Sixty years ago, when Singapore gained independence, it was one of the poorest cities in Southeast Asia. Three-quarters of the residents lived in crowded and squalid slums. These ramshackle houses, with tin walls, were called squatters.
Today, Singapore is a wealthy, modern city where about half of its 6 million people live in elaborate, high-rise apartments built by the government. These government-subsidized apartments are often bright and airy, contrary to the perception of most public housing projects. Most of the apartments are actually owned by the occupants, a testament to their affordability.
But in the past 15 years, the price of secondary market 80% surgeAs of early May, 54 of the units were selling for more than 1.35 million Singapore dollars, or $1 million. The units are sought after because they are spacious, well-located and cheaper than private apartments of similar size.
While these million-dollar apartments make up only a small fraction of all transactions, they still catch the eye of many Singaporeans and heighten concerns about housing affordability in one of the world’s most expensive cities. Some residents also worry that the value of their apartments will fall because they are leased on 99-year leases and must eventually be returned to the government.
Here’s what you need to know about Singapore’s public housing system.
They encourage conversation among neighbors.
Singapore’s Housing and Development Board has built hundreds of thousands of apartments in housing projects over the years. These developments are organized into “new towns,” self-sufficient communities with restaurants, shops, schools and religious institutions. The town center usually has a clinic, bus terminal, MRT station or shopping mall.
Singapore builds and sells a variety of apartments, known as HDB flats, to suit the needs and budgets of different families. The buildings vary in height, but typically, the size of the flats ranges from 32 square meters (about 340 square feet) to 130 square meters for a three-bedroom, two-bathroom flat. There is also a four-bedroom, three-bathroom flat of 115 square meters suitable for multi-generational families.
Many owners are very proud of their homes and their interiors are often featured in Singapore’s interior design magazines.
The apartments stretch along a wide corridor that divides the units into groups of six to eight to encourage interaction between neighbors. The ground floor of each block features a “gap,” an open space where children can play hide-and-seek and residents can interact with their neighbors.
The sites are clean and well-maintained, and old housing estates are regularly refurbished. “That is why our HDB housing estates, unlike public housing projects elsewhere in the world, have never turned into slums or ghettos,” said Lee Hsien Loong. Resigned as Prime Minister he said this in his last major address to the nation this month.
But ministers have previously made it clear that upgrades to facilities such as elevators depend on the electoral support of the People’s Action Party, which has ruled Singapore since independence.
They have a stake in the success of the country.
Singapore began building subsidized housing in the late 1940s. Over the next decade, it built 20,000 subsidized flats, but these barely met the needs of its population of about 1.6 million, who were still living in illegal housing. After the Housing and Development Board was established in 1960, another 31,000 flats were built.
In 1964, the government launched the National Home Ownership Scheme, which became the cornerstone of Singapore’s public housing policy. Singapore’s founding father, Lee Kuan Yew, believed that owning a home would give every citizen a sense of belonging in this immigrant nation with no shared history.
A few years later, to help more people own homes, the authorities allowed citizens to use savings from the government retirement fund to pay for down payments and monthly mortgage instalments on flats. Other schemes and grants were introduced to help low-income families. By 1985, almost every Singaporean owned a home.
The government is working to improve affordability.
Last year, the government introduced more housing subsidies to help first-time buyers and families buy homes in the secondary market. Current Prime Minister Lawrence Wong acknowledged at the time that some Singaporeans wanted to buy secondary flats as their first homes but found the prices too high.
To address the high demand for well-located apartments, former Prime Minister Lee Hsien Loong announced last August that the government would implement new rules to restrict sales. The rules will take effect in the second half of this year. Owners of the apartments will be able to sell only after living in them for 10 years. In addition, the government will impose income caps on buyers in the secondary market, in line with restrictions on buyers of new apartments.
Singapore’s Housing and Development Board said in a statement that three rounds of cooling measures implemented since 2021 have caused resale price growth to slow to 4.9% in 2023, compared with 10.4% in 2022. The board said it expects the housing market “to continue to stabilize in the coming year” as there is ample supply of new homes.
Few buyers are willing to pay large amounts of cash.
The government usually proposes new projects and then holds a lottery for potential buyers. These flats are called “build-to-order” (BTO) flats, and demand often outstrips supply. Successful applicants can choose the location and size of the flat at the proposed site. Construction begins when buyers sign up to purchase about 70% of the units. Last year, the average wait time for a flat to be ready was three years and 10 months.
Since many Singaporeans use savings from the government retirement fund to buy homes, few need to come up with large amounts of cash. Eligible first-time homebuyer households can receive housing grants of up to 80,000 Singapore dollars (about 60,000 U.S. dollars), depending on household income.
A two-bedroom flat sold by the Singapore government in the west costs about 202,000 Singapore dollars (150,000 US dollars) (before subsidies).
There are restrictions on buyers.
The Singapore government uses public housing incentives to encourage family formation and racial integration.
The government has set strict rules for who can apply for BTO flats, namely: heterosexual Singaporean couples who are married or engaged; couples with children; couples who want to live with their parents; and orphaned siblings. Buyers of these flats must live in the flat for at least five years before they can sell it.
For years, the government did not allow single people to buy such apartments, but gradually relaxed the rules over time. In August last year, Mr. Li said that from the second half of this year, single people over 35 years old can buy a one-bedroom apartment anywhere. Previously, they could only buy in a dozen developments with fewer facilities.
In 1989, the government enacted a policy requiring each block or neighborhood to have a minimum quota of residents from the city’s major ethnic groups (Chinese, Malays and Indians) to prevent the formation of ethnic ghettos.
Current President Tharman Shanmugaratnam said in 2015 that the “natural functioning of society” can lead to “mistrust, discomfort and prejudice, as we see in many countries around the world today.”
He added: “Singapore’s most intrusive social policies are also its most important policies.”
“Once people live together, they’re not just walking down the hallway together and riding the same elevator every day,” he said. “Their children go to the same kindergarten and the same elementary school.”
