Increased rental options & cooling measures to help S’poreans: Desmond Lee


The Government continues to watch and monitor the property market closely and takes action for Singaporeans when needed, said Minister for National Development Desmond Lee in Parliament on Thursday (Oct 20).   

Case in point 1: There’s temporary housing where couples can raise families while waiting for their BTO flats.

Case in point 2: It’s introduced cooling measures, helping to moderate demand.

These measures come against a buoyant public housing market.

The Parenthood Provisional Housing Scheme increases temporary housing options

The Parenthood Provisional Housing Scheme (PPHS) is available for people who are waiting for their BTO flat to, well, get that “B” in “BTO”.

It lets people rent a flat if open market rents are otherwise unaffordable.

This while the Government ramps up the supply of new flats to 23,000 a year in 2022 and 2023 — a 35 per cent increase from last year — as well as preparing to launch up to 100,000 new flats from 2021 to 2025, if needed.

In the meantime, the PPHS is a Government-support option for temporary housing.

Married couples, engaged ones and divorcees or widowed parents with children are equally welcome.

“Given the limited supply of PPHS flats, an income ceiling of $7,000 was introduced in August 2021, along with some of the criteria to prioritise those who are less able to afford renting on the open market,” said Minister Lee.

This $7,000 income ceiling pegs to the typical income ceiling for 3-room BTO flats in non-mature estates.

It is also well above the median monthly household income of PPHS applicants, “which was $5,700 before the income ceiling was introduced, and $4,400 in the past year.”

It’s not a hard-and-fast cut-off, that said. The Government knows that particular families will have particular pressures.

“Households whose incomes exceed the $7,000 ceiling, but will need help with temporary housing due to exceptional circumstances such as high medical expenses or other needs may approach HDB,” said Minister Lee.  

“HDB will consider the requests on a case-by-case basis.”

Cooling measures to help first-timers

Resale flat prices are up these two years, reflecting broad-based demand for housing and a previously-low interest rate environment.

“Sustained property price increases if left unchecked, could run ahead of economic fundamentals and increase the risk of a destabilising correction later,” warned Minister Lee.

“Which will adversely impact many existing homeowners.”

Hence the Government announcing in December 2021 cooling measures for the private residential and HDB resale markets.  

“In the immediate quarters following the implementation of these measures, the HDB Resale Price Index reflected a lower increase of 2.4 per cent in the first quarter of this year, and 2.8 per cent in the second quarter compared to 3.4 per cent in the fourth quarter of 2021,” noted the Minister.

“On Sep 29, 2022, HDB announced further measures to encourage homebuyers to exercise greater financial prudence in taking home loans as higher interest rates were expected over the medium term,” he added.

This included tightening the Loan-to-Value LTV limit for loans from HDB (now 80 per cent, down from 85 per cent) and raising the medium-term interest rate floor which calculates the Total Debt Servicing Ratio (TDSR) and the Mortgage Servicing Rate (MSR) for housing loans. It is now 4 per cent, up from 3.5 per cent.

HDB also introduced a 3 per cent interest floor for HDB loans which computes just how much someone’s allowed to borrow.   

These should moderate demand in the HDB resale market and slow the pace of HDB resale price increases, “but we will continue to monitor the housing market closely,” said Minister Lee.

In addition, there’s that new temporary 15-month wait-out period for people who are switching from private property to HDBs so as to to moderate demand and ensure that resale flats remain affordable for flat buyers, especially for first-timers.

Seniors aged 55 and above are not affected if they’re moving to a 4-room or smaller resale flat.

The Government hears people out on a case-by case-basis here too.

“HDB received some 650 appeals since the wait-out period was introduced. 220 of these home-seekers had obtained an option to purchase and buy HDB resale flats before the wait-out period was in place,” said the Minister.

“For these home seekers HDB has exercised flexibility and waived the 15-month wait-out period for all of them.”