HDB Flats to Remain Affordable Amid Strong Supply Pipeline and Rising Resale Units

In a recent address, National Development Minister Desmond Lee reassured Singaporeans that Housing and Development Board (HDB) flats will remain affordable. This assurance is backed by a robust pipeline of new flats and an anticipated increase in resale units hitting the market in the coming years. As Singapore gears up for its general election, housing affordability remains a key issue for voters, and the government is actively implementing policies to ensure public housing remains accessible and within reach for Singaporeans.

Increasing Supply to Meet Housing Demand

To address housing concerns, the government has ramped up efforts to increase the availability of both new and resale flats. By January 2025, all 92 delayed BTO projects caused by the COVID-19 pandemic were completed, significantly boosting supply. Moving forward, HDB plans to launch over 50,000 new flats between 2025 and 2027, ensuring continued accessibility for Singaporeans.

In addition, the number of flats meeting their Minimum Occupation Period (MOP) and becoming available in the resale market will increase progressively:

• 8,000 flats in 2025
• 13,500 flats in 2026
• 19,500 flats in 2028

This growing resale supply, along with cooling measures, is expected to bring greater stability to the market.

Cooling Measures to Maintain Affordability

The government has implemented various cooling measures to prevent excessive price increases in the resale market. Since December 2021, four rounds of cooling measures have been introduced, including tightening HDB loan limits in August 2024. These measures aim to ensure affordability for buyers while preventing speculative price inflation.

While million-dollar resale flats have made headlines, they remain a minority. In 2024, only 3.6% of resale transactions crossed the million-dollar mark, often due to prime locations and desirable attributes. Minister Lee emphasized that 80% of homebuyers who collected keys in 2024 could service their HDB mortgage entirely with CPF, with little to no cash outlay—highlighting that affordable options remain widely available.

New Flat Classification for Long-Term Affordability

The recently introduced Prime, Plus, and Standard flat model is another step to ensure housing remains accessible for Singaporeans of different income levels:

• Prime and Plus flats, located near MRT stations and town centers, receive higher subsidies but come with stricter resale conditions, such as a 10-year MOP and a subsidy clawback upon resale.
• Standard flats retain the traditional five-year MOP and do not have subsidy recovery conditions.

This approach aims to maintain an egalitarian housing market by keeping flats in attractive locations within reach of a broad spectrum of buyers.

Upcoming Mount Pleasant BTO Project

In October 2025, HDB will launch the Mount Pleasant BTO project, which integrates new housing with heritage conservation. Situated on the site of the Old Police Academy, planners have worked with heritage experts and retired officers to preserve historical elements while developing new homes. This project is expected to offer Prime or Plus flats, balancing affordability with premium locations and historical significance.

Through these continued efforts, the government remains committed to making public housing in Singapore affordable, sustainable, and accessible to all.

Financial Tips for Home Buyers

With a more favorable housing market on the horizon, prospective buyers should still take steps to ensure they make sound financial decisions when purchasing their HDB flat. Here are some essential tips:

1. Plan Your Home Purchase Based on Affordability, Not Emotions

With an increasing supply of HDB flats, avoid making impulsive decisions based on market hype. While resale flats offer immediate occupancy, BTO flats typically provide better long-term value, especially with government subsidies.

2. Maximize CPF Housing Grants

Eligible buyers should make full use of government grants to reduce their loan burden:

• Enhanced CPF Housing Grant (EHG): Up to S$80,000 for first-time buyers.
• Family Grant: Up to S$50,000 for eligible resale flat buyers.
• Proximity Housing Grant (PHG): Up to S$30,000 for those buying near their parents.

3. Consider Waiting for More Resale Flats to Enter the Market

With more resale flats expected to hit the market in the next few years, waiting could mean securing a better deal. If you are flexible with your housing timeline, monitoring price trends before committing to a purchase may be beneficial.

4. Choose Your Loan Wisely—HDB Loan vs. Bank Loan

Home buyers should compare the two primary loan options:

• HDB Loan: Fixed 2.6% interest rate, requires lower cash upfront, and allows early repayment without penalty.
• Bank Loan: Lower interest rates (currently ~1.5–2%), but requires a higher initial downpayment (5% in cash and 20% from CPF savings).

5. Stick to the 30% Rule

Financial experts recommend that your monthly mortgage payments should not exceed 30% of your household income to ensure financial stability and sufficient funds for other long-term goals.

6. Stay Updated on Housing Policies and Market Trends

With elections approaching, new policies or adjustments to CPF grants and HDB pricing may emerge. Keep track of policy changes that may impact housing affordability.

7. Think Long-Term—Consider Future Resale Value

If buying a resale flat, evaluate factors such as location, proximity to MRT stations, schools, and upcoming developments that could impact future appreciation.

8. Use CPF for Loan Repayments—But Don’t Deplete It

While CPF can ease monthly cash outflow, avoid using it excessively. Preserving CPF savings ensures you have sufficient funds for retirement and medical expenses.

9. If Market Conditions Are Unfavorable, Consider Delaying Your Purchase

If prices remain high despite increased supply, consider alternatives such as renting temporarily while waiting for a more favorable market environment.

10. Protect Your Home Investment with Insurance

Owning a home is a long-term financial commitment. Ensure adequate coverage with:

• HDB Fire Insurance (mandatory): Covers structural damage.
• Home Contents Insurance: Protects renovations and belongings.
• Mortgage Insurance (HPS): Ensures loan repayment coverage in the event of unforeseen circumstances.