Veteran blogger Leong Sze Hian on Wednesday (11 Aug) questioned if the “seriously unaffordable” price of Housing and Development Board (HDB) flats and the waiting time of 5.5 years to get an “affordable flat” will contribute to Singapore’s low fertility rate.
HDB has earlier announced that a total of 4,989 flats have been launched for sale across seven estates under the August 2021 Build-to-Order (BTO) exercise, with more than half located in mature estates.
The seven estates where the flats are launched include Hougang, Jurong East, Kallang Whampoa, Queenstown, and Tampines.
In a Facebook post on Wednesday, Mr Leong said that the average resale flats in Hougang are “seriously unaffordable” based on the International Housing Association’s ratings for the price to income ratio, noting that the flats costing 5.64 times of median household income.
The International Housing Association uses “median multiple” in its ratings — which is the median house price divided by the median household income — labelling a ratio above 5.1 as “severely unaffordable”, while a ratio between 4.1 to 5.0 is “seriously unaffordable”.
Meanwhile, the median monthly income from work for households in Singapore is S$7,744 in 2020, or about S$93,000 a year.
Mr Leong opined that a 4-room flat will be most preferable for the “average” households in the Hougang area, of which HDB noted that the transacted prices of resale 4-room flats in Hougang Citrine and Kovan Wellspring range from S$460,000 to S$590,000.
“This means that the average resale flat in Hougang would cost 5.64 times of median income and is ‘seriously unaffordable’!” said the blogger.
Mr Leong further noted: “However, it appears that most Singaporeans do not feel the pinch due to their first flats being ‘subsidised’.”
According to HDB, the new flats are priced with a “generous subsidy” — after taking into account several factors like location, flat attributes, and prevailing market conditions — and that the prices are considerably lower than the transacted prices of comparable resale flats nearby.
“Eligible first-timer families can also benefit from the Enhanced CPF Housing Grant (EHG) of up to S$80,000. With EHG, flat buyers will pay prices starting from S$28,000 for a 2-room Flexi flat, S$124,000 for a 3-room flat, S$264,000 for a 4-room flat, and S$347,000 for a 5-room flat,” it said.
This means that the selling price for a new flat in Hougang Citrine and Kovan Wellspring will start from S$324,000 onwards before grants, but buyers will only have to pay from S$264,000 onwards after grants for BTO flats that are subsidised.
HDB also noted that there has been some slow-down in construction progress due to the implementation of COVID-19 safe management measures at construction sites.
It explained that projects with challenging site conditions, more complex designs, and large number of dwelling units or storeys may take longer than usual to complete.
As such, for the BTO projects launched this month, the waiting times range from 37 to 67 months, or about three to 5.5 years, with a median waiting time of just over four years.
To this, Mr Leong asked if the average couple in Singapore will need to wait “as much as 5.5 years (not including renovation and furnishings)” to be able to buy an affordable flat.
He further questioned if the waiting time will affect the nation’s fertility rate, which has reportedly declined to a historic low of 1.1 last year, if that is the case.
This may be evidenced by The Straits Times (ST) online poll in 2016, which revealed that close to 93 per cent of the 14,000 responses voted in favour of owning a flat first before having a baby.
