Is public housing in Singapore really an asset?

By December 17, 2019Current, Local Life, Perspectives, The Dive

TL;DR – You can game the public housing system – you just need to know how.

Public Housing in Singapore 

With a staggering home ownership rate of 91% in 2018 (up from 90% in 2017) in Singapore, it is no surprise that Singapore has the 2nd highest percentage of home ownership globally.  The city state’s philosophy with regards to public housing was always to provide quality and affordable housing for the nation and to this date, Housing & Development Board (HDB) flats are home to 80% of Singapore’s resident population.  

Established in 1960, HDB was given the task to transform “unhygienic slums” and “crowded squatter settlements”. Home ownership was at a low of 9%. Today, more than 1 million HDB flats have been constructed across 23 towns and 3 estates. 

Singapore as a “home-owning society” was a vision of our founding prime minister the late Mr Lee Kuan Yew, who firmly believed that that was a condition essential for political, economic and social stability. Letting Singaporeans “own” their homes would also increase their ownership towards their country as they now had a stake in nation building.  

The late Mr Lee Kuan Yew (MND Singapore Pinterest)


Financing a HDB flat 

One of the key pillars of Singapore’s public housing system is that it is to be affordable, within the reach of the majority of Singaporeans. To enable Singapoeans to better afford their homes, the Government started in 1968 to allow the use of savings from the Central Provident Fund (CPF) to service monthly mortgage instalments as well as lump sum downpayments. 

HDB also has grants made available for aspiring first-time home buyers: 

  • Enhanced CPF Housing Grant 
  • Family Grant
  • Proximity Housing Grant

HDB grants for first-timers (HDB website)

These grants are in place to help ensure HDBs remain affordable to Singaporeans. We speak to several people who have benefited from these schemes.

Steven’s story – 5 kids in a HDB  

Steven and Laifong bought their 3-room Ang Mo Kio flat 17 years ago at $90,000 (once they factored in the $30,000 first-timer housing grant and $10,000 proximity housing grant). They bought the neighbour’s 3-room flat when they were expecting their 4th child and even gave up on a BTO within the same area as the prices for both options worked out to be roughly the same cost. With 5 children between them, they knocked down the wall between the two units to create a jumbo flat with enough space for all. 

“We split the housing loan 50-50 and our CPF is 

able to completely cover it.” 

And so it is, even for the sandwhiched class with a big family, there are grants and options available to help households manage housing costs. Steven shared that for their housing loan, he and his wife split 50-50 and it is completely covered by CPF, freeing up finances for day to day expenses. They even budget for a yearly family holiday – Japan being their next destination. 

READ MORE:  Will I be able to afford to buy my own property?

 Jon’s story – Starting a family in a home of our own 

Jon and Felicia were very lucky, while most couples have to go through a few rounds of balloting, they got their home on their first try. Their lovely home is tucked away in a cosy corner in Bedok – Fengshan Greenville where the 4-room BTOs average about $400,000. As first time home buyers a few years ago, they qualified for grants and were able to get $15,000 shaved off the cost of their home. 

“It was a relief to be able to use our CPF to cover a good amount of the cost, instead of cash upfront. In fact, the loan is fully covered by CF, without the need for out-of-pocket cash. 

Jon shared that cash flow is important for young couples as well as for young parents, who would be saving up for their children’s future needs. For them, they really wanted some liquidity and flexibility in getting their HDB renovated to their desired style. Because their BTO was relatively affordable after grants, they were able to set aside $50,000 for renovation. 

Bob’s story – The very #instaworthy #bobsretirementhome 

Bob, a single, bought his 4-room resale flat  in Bukit Panjang for around $350,000 in late 2016 and as with 80% of first time home buyers, he was able to completely cover the monthly mortgage installments with his CPF. This meant that he does not need to pay any cash out-of-pocket. 

He bought his home under the Single Citizen Scheme and it allows singles who are 35 years old to purchase HDB flats. Singles can choose to buy BTO or resale flats. They can apply for 2-room BTO Flexi units at non-mature estates and for resale units, there are no restrictions on location or size; so singles who want bigger flats or want their flats immediately will usually go the resale route. 

These grants offer a significant subsidy on the price of a new 2-room BTO or resale flat and makes it possible for Singaporeans to own their home on one person’s income. 

Infographic on Singapore Citizen Scheme (HDB Facebook)

Zuraidah’s story: A single mum’s journey from renting to being an owner

Zuraidah always had the idea of wanting her own home after a long period of staying in a rental flat. When her youngest turned 4, she made the decision to go back to work, thereby taking in a  steady income with employer CPF contributions. 

She and her husband were then able to make the decision to stop renting and instead purchase a home of their own. They successfully balloted for a 3-room BTO flat in Sengkang which cost $189,000 and utilised the first-timer grant as well as use their savings in CPF to offset the down payment. 

READ MORE:  One of the workers injured in the Tuas fire has passed away

The $350 mortgage installment that Zuraidah and her hubby had to fork out for their 20-year loan was actually cheaper than the $450 for rent that they were paying. 

Graphic: Benefits of owning your HDB vs renting one (Source:

Zuraidah’s long but fulfilling  journey to home ownership is nothing short of inspiring, showing that adequate grants and subsidies coupled with hard work and grit, will not stop anyone from owning their own home, even if they are from low income households. 

HDBs are affordable – But is it enough?

After speaking with various people, we’ve established that Singapore’s public housing system has done a good job in helping citizens own homes affordably through a combination of keeping prices of Built-To-Order flats low and generous grants. 

But is that enough? We dare say that the mark of a good public housing system is that it not only helps citizens own homes affordably but has in place programmes to enable HDB flats to retain their value and/or monetise their flats if need be. Let’s explore further. 

Helping homes retain value through home improvement 

The Housing and Development Board of Singapore currently runs the Home Improvement Programme (HIP), which is designed to resolve common maintenance issues of ageing flats. It is a heavily subsidised programme by the Government, which bears from 87.5% to 100% of the costs. There are the two types of works that are typically covered by the HIP. 

Home Improvement programme (HDB website)

Every HDB flat will go through an estimated two HIP upgrading exercises in the span of its 99 year lease, ensuring that residents get to have their homes refreshed and have the option of upgrading certain fixtures in their homes.   

Caring for an ageing population – EASE HDB Scheme

With an ageing population in mind, HDB has also rolled out the Enhancement for Active Seniors (EASE) scheme which could include improvements such as installing grab bars in toilets, anti-slip treatment for slippery floor tiles, ramp installation for easy access. An important feature about the EASE Scheme is that residents can opt for it even if their own block of flats have not yet been selected for HDB’s HIP upgrading exercise. This makes sure that eldery citizens who need such enhancements get them. 

Payment breakdown for EASE Scheme (MoneySmart)

Monetising to supplement retirement income

Apart from helping HDB flat owners retain the value of their homes, HDB has also recommended 4 methods in which homeowners can unlock the value of their homes and monetise to supplement their retirement needs. 

Two profiles we spoke in their senior years were currently monetising their HDB flat. 

READ MORE:  When upgrading of HDB estate goes wrong...

Yvonne, a single lady in her 60s, rents out a room of her 3-room HDB flat in theToa Payoh to a tenant for $600 a month. Although Yvonne does not need the money now, she likes the companionship it offers and that she can save for when she needs the money in future.

Mr and Mrs Lee are in their 70s and have been staying in their fully paid-up 3-room HDB at Sembawang. They decided to opt for the Lease-Buy-Back Scheme (LBS) as they like their apartment and do not want to give up on privacy. The LBS which would give them a cash balance of $38,000, a lifelong monthly income of $720 and a cash bonus of $10,000. 

Rounding up the conversation about housing 

The public housing system of Singapore has done well in terms of helping home buyers from various segments of the population – young couples, sandwiched class, low income, singles, elderly etc afford to buy a home of their own. The Government continues to be generous in the amount of grants doled out, making HDB flat ownership within reach for a significant part of the population, with schemes helping those of the lower income even more.  

But it should not stop there. The Government needs to continue upgrading and improvement efforts in a bid to help homeowners retain the value of their homes so that it will be an appreciating asset. And while the 4 options to further help the elderly monetise their homes are a good initiative, the Government needs to continually gather feedback on such schemes and continue refining policies to help eldery citizens supplement their retirement income. 

With all this machinery working towards benefiting citizens, we can then truly have a public housing system that is a cut above the rest. 

This is a condensed version of our weekend feature, The Dive.

Click here for the full, original article,
The Dive | Does Singapore’s public housing cut it?

The Dive is our new weekend feature where we bring you in-depth news, interesting insights and different perspectives on the latest trends or issues that matter.

More Related Reading
1) Our HDB is the reason we don’t riot like Hong Kong
2) An accidental Instagrammer shares his adulting journey: From $12,000 credit card debt to $350,000 HDB flat
3) Hong Kong family says they prefer living in Singapore and vow to “never go back to Hong Kong”
4) Singapore doesn’t have the least affordable housing


Don't be selfish... Click here to share this on Facebook!

If you like what you read, follow us on Facebook to get the latest updates.


Author Zahra

More posts by Zahra