Housing policy changes benefit singles who want to live near parents, but some say more can be done

SINGAPORE: Ms Carolyn Tan, who is in her mid-40s, wants to have her personal space but also wants to live near her elderly mother in Aljunied.

Ms Tan recalls that when she went to the Housing and Development Board (HDB) to ask about applying for a flat as a single, she was told to get one in a new development in Tengah. So she is glad that in about a year from now, she can apply for a Build-To-Order (BTO) flat in a more central location.

"I'm quite relieved. At least I can apply for a flat nearer to my mother," she said. 

This comes after major changes in public housing policy, which Prime Minister Lee Hsien Loong announced on Sunday (Aug 20) at the National Day Rally.

For now, whether it is getting a new flat from HDB or buying one on the resale market, singles have to be 35 or older. Singles also cannot earn above S$7,000 (US$5,200) to apply for a new BTO flat, and they are limited to only two-room units. There is currently no income ceiling or size restriction when they buy resale flats.

Even if one meets the income ceiling criteria, singles can only apply for two-room BTO units in non-mature estates – a bugbear for those who want to stay near their parents living in mature estates.

This will change next year, when singles can buy from HDB two-room flats in any BTO project. At the same time, HDB will no longer classify estates as mature or non-mature.

Instead, BTO projects launched from the second half of 2024 will be known as Standard, Plus or Prime.

The bulk of HDB’s flats will be Standard flats with the current subsidies and restrictions, including a minimum occupation period of five years. 

Plus flats, which will be in "choicer locations" such as near an MRT station, will have more subsidies from HDB but also more restrictions. The minimum occupation period for these flats will be 10 years, and there are tighter resale conditions.

Prime flats will have the same restrictions as Prime Location Housing projects, which were introduced in November 2021. These include the 10-year minimum occupation period and a clawback of subsidies on resale.

Singles currently cannot buy resale flats in Prime Location Housing projects, which are near the city centre. However, the policy has been adjusted to allow them to buy two-room Prime resale flats in the future.

Singles will be able to buy resale Plus flats of any size, subject to an income ceiling of S$14,000. For resale Prime flats, the income ceiling is S$7,000.

When announcing the changes, the Prime Minister noted that more Singaporeans are choosing to remain single. 

Over the years, the government has tried to cater to this group by relaxing the rules for singles to own HDB flats, but they still face more restrictions than married couples or families.

Property analyst Lee Nai Jia said that a significant portion have caregiving responsibilities for their elderly parents, which means they should ideally live near each other.

As singles get lower subsidies to buy a resale flat, they could have been priced out of getting a home near their parents, especially if their parents live in central areas, said Dr Lee, the head of real estate intelligence, data and software solutions at PropertyGuru Group.

"In light of these challenges, the newly introduced policy is poised to alleviate demand pressures for BTO flats among singles," said Dr Lee.

When the changes kick in, he projects a "discernible uptick" in application rates for two-room residences within the Prime and Plus category, driven by single applicants.

But analysts and housing agents do not foresee a disruption in the resale HDB market.

Mogul.sg chief research officer Nicholas Mak said that singles make up a small minority of buyers of resale HDB flats.

"Even if some singles switch from buying resale flats to applying for BTO flats, the numbers will be too small to adversely affect the HDB resale market," he said.
 
Those that will continue to buy from the resale market include singles who want HDB flats that are larger than two-room flats, and those who cannot or choose not to wait for the BTO flats, which could take a few years to construct, Mr Mak noted.

PropNex CEO Ismail Gafoor welcomed the changes but said that policies could be further relaxed. 

"We believe, however, there may be scope to further relax the policy to allow singles to buy three-room BTO flats in any location, as some of them may find a partner and get married later in life, or may need more space given flexible work-from-home arrangements," he said.

Mr Lee Sze Teck, Huttons' senior director of data analytics said that in addition to not being offered larger flats, singles may be disappointed as the age limit of 35 years old was not lowered.

That's the case for one single who is in a quandary because she does not meet the age to buy a flat.

Ms Jessica Wong, 34, said it was "commendable" that the government was making an effort to meet the housing needs of singles but it does not solve her urgent housing need due to her family situation.

"I am being chased out of my family home this year," she said. "My dad is telling me I have to move out."

Ms Wong, who works in the food & beverage industry, has to wait a year before she can apply for a new flat or buy one on the resale market, but said that condominiums are out of her reach. When she wrote to HDB asking to waive the age restriction, she was rejected.

HDB in its reply to her, dated Jul 28, said: "While we understand your desire to buy a flat on your own, we regret that we are unable to accede to the appeal. Meanwhile, you may consider staying with your friends or relatives, or renting a room/flat from the open market."

She feels that these housing restrictions make her feel "less important" than married couples and less rooted to Singapore.

"If they had lowered the age restriction for resale, I could have started looking for an HDB and be on my home ownership journey much earlier," she said.

"Now I’m delayed compared to married couples and I have to look at another 20 to 30 years to pay off my housing loan, which will affect my retirement plan as well."

Dr Lee thinks that in the middle term, a larger supply of two-room flats or other forms of housing, such as co-living, may be needed as the number of singles is expected to grow.

"However, governmental agencies must strike a balance. On the one hand, they must address this burgeoning demand, and on the other, they face tangible supply limitations, primarily driven by land scarcity," he said.