Opinion
Affordability or curbing million-dollar flats: Which is Singapore’s bigger housing challenge?
Leong Sze Hian discusses Singapore’s housing challenges, contrasting efforts to reduce million-dollar HDB flats with addressing affordability for lower-income buyers. While cooling measures curb luxury sales, he argues affordability for average Singaporeans remains the more critical issue.

by Leong Sze Hian
Singapore’s housing landscape is undergoing significant scrutiny, with policymakers striving to balance competing priorities.
On one side lies the government’s focus on reducing the proportion of million-dollar Housing and Development Board (HDB) flats sold; on the other, ensuring affordability for lower- and middle-income Singaporeans buying HDB flats. The question arises: which is the more pressing issue?
According to National Development Minister Desmond Lee, policies introduced in recent years have achieved measurable success in stabilising demand for Build-To-Order (BTO) flats. In 2024, there were 2.1 first-time applicants per flat, down from 3.7 in 2019.
However, a slight rise compared to 1.9 in 2023 suggests demand remains strong despite recent cooling measures. Among these measures, a stricter policy penalising first-time applicants who reject BTO flats after selection has likely led to more deliberate applications.
Cooling measures and their impacts
Since 2021, four rounds of property cooling measures have targeted rising housing prices, particularly in the resale market. A notable intervention was the introduction of a 15-month wait-out period in September 2022 for private homeowners seeking to purchase HDB resale flats.
As a result, the proportion of private property downgraders buying million-dollar flats fell from 34% in early 2022 to 12% by late 2024.
While these measures curtailed high-value transactions, the broader housing affordability challenge persists. Data from 2024 indicates significant price increases in lower-tier HDB resale flats, with prices for two-room flats rising by 45.4% and three-room flats by 41% during the year.
In contrast, private residential property prices rose by a modest 3.9% during the same period, signalling disproportionate affordability pressures on public housing.
The affordability challenge
Minister Lee highlighted that 80% of first-time families purchasing new or resale HDB flats can finance their homes entirely using Central Provident Fund (CPF) contributions, requiring minimal or no cash.
However, this statistic only reflects those who successfully bought flats and excludes those deterred by upfront costs or stringent loan-to-value (LTV) limits. The LTV cap was reduced from 80% to 75% in August 2023, increasing down payment requirements.
This adjustment, while aimed at cooling the high end of the market, raises questions about its impact on potential buyers unable to meet stricter financial criteria.
The government’s ongoing ramp-up of two-room flexi flats—set to constitute 25% of the 10,500 flats available in February 2025—further reflects the demand from singles, seniors, and potentially, those constrained by affordability issues.
With resale prices for two- and three-room flats rising significantly faster than private property, affordability remains a pressing concern.
Million-dollar flats: A symptom or a distraction?
The focus on reducing million-dollar HDB flat sales might appear justified given Singapore’s broader housing objectives. However, these transactions represent a small fraction of the market, often driven by private property downgraders or buyers prioritising premium locations.
Cooling measures, including the 15-month wait-out period and higher Additional Buyer’s Stamp Duty (ABSD) rates, have successfully curtailed such sales without addressing broader affordability for average buyers.
While fewer million-dollar flats may suggest a shift towards more affordable transactions, it could also reflect constrained budgets rather than enhanced access to housing. Data clarity is needed to assess how many potential buyers are deterred from the market entirely due to rising costs or stricter loan policies.
Moving forward
As the government prepares to launch over 50,000 flats from 2025 to 2027, ensuring equitable access for lower- and middle-income Singaporeans must remain central. Expanding housing supply and refining eligibility policies are steps in the right direction, but they must be accompanied by measures targeting affordability more directly.
Ultimately, the core issue lies not in curbing luxury purchases but in ensuring that average Singaporeans can access safe, affordable homes without undue financial strain. Policymakers must focus on striking a balance that ensures housing remains a cornerstone of social stability and economic security.

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