SINGAPORE: The Singapore government will continue to keep an eye on income growth and conditions in the local property market, and will raise income ceilings "when the time is right”, said Minister for National Development Desmond Lee on Wednesday (Mar 5).
Mr Lee was responding to questions raised by Members of Parliament (MPs) on the possibility of raising eligibility income ceilings for Build-to-Order (BTO) flats and executive condominiums.
The current BTO income ceiling for families and married couples is S$14,000 (US$10,480) per month.
This “still covers about eight in 10 Singaporean households”, said Mr Lee, adding that new flats and housing subsidies “are prioritised for those who need them more”.
For executive condominiums, which are a hybrid of public and private housing as they are built and sold by private developers, the income ceiling is S$16,000 a month.
Mr Lee said the government will increase the supply of executive condominiums to around 1,500 units this year, up from around 1,200 in previous years.
“Those within and above this income bracket can also choose from a wide range of resale HDB flats or private residential properties, for which there is no income ceiling."
Speaking during the debate on the Ministry of National Development’s budget, Mr Lee reiterated the government’s commitment to keeping public housing “affordable and accessible”.
There have been “significant” housing challenges in the past few years, with the COVID-19 pandemic disrupting construction, materials and labour; causing delays in BTO completions.
At the same time, demand surged due to demographic shifts and pandemic-related factors, driving up resale prices after years of stagnation.
Mr Lee said the government has since caught up with the delays and completed all 75,800 flats affected by the pandemic.
Supply of new housing has also been ramped up, with authorities on track to exceed a commitment to launch 100,000 BTO flats from 2021 to 2025.
Of these, more flats with shorter waiting times of less than three years have been rolled out. A previous target to build 2,000 to 3,000 of such flats by 2025 was achieved last year, when more than 2,800 were launched, said Mr Lee.
The median waiting time for BTO flats was also shortened to less than four years in 2024, comparable to the pre-pandemic norm of three to four years.
All these efforts have brought down BTO application rates for first-time buyers, said Mr Lee.
Rates for first-time families have stabilised to below pre-pandemic levels – from 3.7 times in 2019 to 2.1 times in 2024. In the most recent BTO sales exercise in February, it fell further to 1.5 times.
On the private housing front as well, supply has been ramped up, with land for around 11,000 units released last year through the government land sales (GLS) programme. This marked the highest in a single year since 2013.
Mr Lee said the government will “keep pushing on to increase housing supply”, with the planned launch of more than 25,000 flats this year.
These include 19,600 BTO flats, such as the first project in the upcoming Mount Pleasant housing estate, and more than 5,500 Sale of Balance (SBF) Flats in around 60 per cent of towns and estates.
Private housing supply through the GLS programme will also be raised to around 8,500 units in the first half of 2025, with more to come later in the year.
From 2025 to 2027, the government will launch more than 50,000 BTO flats, the minister added.
Mr Lee also reiterated the government’s measures to keep new flats affordable, including increasing market subsidies for BTO flats and grants for home buyers.
For instance, the Enhanced Central Provident Fund (CPF) Housing Grant was raised last year to offer first-timer families up to S$120,000 in grants, with lower-middle income households getting more support.
As a result, more than eight in 10 first-time families who collected keys to their BTO flats were able to service their HDB loans using their CPF, “with little to no cash outlay”, said Mr Lee.
“Major steps” have also been taken to ensure that public housing in “attractive locations” stays affordable - first with the Prime Location Housing Model in 2021, then the new framework of classifying flats as Standard, Plus or Prime last year.
Prime and Plus flats are those located in superior locations. They are priced with more subsidies than Standard flats, to ensure affordability, but also come with tighter resale and rental restrictions to curb the so-called “lottery effect” of owning flats in prime and central locations.
For example, flat owners must live in their unit for at least 10 years before they are allowed to sell on the open market, compared with five years for Standard flats. Owners will also be subject to a subsidy clawback upon selling.
“This allows us to unlock new, choicer areas for affordable public housing,” he said, citing how the first BTO project in the upcoming Mount Pleasant housing estate will be offered as either Plus or Prime flats.
On ensuring accessibility, Mr Lee gave the assurance that priority will still be given to first-timer families through various schemes.
But the government will also want to look at the needs of singles and second-timer families.
For the latter group, it will raise the allocation quota for three-room and larger BTO flats by five percentage points from the next sales exercise in July, Mr Lee said.
Turning to resale flats, Mr Lee acknowledged the anxieties among Singaporeans over prices in this market.
HDB resale prices rose 9.6 per cent in 2024, almost double the 4.9 per cent in 2023, based on official flash estimates released earlier this year.
One reason is a supply-demand imbalance caused by the pandemic, said Mr Lee. Alongside that, there have been fewer flats meeting the minimum occupation period (MOP) and entering the resale market in the past few years.
“In fact, in 2020, HDB should have completed 20,000 flats. But because of the disruptions by the pandemic, we completed fewer than half of that,” he told the House.
“So, five years on in 2025, we have much fewer flats completing their MOP, and even fewer flats going on the resale market.”
Mr Lee said this tightness in housing supply “should start to recover next year” as the number of new flats reaching their MOPs this year is set to see a “significant jump” to 13,500 in 2026, from 8,000 this year.
This figure will “steadily increase” to 19,500 in 2028, he added.
Together with cooling measures that “continue to work their way through the market”, the HDB resale market “will stabilise”, said Mr Lee.
In his speech, the minister also announced an extension to Additional Buyer’s Stamp Duty (ABSD) remission timelines for housing developers that “undertake complex projects”.
Developers purchasing residential land are subject to 40 per cent ABSD. Of that, five per cent is non-remittable and the remaining 35 per cent may be remitted upfront subject to conditions.
Currently, most housing developers are required to commence construction within two years, as well as complete construction and sell all units within five years, “to ensure timely injection of housing supply”, according to the minister.
If they fail to do so, an upfront remittable ABSD component will be clawed back with interest.
This rule was tweaked in last year’s Budget, to allow developers that sell at least 90 per cent of units within five years from land acquisition date to have a lower clawback rate.
On Wednesday, Mr Lee said the ABSD remission timeline would be extended by six months to a year, for developers working on certain projects.
According to a separate press release, these include:
Projects that fall within any of the four categories will be provided an extension of six months to the ABSD remission commencement, completion and sale timelines, said the press release from the Ministry of National Development and the Ministry of Finance.
Projects that fall within more than one category will be given an extension of 12 months.
These revisions to the ABSD remission timelines will apply to projects on residential land acquired on or after Mar 6, 2025, the authorities said.
“Through this, we want to encourage housing developers and their alliances of firms to undertake projects that will transform our built environment,” Mr Lee said.
In addition, extensions will be granted for smaller projects submitted through CORENET X, to encourage "early adoption" of a platform which aims to streamline the approval process for development projects.
The government will extend the qualifying period for ABSD remission timeline extensions for these smaller projects, until Dec 31, 2026.
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