A consumer sentiment survey released by the property website for the first half of the year revealed that 55% of Singaporeans are considering delaying their home purchase until prices stabilise. Of those who are still considering entering the market, 31% are considering buying a pre-buy HDB flat, which is 15 percentage points more than the same period last year.
The second half of last year also saw an increase of 15 percentage points over the first half of last year, to 57 per cent, in the number of respondents who considered property to be expensive or too expensive.
In February, all five pre-buy HDB developments with three or more bedrooms had a first-time buyer take-up rate of 1.7 or less for at least one type of home.
This means that with less than two applicants per flat, first-time buyers applying for these flats have a good chance of being invited to select a HDB flat.
The median application rate for first-time buyers of 3-bedroom and above was 1.8, the same as last November's sales activity, although there was twice as much supply in the latter month as in February this year.
Figures show a gradual increase in the average price of pre-buy HDB flats, although the affordability of young buyers has remained stable over the past seven years. However, experts believe that the trend of inflation and interest rate environment will affect the affordability of the country's home buyers.
The average salary of a local university graduate in 2021 is $3,800, and the median price of a four-bedroom HDB flat or larger is $456,500.
The house price to income ratio in 2021 is 4.98, which means that a home is affordable if it is not more than five times the annual household income. Including a 3% salary increase, the ratio in 2022 is 4.86, which is more affordable.
The reason why HDB flats are more affordable than resale flats is that they are subsidised by the government and prices have remained relatively stable.
In non-mature locations such as Tengah, Choa Chu Kang, Punggol and Sengkang, the price to income ratio has remained stable over the past seven years.
Similarly, the price to income ratios for three- and four-bedroom flats in mature locations have remained stable over the past seven years. However, the price to income ratio for five-bedroom flats has increased from 6.6 to 7.44, making them less affordable for young people.
Fewer five-bedroom HDB flats are being built than demand, as most new BTO homes are four-bedroom and fewer are five-bedroom.
Nevertheless, the house price to income ratio in Toa Payoh, which is also located in an established area, has slipped from a high of 5.99 in November 2020 to 5.21 in May 2022, which experts believe is related to the proximity of pre-built projects to MRT stations or community facilities.
According to the Ministry of National Development, for each of the 10 years from 2011 to 2021, between 84 and 90 per cent of applicants for pre-purchase of HDB flats were local citizens, while the rest were households comprising local citizens and permanent residents.
Between 65% and 83% of resale HDB flat purchasers are local citizens, a proportion that is also increasing year on year, with at least one member of the family being a permanent resident among the remaining applicants.
The figures also show that the number of permanent residents buying resale HDB flats fell from 27% in 2011 to 7% last year. This may be attributed to the government's policy in 2013 of requiring buyers to wait three years after obtaining permanent resident status before buying a resale HDB flat.
This year, about 6,500 elderly people aged 55 or above applied to HDB for two-bedroom flexible flats, of which about 30% were unsuccessful in their applications for HDB flats. These elderly people applied through pre-purchase of HDB flats and the sale of surplus HDB flats, and about 80% of them had received at least one home purchase allowance.
In addition, the majority of unsuccessful applicants for two-bedroom flexible flats applied for surplus HDB flats. Given the high demand and limited supply of these flats, older people are encouraged to consider applying for pre-purchase HDB flats, which have a lower take-up rate, to increase their chances of success.
For rental HDB flats, about 6% of rental HDB households faced a rent increase when they renewed their tenancies last year. This percentage will be 15% between 2016 and 2020.
Between 2017 and 2021, 85 per cent of households facing a rent increase will see their rent increase by $200 or less. In total, 7,500 rental HDB households will end up owning their own home between 2012 and 2021.
