Perceived Affordability of HDB Flats


According to one measure of affordability, our houses are less affordable than major cities like Sydney, Toronto, New York and even Tokyo.

The mainstream media and HDB have (unsurprisingly) claimed otherwise and probably will give 101 reasons to support their arguments.

More annoyingly, without much hint of sympathy, the media reported that “buyers can be narrowly focused” and even quoted MP Jessica Tan as explaining that “since a flat is not a small investment, these people tend to be more choosy.”

But are our HDB flats perceived to be affordable, especially by younger people who are struggling to look for a nice roof over their heads?

A forummer in Forums made some excellent points (thanks, Husky!):

“Our Government defines affordability as not using more than 35% of your gross monthly household income to pay for the monthly installment.

Let’s look at the scenario for typical young couple that have recently graduated from University and been working for 2-3 years.

Combined monthly income: $7,000, take home pay = $5,600 (80%)
Amount that goes to Ordinary Account: $1,610 (23%)

Suppose they buy a flat at $600k. After emptying their Ordinary Account, they have to take a loan for $520k @ 2.6% over 30 years.

Monthly Payment = $2080 (about 30% of their gross household income)
From CPF, we have $,1610 (23% of gross income)
Cash Top Up: $470

Take home pay of the couple after topping up the cash component
= $5600 – 470
= $5,130

Sounds quite okay…

But… what if say, the wife kenna retrenched one day or wants to be a homemaker. Leaving the husband to finance the flat alone. Assuming the husband earns $4k monthly.

Monthly Payment = $2080
From CPF, we have $920
Cash Top Up: $1,160

Take home pay of the couple after topping up the cash component
= $3,200– $1,160
= $2,040

Is it a “comfortable” figure? We will come back to that again in a short while.

What HDB might say in response to my post…

1)They can always buy a cheaper flat.

The truth is there ARE flats costing more than half a million that are supposedly meant for applicants with household income below $8k. And if a couple earning $7k can barely afford it, who can?

2)Why do you assume they will get retrenched along the way? Why plan for an event that may not happen? If you think like that, you will never be able to afford a flat.

I am sure if you drive, you do keep a spare tyre in your car boot. No?

Further more, it used to be that households with a single income earner were able to finance a flat alone. The figures show clearly flats are no longer “as affordable”. I just hope our government will acknowledge it instead of dismissing our concerns with a wave of the hand.

The government is always telling us the importance of having children, staying near your parents and supporting them etc. We must also try to save and plan for retirement. Seems like mission impossible in Singapore nowadays. How to do that with $2,040? One of my friend told me he’s planning to get a car, cos his mother is getting old and he’s also expecting a 2nd child. I told him to forget about it. If the young couple in our example has a family car too, they have like $1,000 left per month!

3)Look, there are flats that cater to different budgets. We are going to repeat ourselves again, just get a cheaper flat! Maybe at a less central location. Don’t be picky!

Yah… we are going to buy something that will take us 30 years to finance. And we are not supposed to be picky… hmm… For Pete’s sake, we are not buying vegetables at the market, if the vegetables don’t taste good, just throw!

The reason why I am looking at flats in central location is because, my family lives at Toa Payoh, while my fiancee’s family stays near Outram. I just want a place near to them.

I am not looking at buying a luxurious condo. I just want a simple 4 room flat that is near to either on of our families! Is it too much to ask for?”


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  1. The truth of the matter is, HDB flats these days are valued based on past inflation rates. Hence, an S$80k 5 room flat purchased approximately 30 years ago will cost S$400k. The whole irony of it all, is that Salaries on the other hand, have not gone up as much as the Cost of Living in Singapore. I hardly believe that HDB will take such a “macro” view in the equation, and see their role in determining the cost of living in Singapore vis-a-vis the HDB flats affordability.

    What the HDB did not or failed to do, was to review the maximum household income criteria and make a public announcement over their findings. Hence, there’s alot of negative sentiments over the conduct of HDB when homeseekers made such concerns known.

    Besides the HDB, the National Wage Council should re-examine its role in allowing affordable home ownership as well.

  2. husky’s illustration is excellent! getting a more affordable flat is something that has been suggested by the govt.

    However, many criteria wasn’t considered. On one hand, I want to stay near my parents, on the other side, I want to get an affordable house. And again on another side, I want to have kids.

    1) My parents and I are staying at Tampines (4-room flats) at the moment. And as many people will know, Tampines flats are awfully expensive now. Even a 3-room flat will cost near to $300k on the resale market. How about staying together with parents? I will love to do so, but when there’s kids in the future, a 4-room flat is definitely going to be like a jam-packed house.

    2) Getting an affordable house will mean I’ve to look for somewhere beyond Tampines. That will means I’ve to stay a distance away from my parents.

    3) Govt encourages us to have kids. Having kids = additional financial requirements. Yes, with a combined household income, it’s possible to finance a house and have kids. But still, as what husky mentions, few years down the road, if the household income became halved due to retrenchment, etc, it will be very tough on us.

    While I may have dwell away slightly from the topic of HDB flat affordability, the key takeaway, in my opinion, is that the 35% benchmark do not seem to take into consideration both tangible (having kids, saving for retirement) as well as intangible (staying near parents, retrenchment/paycut) factors.

    The monthly instalment for HDB loans are fixed, but our salary security are not. Cheers! Comments are welcome 🙂

  3. Its really take some attempts to get a flat these days. The demand far outstrips the supply. I am hoping that couples do not wait to get a flat before deciding when to get marry. The chance will be that they may be going to wait a long time if they do that. Couples shall get married, then buy a flat, in the interim period before getting a flat, couples shall explore options like renting a flat to stay together or staying with parents, while proactively seeking out a flat. I have heard so many stories of couples waiting to get a flat before married only to find time has passed and ultimately they cannot wait and have to buy a resales flat. There is also the fact to note that fertility of couples decrease with time, hence marriage should take precedence over buying a flat.

  4. Personally i find the article amusing. Lets have a realistic and balanced view instead of making statements that are so one sided.

    If one is so insecure about his or her job then go rent a flat. We have a choice, no one is stopping us.

    Its all about supply and demand and market efficiency. Given the example of a 7k household income. Have we spare a thought for the older generation where most of them barely even have a 2-3k household income? This generation of Singaporeans are usually home owners and their homes are their only investment that will see them thru their retirement age.

    You are asking the government to devalue the price of the property of these people just to satisfy the selfish needs of some youngsters who can afford to waste their money on Iphones and restaurant dinning?

  5. If you cannot afford a home in Tao Payoh or Outram, get a cheap one in Woodlands, Yishun or Jurong West.
    No one will stop you from upgrading once you can afford to do so.

    Lets just be realistic.
    Who does not want to have high wages and low living cost? The question is can we do so?

    The other thing that irks me is that while everyone is complaining about the risen cost….. i still see people spending on luxury items. So much to the extend that people now deem mobile phones and Air conditioning as necessities????

  6. market, i agree with your observations. ppl are taking things for granted and high standards of living as a need or even worse n entitlement.

    if we were to travel to developed countries, we can see how things work. if you can afford it, you stay within the city central, pay the exhorbitant rates for a tiny apartment but stay within 30minutes to city central.

    if you cannot afford it, working on normal average fixed salary, you chose to rent a small room in city or get a place away from city. some folks i know drive 1hr, some take 45mins train direct rides and some take 1hr bus direct rides to work in city centre.

    moral of story, if you can afford it buy it if not stop complaining and get what u can afford.

    however, im disappointed by HDB’s method of valuation. if market for private housing are high, do not build HDB right in city central and try selling them at near private prices for public housing. it creates a wrong sense of identity. HDB was created to provide affordable housing and most importantly a home ownership for each and every Singaporean. Blatant Price discrimination does no credit to HDB.

  7. i guess at this rate we may end up like the Hongkongers – where a full 5 head family stays in a 800 sq ft apartment due to the cost – it is not uncommon and as Singapore becomes more and more saturated, there is no escaping from this inevitable truth. The government may put in measures, but these only buy time…
    even condos are heading along with this trend, with more and more pint-sized studios coming up…

  8. then we might as well migrate to HK and become chinamen once again like our ancestors, since at this rate living conditions here will soon be same as in HK, but it’s a much more vibrant city over there with up and coming macau, shenzhen and guangzhou as hinterlands. it’s a huge land of opportunities there, whereas here it’s a land of boredom, strict rules and freedomless confinement.

  9. Have you visited HK in recent years? It’s jam packed with mainlanders everywhere. Try going to Disneyland and Ocean Park during their yearly golden holiday season during the first week of October. I’m sure you’ll ‘enjoy’ the company of your fellow brothers and sisters. Not all of them are as impolite and uncouth as depicted in the media. 🙂

  10. living cost in Hong Kong is not low either, we shd try to appreciate what we and make the most of it.

    i recently purchased a flat at punggol precisely becoz it is affordable and within my budget, despite having to wait as it is a BTO. Even tho our parents are staying in the East we have decided that having a house we can afford far outweighs the distance from our parents. We will have to make an effort to send our kids there in the mornings and pick them up after work.

    I guess nothing is perfect we just have to make it work.

  11. 20yrs ago i started work as an engineer, the basic was 2.5K than a 5rms HDB cost 7+k. Now
    a fresh grad engineer basic is still about 2.5k,
    and 5rms HDB is 2++K. The increase is 300% to
    400%. Sad to say our pay did not go up that much.
    try working hard to catch up.
    Our minister said we have rise standard of living,
    we have HDB by the sea, by the lake, by the river,
    …”so it has to cost us $$$” in the first place
    what is wrong with the old type of HDB. i wanted
    roof over my head..not a sea view or whatever
    view. some might say that we have to improve, yes
    true, leave those good view to private and make
    it a subsidised housing and not a disount housing.

  12. No, its not too much to ask, have you tried buying a flat at Everton Park? Its pretty cheap…and near outram too. And I’m sure you don’t have to pay over 500k for a 4-roomer there.

    You’re just hoping someone will pity you and sell you something cheap. Everyone wants to stay near their parents who live in central, but who’s going to stay in Jurong or Woodlands? Eventually your entire families will get to stay in central while others are forced out to the corners of Singapore? I think you’re just a selfish person venting your anger over something that everybody else wants as well.

  13. Govt will not do things less beneficial for themselves…but cannot blame them…if we call the shots….guess will do the same too.

    HDB expensive….take it or leave it
    Low fertility….singaporeans dun give birth ,we take in more foreigners..simple as that

  14. with more foreigners, we face more stress, lagi no time to have children. then they’ll import more and more, ultimately replacing all of us. and singapore will earn the honour of being the world’s most cosmopolitan international city without any citizen. 🙂

  15. even tho u blame foreigners for everything, jkk mentioned that salaries have been stagnant for 25 years. long before globalization or influx of foreigners. if it makes u feel better to blame others for HDB fiasco, well n good. but i think foreigners are just one tiny bit of a problem. the real problem is the lack of ambition or whatever.

  16. not 100% accuracy. Salaries have been stagnant specifically only in some sectors, i.e. engineering and manufacturing. There are sectors which are steadying improving in terms of wages, i.e. finance.

    Housing across the board, on the other hand, has shot up astronomically in the past few years and nobody can deny that one of the root causes is due to the influx of these PRs,foriegners and new Singaporeans in recent years.

  17. I think the core of the problem is not so much the influx of foreigners, but the influx of foreign money! It is so easy for foreigners to launder their money by investing it in Singaporean property, especially HDB because it is officially government protected and easy to rent out because of its affordability. There are hardly any checks on where the money came from or if the people really life in their HDB flats.

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