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Commentary: Keeping public housing in prime locations like Greater Southern Waterfront affordable and fair

To help low-income families afford those flats, while avoiding the lottery effect, consider awarding a housing grant tiered by income level, with levies to recovery subsidies depreciating over time, says NUS’ Dr Sing Tien Foo.

SINGAPORE: Singapore’s public housing model is changing.

During the early years of the country’s independence, the national goal was largely an operational one in ramping up construction to provide living spaces for growing numbers of families and resolve overcrowding.

Over the decades, a conscious belief that building a nation of homeowners would be the best strategy to give Singaporeans a stake in the nation and strengthen retirement adequacy took root.

And in the last 20 years, the national conversation has shifted towards how public housing goals can fulfil new aspirations while keeping homes affordable. New models like the Design Build and Sell Scheme and Executive Condominiums were rolled out.

More recently, public discussions have swirled around the subject of inclusiveness, with the announcement that spaces will be set aside for future public housing in the Greater Southern Waterfront, and how to keep such an exercise fair.

While many Singaporeans welcomed the redistributive aspects of this move so more Singapore families can afford housing in good locations, most have also cautioned against the lottery effect seen in past HDB projects.


Some years have passed since Pinnacle@Duxton was first built. Although the project was primarily intended to rejuvenate an otherwise ageing estate and attract younger families to the area, home buyers saw the potential of the place.

Given the attractive launch prices ranging from S$289,200 to S$439,400, the 1,847 units of 4-room units and 5-room apartments were oversubscribed by 2.7 times when launched in 2004. SARS may have dampened demand.

READ: Commentary: The future of Singapore housing is in bigger HDB flats

Still, competition for homes there was not as intense compared to two other BTO projects – SkyVille@Dawson and SkyTerrace@Dawson located in the mature estate of Queenstown.

The two projects designed by private architect, WOHA Architects, consisting of 1,718 units, were 12 times oversubscribed when launched in December 2009.

The more recent launch of the Dakota One BTO near the city fringe in August 2020, the demand was also overwhelming: 421 units were nearly 17 times oversubscribed, despite 4-room flats there starting at S$478,000.

There’s no denying owners of flats at Pinnacle@Duxton have seen huge financial gains, with seven selling their homes for more than S$1 million in 2020 alone, joining a list of almost 90 owners who have seen their apartments in the development go for above S$1 million in the resale market.

READ: Commentary: A look at HDB flat affordability after recent housing policy moves

Resale Public Housing Sales of More than S$1 million. (Graphic: Prof Sing Tien Foo)

Such trends have been underway for years since homes there met the minimum occupancy period (MOP) in 2015, the same year where nine owners sold their units for S$1 million or more. This looks set to continue.

Still, it’s worth keeping in mind record-breaking transactions that eschew market logic predate the young Tanjong Pagar development.

The first S$1 million HDB resale deal transacted in 2012 involved a high-floor, 17-year-old executive flat at Mei Ling Street in Queenstown. That same year, another 25-year-old executive apartment unit at Bishan Street 13 changed hands for S$1 million.

Listen to Prof Sing Tien Foo discuss developments in the property market since COVID-19 hit on CNA's Heart of the Matter podcast:


Residential property in Singapore has remained one of the brightest sectors that has weathered the COVID-19 storm, even defying real economic trends. This is good news in a nation where a vast majority own their own homes.

That, however, may be a double-edged sword if speculation pushes prices up to unrealistic heights faster than incomes can keep up with.

While many Singapore homeowners have increasingly come to regard property as an appreciating asset class, with financial gain as a key goal, the Government has taken pains to re-emphasise how keeping public housing affordable, accessible and inclusive must remain key objectives and policies are rolled out to reflect those priorities.

READ: Commentary: Why Singapore's private residential market will remain attractive in the long term

Cooling measures seeking to keep market sentiments in check and sustain modest price increases over the longer run are one reflection of this public policy aim.

Such considerations are also front and centre of public housing in the Greater Southern Waterfront. During the Committee of Supply speech in Parliament on Thursday (Mar 4), Minister for National Development Desmond Lee highlighted new ideas to leash future housing projects in prime locations, including limiting the sale of resale buyers, imposing a longer minimum occupancy period or restrictions on renting out such flats.

If left solely to the private market, prime areas such as the city centre and the Greater Southern Waterfront would likely be used for ‘exclusive, high-end housing developments’ that only the rich can afford, given their attractive locations.

He recognised that special provisions over that special segment of HDB flats are needed to avert unbridled profiteering while not losing sight of the desire to allow more Singapore households to live there.

But in doing so, the Government is also trying to strike a careful balance. With 4 to 6 per cent economic growth expected this year amid continued urbanisation, Singapore should expect more resale flats in good locations to attract good value, which is a positive development to be welcomed.

Desmond Lee in Parliament on Monday, Apr 4, 2020.

Market trends bear this out. Excluding DBSS apartments and HDB terraces, there were 218 flats with an average price of S$1.06 million that have been sold between 2012 and January 2021.


Some have asked whether Singapore should indeed set aside spaces along the Greater Southern Waterfront for HDB developments. Perhaps we forget Singapore’s public housing has prioritised affordability and accessibility for years.

Then Minister for National Development Khaw Boon Wan delinked Build-to-Order (BTO) flat prices from resale prices in 2011. This way, HDB can sell BTO flats at concessionary prices aligned with the median income of residents, buffered against rising land and construction costs, though this would incur a deficit on HDB’s books.

"(Being) led by the private sector (is like) a tail wagging the dog. We should be the price-setter, not be the price-follower," Mr Khaw said in a 2013 media interview.

READ: Commentary: Concerned about what fall in private home sales mean? Market fundamentals paint a different story

The challenge for the Government is deciding the shape and form of subsidies for such flats in the Greater Southern Waterfront, where land costs are also much higher, and how these build on existing help.

The Government’s financial support today already includes grants like the Enhanced CPF Housing Grant (EHG), which gives first-time buyers up to S$80,000 buying their first home, with support levels tiered by income and subject to an income ceiling of S$9,000. 

It also encompasses the Family Grant and Proximity Housing Grant of up to S$80,000 for resale flats when families want to live closer to each other.

These subsidies can be hefty and make the sum difference for lower-income Singapore households. As of February 2021, nearly S$500 million has been disbursed by HDB to 15,600 first timers through the EHG scheme.

Google Street View screengrab of the Pinnacle@Duxton.


In HDB’s current financing model, while the quantum of housing subsidies has not been revealed, the general public expectation is for subsidies to be skewed towards smaller housing types, to aid lower income families. Fairness is a key value driving such views.

For these reasons, homeowners who sell their homes are expected to return subsidies and pay resale levies since they have benefitted financially from subsidies.

These resale levies can be substantive, ranging from S$15,000 for 2-room flats to S$50,000 for 5-room flats and S$55,000 for executive condominiums.

Such a mechanism should be introduced and strengthened for living in the Greater Southern Waterfront. A new class of CPF housing grants, targeted at ensuring affordability for Singapore households, without artificially depressing prices could be considered.

This grant could be pegged to household income, given on top of the EHG to reduce upfront costs of such flats for low and medium-income households. It should be recovered by authorities when the home is sold.

READ: Commentary: Why living close to my siblings works for me

The levy could be reduced on a graduated time scale after an extended MOP, say 10 years, to encourage residents to stay longer and disincentivise selling for a potential windfall.


To be sure, this suggested measure in dampening the resale of new HDB flats in prime location must be carefully studied for potential effects, together with the suite of measures thrown up for discussion.

After all, selling flats with a shorter lease term could limit the sale prices of these BTO flats, yet could end up artificially depressing the prices of other flats in the surrounding neighbourhood.  

Extending the MOP could dampen speculative behaviour but the question remains what a reasonable MOP period is and whether that could also unnecessarily constrain homeowners who might need to move for a range of reasons, including seeking a larger apartment when new couples have more children or to be close to aged parents.

READ: Commentary: When Singapore homes become workspaces – huge changes in the house and beyond

Authorities should also consider whether an unduly long MOP period could adversely impact housing prices. This does not seem to be the case for Pinnacle@Duxton, where the highest priced unit was sold at S$1.258 million in 2020, some 10 years after the launch.

Singapore’s shift to provide affordable public housing in prime locations may be a costly move but could strengthen our overall housing social compact.

Mr Lee acknowledged in his speech that ensuring that housing affordability and inclusiveness over time, while not inducing excessive speculative behaviour in the search for a new housing model for HDB flats in prime locations, is a difficult balancing act.

But where Singapore families have embraced the long-held narrative of progressing as a nation, in moving from mudflats to metropolis, this move to give all households a shot at owning a home in the Greater Southern Waterfront could reinforce a sense of belonging for many more decades to come.

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Professor Sing Tien Foo is Director at the Institute of Real Estate and Urban Studies (IREUS) and Head of Department of Real Estate, National University of Singapore. The views and opinions expressed herein are those of the author and do not represent the views and opinions of the National University of Singapore or any of its subsidiaries or affiliates.

Source: CNA/sl


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