Singapore will relook its public housing policies and try to bring down the prices of built-to-order (BTO) flats.
While the housing policy had enabled the vast majority of Singaporeans to own homes, it needed to be reviewed in the light of significant demographic and economic changes, said Minister for National Development Khaw Boon Wan on Friday.
The primary mission of the Housing & Development Board (HDB) remained offering affordable homes. To that end, "we can now pause and see what else we can do to bring BTO (built-to-order) prices in non-mature estates to say, around four years of salary as it was before the current property cycle started," said Mr Khaw.
This, he said, will be achieved partly through cooling measures to nudge the property market down and partly by seeing if an alternative housing option can be designed.
The HDB will be ramping up flat supply; 25,000 new flats will be launched this year, up from the earlier announced 23,000 flats.
In the more immediate future, first-timer singles aged 35 and above will be able to buy new two-room flats directly from the HDB with effect from the July BTO exercise; the first BTO exercise for singles will be in Sengkang.
Providing broad parameters, Mr Khaw said singles who earn up to $5,000 per month will have an option of 35-sq-m and 45-sq-m flats in non-mature estates.
"A couple of other important details are still being finalised," qualified Mr Khaw. "For example, how much should we subsidise the flats, compared to married couples? What should the relative priority be between singles and married couples applying for these flats?"
Given that singles account for some 15 per cent of resale flat transactions, this could dampen resale demand, putting downward pressure on prices that have currently reached a peak, said ERA Realty Network's key executive officer Eugene Lim.
"We expect many of them (singles) to buy these new flats as these flats will have to be priced such that a single person earning $5,000 or less per month will be able to afford them. By buying directly from the HDB, they do not need to pay COV (cash-over-valuation) as in the resale market," said Mr Lim.
R'ST director Ong Kah Seng disagreed, saying that the announcement could result in renewed buying interest in the HDB resale market (particularly for three-room flats and larger) as well as the shoebox sector.
"Since H2 2012, the 'singles' housing market is partially awaiting details of the government's review (with regard to) whether singles can buy BTO flats, and if so, what is the eligibility criteria," said Mr Ong.
With the eligibility criteria made known, singles who do not qualify to purchase a BTO flat, or those who qualify but find a two-room flat too small for their needs, will resume their hunt for a suitable small-sized private apartment or larger HDB resale flat, said Mr Ong.