Will the HDB resale market, land tenure and senior living feature at the National Day Rally?

SINGAPORE turning 59 is cause for celebration. A major source of national pride is our public housing.

Sure, some people complain about the waiting time before collecting the keys to a new Housing and Development Board (HDB) flat, and the difficulty securing a desirable unit. Some people wish for lower prices of already generously subsidised new flats, or even more generous housing grants.

Also, some groups feel unfairly excluded from buying new or resale flats. Occasionally, new HDB homeowners complain about defects with their units.

Plaudits

Still, HDB towns are typically well-planned with comprehensive amenities that cater to diverse needs and enjoy good transport links. By building upwards, Singapore’s land scarcity does not hinder it from housing a growing population comfortably.

The design of HDB flats has improved through the years and HDB homes can be relatively spacious. In 2023, over half of resident households lived in four-room, five-room or executive flats. The average resident household size in a four-room flat of around 1,000 square feet was 3.17 persons in 2023. 

Crucially, different races and socioeconomic groups generally live harmoniously, often in owner-occupied homes, in HDB estates. In turn, Singapore’s social cohesion draws businesses, especially as many countries are seeing societies fracturing.

Moreover, many locals build wealth through owning an HDB dwelling. Some young couples, who start by buying a Build-To-Order (BTO) flat at a subsidised price, sell their BTO home post reaching the minimum occupation period and use the proceeds to help buy a private home.

As the population ages, HDB homes play a vital role for many people in their financial planning for retirement. Some retirees free up funds by selling a large HDB home and moving to a smaller flat, while others earn recurring rental income by leasing out rooms in their HDB home. 

Also, a retiree might sell a private home and subsequently buy an HDB flat. This releases a large capital sum and lowers recurring property-related expenses.

What is laudable too about the public housing system is it constantly gets refined. Last year’s National Day Rally saw the unveiling of the new classification system for BTO projects of Standard, Plus or Prime, which will apply to October’s BTO exercise. 

Plus flats will be in choicer locations than Standard flats and come with more subsidies and tighter restrictions versus Standard flats. Prime flats will be in the “choicest” locations, usually closer to the city centre. They will come with the most subsidies and the tightest conditions. This new flat classification aims to better achieve the objectives of affordability, good social mix and fairness.

Could some changes relating to public housing feature in Prime Minister Lawrence Wong’s maiden Rally on Sunday (Aug 18)?

Resale market

Possibly, the strong HDB resale flat market will be in focus. The HDB resale price index rose 2.3 per cent quarter on quarter (qoq) in Q2 after climbing 1.8 per cent qoq in Q1. The index is up 43 per cent since Q1 2020. 

While accounting for a small share of total resale transactions, the number of resale flats changing hands for more than a million Singapore dollars each is generally rising.

Even though many first-timer families who collected their keys to resale flats recently can service their monthly loan instalments with their Central Provident Fund, with minimal or no cash outlay, news of some resale flats fetching lofty prices might make buyers fret over the affordability of HDB resale homes.

The grant for first-timer singles and families buying resale flats rose in 2023. Will first-timers who buy resale units because they require a home urgently get even more help?

Maybe instead of further hikes in grants, families buying their first home in the HDB resale market could be helped indirectly via measures that cool demand from other resale flat buyers. Also, might higher taxes apply to high quantum resale flat transactions? 

Diminishing land leases

Some HDB flat owners may increasingly worry over the shrinking land leases of their flats. 

A 99-year leasehold flat completed in the early 1970s will be at just over the half-way point of its land lease. In a decade or so, an owner might start fretting over the unit’s diminishing land lease remaining. 

Numerous examples exist of how the Selective En bloc Redevelopment Scheme (Sers) works. Affected residents can select a new subsidised home at a designated replacement site, together with their current neighbours.

However, Sers is limited to precincts with high redevelopment potential. There may only be a few more Sers projects to come as many sites with high redevelopment potential have already been announced.

More homeowners will likely benefit from redevelopment before their 99-year HDB lease expires under the Voluntary Early Redevelopment Scheme (Vers) instead. Vers will be a voluntary scheme offered to selected precincts when they are aged about 70 years or older.

Could many more details on Vers be forthcoming soon? As Vers affects many homeowners, expect extensive consultation and feedback on this matter.

Senior living

The proportion of elderly residents has grown rapidly and will rise further amid rising life expectancy and low birth rates. The share of Singapore residents aged 65 years and over was 17.3 per cent in 2023 versus 9 per cent in 2010, and 7.2 per cent in 2000.

Seniors, who would benefit from assisted-living options, can access Community Care Apartments, a public-housing typology that pairs senior-friendly housing designs with on-site care services, such as 24-hour emergency monitoring and response, basic health checks and home fixes, as well as group activities.

Completed in 2017, Kampung Admiralty was the first-of-its-kind development here. The 11-storey “modern kampung” features 100 public housing flats for the elderly, a medical centre providing specialist outpatient care, an active ageing hub co-located with a childcare centre, dining and retail outlets, as well as a hawker centre.

Given that many people aspire to age within the community, expect to see the building of more public housing developments that integrate housing for the elderly with various supporting amenities. In responding to the needs of an ageing population, the HDB should aim to be a world leader in housing the elderly.

A public housing system that works well can continue working well with constant refinement. When PM Wong delivers his speech on Sunday evening, housing measures might feature large.