The headlines last month rang loud and clear. By the end of 2025, HDB resale prices are set to have risen for a record 23 quarters. That will see close to 6 consecutive years of resale prices going up and further up. HDB resale prices jumped 12.7% in 2021, 10.4% in 2022, 4.9% in 2023 and 9.7% in 2024. The projected increase for 2025 means that resale HDB prices would have risen since early 2020 by a cumulative 58%.
In April last year, the Minister for National Development said that the Government expected the property market to continue stabilizing. He noted that resale HDB prices had risen less in 2023 at 4.9% compared to 10.4% and 12.7% in the previous two years. At that time, which was a mere 11-odd months ago, the Minister attributed the slower price rise, which I should point out is still a significant price rise, to HDB having caught up on construction delays and a ramping up of BTO flat launches. Based on what the Minister said, a reasonable expectation would be for price rises to have slowed further in 2024. But then, the news in January this year was that in 2024, HDB resale prices climbed a steep 9.7%. This was despite cooling measures being introduced in August last year such as lowering the Loan-to-Valuation limit for HDB housing loans from 80% to 75%.
On another front, 2024 was an unusual year for Government Land Sales sites for non-HDB use. Last year, the Government rejected three tenders for three private residential sites because it deemed the sole bids for them to be too low. Partly because of this, land betterment rates for non-landed residential use sites dropped by an average of 5.4% for the half year from Sep 2024 to February 2025.
The Chief Valuer reviews the land betterment charge or LBC rates twice a year in March and September, and the rates can be a barometer of the Government’s assessment of land values and recent land sales. The Chief Valuer’s work on land not sold for HDB purposes is highly granular. There are individualized land betterment charge rates that reflect market sentiment for each of the 118 geographical areas in Singapore. For example, in March 2024, LBC rates were cut 19.2% for non-landed residential use in the Tanglin area but increased 14% in the West Coast/Clementi area. These numbers mirrored the differing market sentiment between suburban and non-suburban sites over the period from September 2023 to March 2024.
In contrast, the public knows far less about how land is priced for HDB BTO flats. What we do know is that land price for BTO flats takes reference from resale HDB prices. With a 58% increase in resale flat prices from 2020 to 2024, there is inevitably a serious concern about whether land for HDB BTO flats is priced sustainability or if ever-growing subsidies are going to be needed in future to make HDB flats affordable. It has been stated that the HDB pays fair market value which is determined by the Chief Valuer, and that the land price for public housing is lower compared to private housing in the same area.
However, there is no information available to the public about land prices for HDB flats similar to the chart like the 118-zone LBC chart which suggests how the Chief Valuer adjusts the fair market value of HDB BTO flats in response to rising HDB resale prices. There is a public demand to better understand and unpack the fair market value determined by the Chief Valuer for land reserved for the HDB.
Sir, what is stopping the Government from lifting the veil from this aspect of the Chief Valuer’s work? With well over 80% of all land in Singapore belonging to the state, there is deep interest in determining the sustainability and affordability of land prices for BTO flats for current and future generations of Singaporeans.
Can the Minister tell us how the Chief Valuer discounts the land sold to HDB, beyond the general explanation of market principles? How is this discount derived and what is its basis? Would the Government release zone-specific data on land values for land reserved for BTO flats over time? In connection with this, how does the Government assure the public and this House that it is not raiding the reserves when it prices land for BTO flats, when the only explanation the public relies on is reference to the unknown fair market value for HDB land. Could the Minister please address this too?
