Sim Ann responds to Leong Mun Wai: ‘Drastically lowering BTO prices… would hurt all Singaporeans’

In a Facebook post on Sunday (Dec 11), Senior Minister of State for National Development Sim Ann responded to PSP NCMP Leong Mun Wai, who had questioned whether Housing and Development Board (HDB) subsidies are “really very generous relative to land costs.”

In his widely shared Dec 8 post, Leong suggested that “land costs should be taken out of the picture” and questioned if Singapore’s public housing policy had lost its way.

Sim Ann addressed his points in detail, asserting that the Government has kept Built-to-Order (BTO) flats affordable and will continue to do so. She explained that Leong’s proposal to drastically lower BTO prices, even disregarding land costs, would have serious repercussions.

She highlighted that most BTO buyers use about four to five years of their total household income to afford their homes, while in other global cities, the home price to income (HPI) ratio ranges from “8 times to over 20 times.” Additionally, many BTO buyers service their mortgages solely through their CPF contributions, with minimal or no cash outlay.

Sim also pointed out that Singapore’s Mortgage Servicing Ratio (MSR) is lower than in other countries, where it typically ranges from 30 to 35 per cent, compared to 25 per cent or less in Singapore.

Referring to Leong’s suggestion, Sim noted that while the resale market has seen many homeowners profiting from higher prices, BTO pricing is already generous. She acknowledged that some may find Leong’s proposal appealing but cautioned that it might not truly benefit them.

One point of agreement between the two is that BTO pricing should account for location differences. However, Sim countered Leong’s idea of removing land costs from pricing, explaining that land values vary significantly across locations and are tied to Singapore’s national Reserves.

“Mr Leong is really asking for the Government to price BTOs much lower, regardless of the justification,” Sim wrote. While this is possible, she warned that it would come at the cost of other important public spending areas, such as education, healthcare, and security.

She added that by suggesting the Government charge HDB less for land, Leong is implicitly calling for drawing more from Singapore’s Reserves, which she cautioned against, as it would deplete the nation’s wealth for future generations.

Sim reassured Singaporeans that the Government remains committed to providing affordable housing options for eligible BTO homebuyers, and will continue refining policies to support families. However, she reiterated that disregarding land costs would “end up hurting all Singaporeans, instead of helping them.”