This is an interesting chair.
HDB and MND are always looking at new technologies to improve construction productivity. So 3D printing is one of them. In fact, HDB has the largest 3D printer in Southeast Asia now, and they are using it to build small-scale components, furniture like this, rooms. But for now, to build an entire flat with a 3D printer, the technology is not ready yet. But over time, whether it's 3D printing or other technologies, if they get better, we will continue to harness them in order to enhance productivity in the construction sector.
It is an incredible story, and it's a story not just of public housing but of national housing. Because remember, when we go back to the '50s, for example, the large proportion of Singaporeans were living in overcrowded slums, and the British colonial government at that time said there was no way to resolve this problem. They set up the SIT, experts came in to do reviews and said the problem could not be solved or would take a long time to be solved. But we proved them wrong. And when the PAP came in after self-government in 1959, a year later we set up the HDB and we embarked on a massive building program and we housed an entire nation.
And then over time, the challenges continue. Whether it's in the '60s, '70s, new challenges, new circumstances, the need for ethnic integration policy later on, the need to make HDB flats not just a roof over the heads of Singaporeans, but to create community. Because in our HDB estates, people of different backgrounds live together, play together, the children go to schools in the nearby schools, and we forge a sense of shared experiences and memories and a very strong Singaporean identity. And over the years, HDB has also been innovating continuously to meet the evolving needs of Singaporeans. So the public housing story in Singapore is really an integral part of our Singapore story.
Growing up in Marine Parade will always be a special part of my life. First of all, it's right next to East Coast Park and the beach, so it's very convenient. And I would always remember and enjoy walking over to the beach, cycling, jogging, just relaxing at East Coast Park. Then we had a playground outside my flat. It was a bit like the Dragon Playground, so my brother and I would spend a lot of time there with the other kids in the neighbourhood at the playground. And then as we got a bit older, it would be the grass patch near the flat where we would play football. And you know, someone just needs to bring a soccer ball down, and then the rest of the kids will come together and we'll just have a game of football. And the other thing that was memorable were the block parties that the Residents' Committee, the RC in those days, organised at the void deck. They would do it potluck style. There would be magic shows, and those were a real treat for children. And I always enjoyed those get-togethers.
I suppose in MND and in HDB, more generally, we always have to keep on evolving and updating our policies. The fundamentals of our policies are correct. People do want to own their own homes, not just having a home, but having a sense of community, building that shared experience, having people of all different backgrounds, rich or poor, different race and religions, living together is so precious and it's invaluable to our social compact. And then having a nest egg for retirement. So these basics and these fundamentals are very sound. But in MND, I found that sometimes the fundamentals are there, but the actual experiences and the practices and the perceptions may swing in different directions that you may not have anticipated. For example, you may end up with a situation sometimes where housing becomes not just home ownership, but becomes a speculative investment. When it's speculative, people get worried, people get FOMO, the fear of missing out, people jump into the market, or worse, people over-consume housing and they buy not just one, but two, three, four, multiple properties. All their life savings goes into property. And so these are things that you have to find ways to manage, and policies have to adjust to them. That's why over the years we have put in new measures. For example, Singaporeans buying multiple properties have to pay higher ABSD, and that's why we have also adjusted CPF policy so that we ensure there is no over-usage of CPF for housing. We have set withdrawal limits for housing. We have set tighter loan-to-valuation limits where it comes to housing loans. And importantly, during my time in MND, we also required that when you use your CPF for housing, you make sure that the lease lasts you for life, so that you are not just buying a property for speculative purpose. You are buying a home that will last you for life. And then when it comes to having a nest egg, we have had to adapt our policies too. Like the Lease Buyback initially was a very limited scheme, but recognising that our population is aging, we expanded the Lease Buyback scheme. We also introduced new incentives for seniors to right-size. If you have children growing up and then eventually you become an empty nester, there are seniors who may not want to do Lease Buyback because then it's a big flat. They may say, look, I prefer to have a smaller unit, you know, less to upkeep. So these are things where we have had to adapt to changing circumstances and changing societal needs.
I think it's important when we look at these comparisons to do a proper like-for-like comparison. In those days, Marine Parade was a non-mature estate. It was built on reclaimed land. In fact, people were reluctant to buy it, as I recall from recollections from my parents, because they were worried that the land would sink. So first of all, I think we should compare non-mature estate to non-mature estate. A three-room flat in a non-mature estate would go for something like 200-odd thousand. That's a BTO price, but the government gives additional grants. With grants, it could be less than 100,000. So yes, there has been an increase, but not as much as what you have seen in the chart. But aside from the house price, we should also look at incomes. So the relevant comparison is not that home prices have increased more than the inflation rate or headline inflation rate, but how have home prices increased relative to Singaporean incomes? Because Singaporean incomes have also risen faster than the headline inflation rate. I mean, if you think about it, a teacher in the '70s had a monthly salary in the several hundreds. A teacher now in a school, MOE school, could be earning a starting salary of $4,000. So there has been an increase, and it's much more than headline inflation, a significant increase because the country has progressed. So look at home prices in relation to income, look at home prices like-for-like comparison. Actually, we are not doing too badly, and that's the reason why the vast majority of Singaporeans who are first-timers buying BTO flats are able to do so and service their HDB loans with little or zero cash outlays. Most of it comes through their CPF, and that never used to be the case in the past. If you talk to people who purchased flats in the '70s, in fact, a large proportion of their pay was used to service the home mortgage, which meant that they had very little left after servicing the loan, and they had to tighten their belts in order to afford their flats, which is no longer the case today because the vast majority can service it through CPF, and they will have to fork out very little cash or even zero cash for the home. That's very unique in the world, incidentally, because all over the world, in the major cities of the world, young people have to pay a lot from take-home pay in order to buy a home. Whereas in Singapore, we can assure young Singaporeans that is not the case. We can keep BTO flats affordable.
In the past, a lot of Singapore was not mature estate, but nowadays more mature estates everywhere because we are more built-up, we are much more developed. So you have a lot more mature estate options, and because they are mature, they have better amenities, MRT stations nearby, they have better locational attributes. The market prices are understandably more expensive. HDB would typically apply the same subsidy for a flat in a non-mature estate to a flat in the mature estate, to be fair, right? The same subsidy. You start with pricing flats in non-mature estates for affordability, use that same subsidy and apply it to the market discount for a flat in a mature estate, which means that the BTO price for a mature estate will be higher. And that sometimes gives rise to the unhappiness or the concern that some of these prices are quite expensive. What can HDB do? One way, one option would have been to say, let's increase the subsidies for these flats in mature estates so as to keep them affordable. But if you were to only increase subsidies, then the ones who apply and get the flat in the mature estate will be very lucky. It would be like they have won a lottery because, you know, flats are balloted, there's a high application rate. The lucky few who get these flats with higher subsidies will feel very good, but the others who don't get it will feel hard done by. Why is it so unfair? And that's why recently, after reviewing the system, we decided to change the classification system and to change our entire approach. We now have Standard flats, which are like the non-mature estate flats, but we also have Plus flats and Prime flats. And the Plus and Prime flats are flats in better locations, better, more attractive attributes. They are more expensive, but what we will do is we will increase the subsidies for these flats to keep them affordable. But to keep the system fair, these Plus and Prime flats will have more restrictions for sales eventually, and when the flats are resold later, the subsidies, that additional subsidy, will have to be returned to HDB.
Our policy is home ownership on the basis of 99 years. It has always been the case. The flats are sold on the 99-year lease. When I was at MND, I had to go and engage Singaporeans quite widely to explain to them. So I would ask that I go out in different groups. Look, you have your name on your HDB flat after the MOP, of course. Can you sell the flat? They all say yes, we can sell the flat. Can you sublet a room or rent out the flat? And they say yes, we can. So does that mean you are a tenant? Can you do all that if you were simply a tenant? You can't. These are exclusive ownership rights, and I think people understand that. Therefore, they are owners. So it requires engagement, explanation, but at the end of it, I think Singaporeans will understand because after all, 99 years is not unique to HDB. The government has been selling land for a long time on a 99-year basis. There are many 99-year condominiums out there, and no one in these private condominiums will say that my 99 years is freehold, and neither will they say ownership of a private condo with 99 years means that I'm a tenant and not an owner. They don't say that. So I think 99 years is a well-known concept in Singapore, public or private housing, because if all land in Singapore becomes freehold, I think in the end, down the road, it will be very hard to assure future generations about keeping housing affordable. The ones who will benefit will be today's landowners and their children, but new generations who don't have housing bequeathed to them will find it very, very hard to have access to affordable housing, and the government will find it very difficult to redevelop and rejuvenate older areas given our limited land size. In the end, the 99-year lease, whether it's a private condo or whether it's HDB flats, yes, they have to be returned to the state. Everyone understands that 99 years is in fact a very long time. It's more than enough for any individual. So in fact, if you buy a flat as a young couple or as a young single, you will have more than enough value in the flat through the 99 years. Later on, when you reach retirement, to unlock the value of the flat and still have value to monetize for your retirement.
Again, when we look at prices in the property market, be it HDB resale price or the private property residential prices, we have to look at these prices in relation to incomes. The resale market for HDB and the private property market sort of move in tandem, so you have to look at all of that as a contiguous property market. Unfortunately, there was some disruption to the market because of COVID. Usually, in a deep recession like COVID, the economy goes down, prices go down as well. This didn't happen in COVID. Property prices, generally speaking, remained stable, in fact continued to rise, partly because there was strong demand, but partly also because the building of flats, both private property and HDB flats, was severely disrupted. So supply was impacted, and that's why you have that effect. In recent time, we have made some moves since then to cool the market. We have ramped up supply, and more and more supply on the private side as well as HDB flats are now going into the market. So I believe the measures are working. They will help to stabilize the market, but we will need time for these measures to show more results.
I think we have to look at it in totality. These flats are still the minority. If you look at the HDB resale market, yes, we are on the sort of the market cycle now because of the supply disruptions earlier, where prices are on the high side. But overall, overall prices have been moving in line with incomes. And for first-timers, some of them do want the resale flats because they want the flats quickly. We do provide grants as well. So that's what we can do to assure first-time Singaporeans that they will always be able to get HDB flats affordably, be it in the BTO or on the resale market.
What this represents, our commitment, it represents indeed our commitment to housing affordability. HDB will purchase land from the state, and then they will sell the flats to Singaporeans. It's precisely because the sales price to Singaporeans is unable to cover the full cost of the flats for HDB, because they're selling it at a lower price, that's where the deficit comes in. We have a significant market discount, and we price the flats in order to keep them affordable in relation to Singaporean incomes. So when the resale market is on the high side, HDB still prices the flats affordably. The deficit goes up, therefore government provides more funding to HDB. We have planned for this in our fiscal projections because we know this is coming, and we will continue to support this because it's our commitment to keep HDB flats affordable for Singaporeans.
We know the trends. We have made one move recently, which was to allow singles to buy flats across different types, not just Standard but also Plus and Prime. And we will consider what other moves we can make for singles down the road. But for now, we still don't have enough supply to meet the existing demand for existing groups, and therefore we are unable to open up eligibility of HDB flats to new groups or to widen the eligibility. So until we have reached a point where we have stabilized enough supply to meet existing demand, then we can consider other further moves down the road. So we have already evolved to be more inclusive, but it's a balancing act all the time to make sure that we want to have young families who want to settle down have access to homes. That's very important for us. We want singles to be able to sink roots here, set up families, and have a sense of community. But there are other archetypes, singles, seniors looking to right-size, who will also want homes, and then we will have to increasingly provide for these groups as well. But at the same time, land is limited in Singapore, so we will always have to do that balancing act of looking at how much land we have, all the different demands and needs that are evolving in society, and how best to accommodate these different groups.
In many ways, my vision for housing is really to stay true to our founding principles and vision. First, keep housing affordable for Singaporeans. Public housing must always remain affordable for every generation to own their own homes. Second, we want housing estates to be areas where Singaporeans of different backgrounds can come together, live together, grow up together, and forge that sense of common experiences and memories together. And thirdly, it has to be a fair system for everyone, so that people don't feel like, you know, this is a system where only the lucky few benefit. There needs to be fairness in the system. So these are three important founding principles that we started HDB on, and we will continue to uphold so that every generation in Singapore can aspire towards having their own home, building that sense of community, and having a stake in our nation.
