framework in 2024.
This allows for flats in premium locations such as Redhill and Tanjong Rhu to be kept affordable through subsidies, while reducing the lottery effect through a longer minimum occupation period and a clawback of the subsidies when the flats are resold.
In his Budget 2025 speech,
With this achieved, the authorities will allow more second-timer families to buy BTO flats
From mid-2025, singles will not only be able to buy two-room flexi BTO flats in all locations from HDB, but also get priority when they apply for such flats to live with or near their parents.
To keep resale home prices under control, the Government has also introduced multiple rounds of cooling measures since 2021.
In December 2021, it raised the additional buyer’s stamp duty (ABSD)
It also tightened the total debt servicing ratio threshold, which limits the amount that a person can spend on monthly debt repayments, and lowered HDB loan limits.
In September 2022, private property owners were required to wait 15 months after selling their property
The loan-to-value limit, which was reduced in 2021, was also further reduced from 85 per cent to 80 per cent.
The WP has called for a reboot to Singapore’s housing policies.
In 2023, Sengkang GRC MP Louis Chua said measures put in place by the Government such as the increased supply and new flat classification system did not adequately address the challenges in the public housing market.
He asked the Government to look into building homes ahead of demand,
Expanding rentals, rethinking pricing
The WP in 2021 had called for the creation of an expanded public rental scheme,
Mr Chua said then that the Government should cater its public housing rental scheme to a wider population of Singaporeans than just the lower-income group.
It is a misconception that home ownership is inherently superior to renting, he added, citing countries like Switzerland and Germany, which have high gross domestic product and Human Development Index scores despite low home ownership rates.
The WP has also called for the lowering of the eligibility age for singles to apply for a BTO flat from 35 to 28, a proposal that was in its election manifesto for GE2020.
In a 2022 parliamentary speech,
The Progress Singapore Party has likewise called for a public housing policy reset, and championed two proposals that it said would lead to a more equitable allocation of HDB flats and provide younger Singaporeans with more housing choices.
The first, the Affordable Home Scheme, would essentially let flat buyers acquire a flat at its construction cost, plus a location premium. They would pay for the land costs, alongside accrued interest, only when they sell their flat in the resale market.
Non-Constituency MP Hazel Poa said in February that this was a better policy than the PAP’s approach, whereby HDB pays the market cost of land into the reserves. She claimed that this placed a heavy burden on Singaporeans, who pay for it through taxes and “30-year-mortgages that are increasingly unaffordable”.
The party also proposed a Millennial Apartments Scheme, in which the Government would keep a large stock of rental flats in prime locations near the Central Business District for young Singaporeans.
Such flats would be smaller, and could be rented out on two- to five-year terms, including to Singaporeans waiting for their BTO flats, said PSP chief Leong Mun Wai during the Budget debate in 2024.
The scheme could relieve the pressure on couples to rush to secure a BTO flat, while addressing “the current acute shortage of alternative housing options” for young couples and singles, he added.
Proposals not equitable: PAP
Responding to these proposals,
“While the (WP) proposal sounds attractive, it ignores the trade-off that far lower prices would attract even more flat applicants,” he said. “It also does not address the windfall gains enjoyed by flat buyers, some of whom may be from the higher-income groups.”
He also cautioned that the housing market is highly sentiment-driven, and demand can appear or disappear overnight.
This was the case when the Asian financial crisis struck in 1997, and HDB ended up with 31,000 unsold flats, which took more than five years to clear.
“The many unsold flats represented a waste of taxpayers’ money. The holding costs incurred from holding the vacant housing stock are not inconsequential; money that could have been well spent on other uses in healthcare, education and other areas,” he said.
On PSP’s Affordable Home Scheme, Minister in the Prime Minister’s Office Indranee Rajah said it would not only erode Singapore’s reserves, but also benefit only a select group of flat buyers
The state sells land at fair market value. To preserve the value of the reserves, the land sales proceeds go back to Singapore’s reserves, and are reinvested by its investment entities to benefit both current and future generations.
Half of the investment returns supplement the national Budget annually, through the Net Investment Returns Contribution, and the other half is reinvested for the benefit of the people and future generations, Ms Indranee noted.
But under the PSP’s scheme, users get to enjoy the land without paying for it. So long as they are occupying the flat without paying for the land, that is a draw on the nation’s reserves, she said.
Adopting such a policy would mean the Government having to either raise taxes or cut spending, said Ms Indranee.
On PSP’s Millennial Apartments Scheme, Senior Minister of State for National Development Sim Ann said the Government had good reasons to keep subsidised rental housing “very targeted”,
Mr Lee also acknowledged calls to lower the minimum age for singles to buy BTO and resale flats, and said the Government is studying the matter.
Singles have been able to apply for two-room flexi flats in all locations
Balancing needs of all S’poreans
Taken as a whole, real estate and policy analysts said the PAP government’s approach to public housing had the longer-term view, which included ensuring that any policy change does not end up destabilising the market in a country where nine in 10 residents are home owners.
Chief data officer Luqman Hakim of 99.co, a property platform, noted that the ruling party uses supply adjustments, grants and targeted interventions to keep flats affordable. The increased BTO supply and expanded housing grants showed its commitment to managing demand-supply mismatches, he added.
“The PAP’s position is based on the belief that Singapore’s housing policies are fundamentally sound (and) their approach ensures that the housing market remains stable and does not face drastic shocks,” he said.
Agreeing, OrangeTee Group’s chief researcher and strategist Christine Sun said that as a package, the PAP’s housing policies showed a broader strategy that evaluated the implications for the various market segments.
In contrast, the positions taken by the alternative parties could be seen to prioritise immediate concerns, and represented the sentiments of specific groups in the population.
For instance, the WP’s call to lower the BTO eligibility age for singles to buy two-room flexi flats from 35 to 28 could result in many young buyers acquiring flats as singles, but then needing to sell them off when they get married to get a larger place.
The latest available statistics show that the median age at first marriage for grooms here is 31, and 29.5 for brides.
Independent political observer Felix Tan said that accounting for waiting times – typically three to four years – these flats could end up becoming matrimonial homes that are too small, which could push couples to look at the resale market.
A scenario where a large group feels the need to upsize could increase market instability, said Ms Sun.
The longer-run implications of specific proposals by the alternative parties should also be unpacked, said analysts. This includes a call to expand the availability of public rental flats, made by both the WP and the PSP.
Emeritus Professor of Sociology at NUS Chua Beng Huat, who is also visiting fellow at SMU’s School of Social Sciences, said rent collected from such a scheme has to be able to finance subsequent cycles of housing construction, or it would be a constant drain on public finances.
This means rental rates from such a scheme would have to be at market value and have minimal difference from renting on the open market, he added.
Ms Sun said a scheme that lets young Singaporeans rent flats at preferential rates in the city centre may also lead to a drop in appeal of non-mature estates among buyers, possibly stagnating pricing for homes outside the city centre.
In a nutshell, housing policy must be a balancing act, said analysts.
This means taking into account public housing as shelter, assets, and a long-term store of value, while recognising that Singapore’s limited land has to be priced and paid for, said Institute of Policy Studies senior research fellow Gillian Koh.
Questions of accessibility and pricing cannot be resolved in ways that would cause severe disruptions to the resale market, she added.
Agreeing, Dr Woo Jun Jie, senior lecturer at the Lee Kuan Yew School of Public Policy at NUS, said PAP policies thus far have made asset appreciation possible through a vibrant and functioning resale market.
This is important as many home owners tend to downsize when they get older, thereby unlocking a substantial amount of retirement savings, he added.
More broadly, analysts said that the opposition parties’ focus has largely been on supply-side tweaks, while the PAP has made adjustments to both supply and demand, such as through the new Standard/Plus/Prime model.
Singapore University of Social Sciences Associate Professor Walter Theseira said the new classification model is the most significant change in years, as it restructures pricing and eligibility for high-value HDB housing.
Indeed, application rates for such flats have fallen significantly, as prospective owners understand that the profit potential would be considerably reduced compared with flats with similar attributes in the past, he said.
“The PAP acknowledges that prices are ultimately what determines the market allocation by desirability, although they’ve tried to blunt it by limiting ownership and resale conditions for Prime and Plus flats,” he said.
“However, I don’t see that the other parties have tackled this issue at all.”
