Should age eligibility to own HDB be reduced?

Goh Weihan
Goh Weihan

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In the recent parliamentary debates, Mr. Pritam Singh put forth his arguments on lowering the eligibility age for singles to buy an HDB BTO or resale flat from the existing 35 to 28.

In his speech, Mr. Singh referenced the government’s latest Census and shared that the proportion of singles has increased across age groups, particularly the ones between the ages of 25-34. Between 2010-2020, the proportion of singles among residents aged 25-29 rose from 74.6% to 81.6% (males) and 54% to 69% (females). The proportion of singles among those aged 30-34, rose to 41.9% (males) and 32.8% (females).

Based on the assumption Mr. Singh’s intentions are to ease all restrictions on singles, i.e. to BTO larger than 2-room flexi and enter the resale market from 28 years old, here are some scenarios we might expect to potentially play out.

Short-term pressure on the Resale Market

HDB resale prices have experienced a 3% q-on-q increase the past quarters and do not show signs of slowing despite the 2021 cooling measures. Having a sudden influx of demand entering the market will undoubtedly generate more competition leading to even pricier transactions and we may potentially see more Cash-over-valuation (COV) transactions. 

Long-term pressure on BTO

Every BTO to date is usually oversubscribed, regardless.

2022 Median income to own HDB flats
Source: Ministry of Manpower

Given the degree of subsidy and HDB loan-to-value of 85%, an average single income earner will qualify to purchase up to a 4-bedroom flat (non-mature estate), coupled with the potential upside in the resale market, it is not unexpected singles or more well-to-do families with single children will attempt to capitalize on this by balloting for larger flats and potentially taking away the opportunity for a young couple to start a family. 

This is by no means stating that singles should be treated any less equal given that we are all citizens and contribute equally, if not more, to nation building through taxes and other forms of services. 

However, how the government keeps public housing affordable is through management of supply of BTO and this increase in demand, the government has to make concessions to increase the annual supply, and given our land-scarcity, a sudden influx of demand will put more strain on our limited resources.

Town Planning

The Housing & Development Board (HDB) is Singapore’s public housing authority, plans and develops Singapore’s housing estates; building affordable homes and transforming towns to create a quality living environment for all. 

The needs of families and singles definitely differ just like how amenities currently differ between mature and non-mature estates already. Albeit a small issue, we are still tended towards possible imbalances raised to the town council to manage. 

Finding a Middle Ground

The setting up of HDB was one of ‘necessity’ to provide housing to the general population in the past. However, we are seeing a shift in the demographics of the citizens and as we adopt a more liberal view, a different set of societal issues have to be addressed and definitely not a simple one for HDB and the government to tackle. 

From our point of view, we do feel the government should review some policies but given the limitation of land resource and above points, we are definitely not in favor of too much relaxation of current policies as there will be detrimental impacts on public housing. 

Do check out our sharing of other real estate happenings in Singapore here.

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