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REHDA visit to Singapore - HDB flats are priced based on affordability

Updated: May 30, 2023

29 May 2023 – Best view with desktop

Representing YMFH visiting Singapore study tour

Earlier this month from 2 May to 5 May 2023, I had a privilege to attend a Singapore real estate study trip organised by REHDA Institute Singapore Master Class and Tour. I was representing Yayasan My First Home (YMFH), which sponsored the trip, to learn the best practices on affordable housing in Singapore. I am truly grateful and thankful to YMFH for this opportunity.

The delegates visited 9 sites namely Housing Development Board (HDB), HDB newest township’s Punggol Northshore Residence, Building & Construction Authority (BCA), Coliwoo – one of largest communal co-Living accommodation operator, National University of Singapore (NUS)’s Net Zero Energy Building (NZEB), Sungei Tengah (ST) Lodge – the largest dormitory for migrant workers, CapitaSpring – an integrated commercial development with 4 storeys of greenery and trees, Park Nova – Ultra high end condominium and Autodesk – a multinational Construction Cloud software provider.

This article focuses on the best practice of the newest trend and development of HDB.

Singapore government financed public housing up to SGD 4,376 million in FY 2021

I believe Singapore government not only considers homeownership as merit good but make it a top priority to implement it even at a deficit of SGD 4,367 million in fiscal year (FY) 2021 (up from FY2020 at SGD 2,346 million).

Singapore HDB - Expenditure Breakdown FY 2021

Back track since inception in1960, the public housing authority HDB, were tasked to providing sanitary living conditions replacing the unhygienic slums and crowded squatters. As of date, HDB has built 1.2 million flats with 80% ownership. The accomplishment of HDB features;

  1. 23 township and 3 estates where the latest township in Punggol, located north east of the island

  2. HDB is heavily funded at SGD 4.36 billion FY2021 (4.2% budget of SGD 105 billion) . HDB buys land from Singapore Land Authority (SLA), the custodian of State Land.

  3. The example of cost breakdown in 2020-2021 FY of 13,506 units where the total development cost of SGD 5.35 billion with the largest cost component was land at 60%

    1. Land cost 59.2% SGD 3,170 million

    2. Building cost 38.8% SGD 2,080 million

    3. Other cost 2.0% SGD 102 million

    4. Total cost SGD 5,352 million

Singapore HDB - Development Cost Breakdown FY 2021

From the estimated collection from sales of 13,506 unit, HDB net sales would be SGD 985 million (i.e. SGD 5,352 million less SGD 4,367 million) .

Singapore new HDB are priced based on affordability (and not on cost)

HDB flats affordability are priced based on market value (i.e. prices of resale flats, market conditions and attributes of the flats). The market discount (i.e. pegged to household income) is then applied to price of the flats. The success are attributed to pragmatic implementation with Whole of Government amongst the agencies approach and enforcing the key criteria (KC) based on Mortgage Servicing Ratio (MSR);


​Mortgage Servicing Ratio (MSR) criteria


​Median monthly household income was SGD 8,500 (2022)


House price to income ratio less than 5 (not more than SGD 510,000) - 4-room flat (3 bedroom)


​Buyers used typically 25% of monthly income to pay instalment


Eligible first-timers gets housing grants of up to $80,000

Singapore HDB - Mortgage Servicing Ratio (MSR)

  1. MSR – Median (above & below) and compared to flats type where

    1. The median monthly household income was SGD 8,500 in 2020

    2. House price to income ratio less than 5.

    3. Buyers used typically 25% of monthly income to pay instalment

    4. Eligible first-timers gets housing grants of up to $80,000

    5. In 2022, median prices of Build-To-Order (BTO) flats in non-mature estates

      1. $228,000 for three-room flats (2 bedroom)

      2. $347,000 for four-room flats (3 bedroom)

      3. $473,000 for five-room flats. (4 bedroom)

    6. Average waiting time between 3.8 to 4.5 years (2020 and 2021)

    7. Sales gallery and virtual tour are easily accessible

      1. 2-room flexi (1-bedroom, 38 m2 and 47 m2)

      2. 3-room (2-bedroom, 68 m2)

      3. 4-room (3-bedroom, 93 m2)

      4. 5-room (3-bedroom, 115 m2)

      5. 3Gen ( 4-bedroom,120m2)

Source - Flat layout sources (HDB Alkaff Oasis example)

Cumulative Singapore government grants to the HDB since 1960 stands at SGD 42.97 billion

As homeownership is considered merit goods where deficit at SGD 4,367 million in fiscal year (FY) 2021 comprised

  1. additional Build-To-Order (BTO) projects (i.e. 17,322 units across 4 sales, land cost (purchased from state at fair value of up to 60% of total cost, construction cost up by 30%)

  2. more subsidies and grants disbursed to buyers

Malaysia revised 2023 direct budget for affordable housing at RM 2.2 billion

The10th Prime Minister Datuk Seri Anwar Ibrahim unveiled 2023 budget allocation of RM388.1 billion with RM 2.2 billion allocations (0.56% of annual budget) for affordable housing with an increased from RM 1.2 billion (0.37% of annual budget) for 2021 with the following programmes as listed below on left column


​2023 at RM 2.2 billion (by 10th PM)

(0.56% of total RM 388 budget)

2021 at RM 1.2 billion

(0.37% of total RM 322 budget)


RM 389.5 million to build People’s Housing Project (PPR) and People’s Rented Housing Programme

RM 500 mil for 14,000 low-cost home units under the Ministry of Housing and Local Government


​RM 358 million to build 4,250 Rumah Mesra Rakyat units

​RM 315 million for 3,000 units (RM 315 million) of Rumah Mesra Rakyat by Syarikat Perumahan Negara Berhad (SPNB)


​RM 463 million to build Malaysia Public Housing Project (PPAM)

RM 125 million to maintain low-cost and medium-low stratified housing


​RM 460.2 million for building new and renovating houses in rural areas

RM 310 million to repair existing units for the Malaysia Civil Servants Housing programme (PPAM)


More than RM 500 million to maintain Rumah Keluarga Angkatan Tentera and repair the living quarters and institutions under the Ministry of Home AffairsIn 2021


​RM50 million to repair run-down lifts in low-cost strata houses


7 million units of affordable houses for armed forces under Satu Anggota Satu Rumah programme (SASaR)

Affordable housing programmes announced in budget 2023 and 2021

My take away is there are more for Malaysia to take the financing best practices from Singapore to allocate more, improve and implement affordable housing from the Whole of Government approach as housing is merit good and basic need for general Malaysia population. For more information, see previous article on The Malaysian tripartite economics of affordable housing (click here).

For more information, contact

About Yayasan My First Home (YMFH)

Yayasan My First Home (YMFH) is a charitable foundation established as a public company limited by guarantee incorporated under the Companies Act 2016 on 23 December 2021. The Foundation will serve as a singular touch point and facilitator to bring together all the various stakeholders, including developers, financiers, donors, NGOs, the relevant Federal and State agencies and other interested parties in a combined and holistic effort to meet our primary goal of promoting and facilitating the development of affordable housing and home ownership by the B40 group.


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