October HDB BTO launches new classification of HBD flats
By Mogul.sg Research
Friday, 4 October 2024
Summary
(1) The HDB will launch about 8,540 flats this October in its third and biggest HDB BTO release for 2024. These 15 projects will be offered under the new classification of HDB flats, doing away with the current classification of mature and non-mature estates. The new flats are categorised as Standard, Plus and Prime flats.
(2) Standard flats will be the bulk of HDB flats across the island, with standard subsidies. The MOP for these flats is 5 years, with lenient resale flat restrictions, whole flat rental and no subsidy clawback.
(3) Plus flats are pricier than standard flats, but have more subsidies provided. These flats are subject to a MOP of 10 years, some resale flat restrictions, no flat rental and low subsidy clawbacks.
(4) Prime flats are located in more central regions, with the most subsidies. These flats also have a MOP of 10 years, with tight resale flat restrictions, no flat rental and high subsidy clawbacks.
(5) According to our research, we expect five of the BTO projects to consist of Standard flats, six Plus BTO projects and the remaining four BTO projects would comprise Prime flats.
Introduction
In October 2024, the Housing Development Board (HDB) will launch about 8,540 flats in 15 projects across Singapore. This Build-To-Order (BTO) exercise will be the third and biggest one for this year.
At the same time, the government will introduce a new classification system where the BTO flats will be categorised as Standard, Plus, and Prime flats. The new classification system will replace the current classification of “mature estate” and “non-mature estate” which was introduced in 1992.
Standard flats
Standard flats will form the majority of the BTO flats offered to homebuyers. These flats will be located Outside the Central Region (OCR), which is also known as in the suburban areas.
Among the three classifications of BTO flats, Standard flats will come with the least restrictions, such as a Minimum Occupation Period (MOP) of 5 years. Owners of Standard flats will be allowed to rent out the whole flat after the MOP and they are not subjected to subsidy clawbacks when they sell their flats in the resale market. The regulations applicable to Standard flats are similar to the current rules governing HDB flats that are not Prime Location Public Housing (PLH) flats.
Standard flats are designed to cater to residents looking for more affordable housing options without stringent restrictions. By offering Standard flats with a 5-year MOP and fewer resale restrictions, this category of public housing would appeal to those prioritising flexibility and lower initial costs.
Plus flats
Comparatively pricier than standard flats, Plus flats are situated at choicer locations in various parts of Singapore. In the OCR, these flats would usually be situated closer to transport nodes such as MRT stations or near the town centres.
As Plus flats would typically be more expensive than Standard flats in the resale market, the government will provide additional housing subsidies and discounts to eligible buyers to keep the Plus flats affordable.
Buyers of Plus flats must stay in the flats for a longer MOP of 10 years and are subject to additional resale flat restrictions. Unlike Standard flats, owners of Plus flats are not permitted to rent out the entire flat at any time.
In addition, the flat owners must pay part of the subsidy back to the government if they subsequently sell the flats in the resale market. However, the subsidy recovery rate or subsidy clawback for Plus flats will be lower compared to that of Prime flats.
Plus flats strike a balance between affordability and accessibility to public housing in relatively attractive locations. The government will offer greater subsidies while promoting longer-term residence through stricter occupancy rules. This category might appeal to buyers seeking affordable HDB flats in popular and convenient locations.
Prime flats
Prime HDB flats will typically be situated in the choiciest locations where the priciest HDB resale flats are located. These locations will typically be found in the Central region and in popular matured housing estates.
As the resale market prices of the flats in such popular locations will be the highest among the three classifications of flats, the government will provide the biggest discount and subsidies to eligible buyers of Prime BTO flats to keep these flats affordable.
Both the Prime and Plus flats come with MOP of 10 years and stricter ownership, resale and rental restrictions, such as the owners are not allowed to rent out the whole flat even after the MOP. Furthermore, the subsidy recovery rate of Prime BTO flats is also higher than that of Plus flats.
When the Prime flats are eventually transacted in the resale market, the subsequent buyers will also be subjected to the 10-year MOP and eligibility criteria such as household income ceiling restrictions. However, the secondary market buyers will not be subjected to the subsidy clawback.
Homebuyers who prioritise owning a new HDB flat in convenient and central locations and are willing to accept the stricter HDB conditions could be drawn to apply for Prime flats.
Singles can apply for 2-room BTO flats islandwide
Another change that will take place in October is that eligible singles will be able to apply for 2-room Flexi flats in all the BTO projects across Singapore. Previously, singles could only apply for 2-room Flexi flats in BTO projects located in non-mature estates.
This would widen the choices of BTO project locations for singles. However, in BTO projects where the number of 2-room Flexi flats are limited, the housing needs of senior citizens will still be prioritised as more 2-room flats will be allocated to the seniors.
Distribution of BTO projects
Among the 15 projects set to be launched in October 2024, we predict a distribution of 5 Standard projects, 6 Plus projects, and 4 Prime projects. This distribution translates to approximately 49% of the flats would be classified as Standard flats, 35% being Plus flats, and 16% being Prime BTO flats.
Therefore, this distribution of BTO projects aims to balance housing supply across different geographical regions and caters to varying housing needs, preferences and budgets among the Singaporean BTO applicants.
Table 1: October 2024 HDB BTO projects and predicted classifications
S/No. | HDB towns of BTO projects | Road name | Nearest MRT or LRT station | Est. distance to MRT station (metres) | No. of Flats | Possible classification | Region |
1 | Ang Mo Kio | Ang Mo Kio Central 3/ Ang Mo Kio Avenue 6 | Yio Chu Kang | 700 | 430 | Plus | Northeast |
2 | Bedok | Jalau Kembangan | Kembangan | 50 | 340 | Plus | East |
3 | Bedok | Bayshore Drive | Bayshore | 350 | 730 | Plus | East |
4 | Bedok | Bayshore Drive | Bayshore | 405 | 710 | Plus | East |
5 | Bukit Batok | Bukit Batok Road/ Bukit Batok West Avenue 8 | JE2 (U/C) | 205 | 690 | Standard | West |
6 | Geylang | Aljunied Road | Mattar | 50 | 420 | Prime | Central |
7 | Jurong West | Yung Ho Walk/ AYE | JS10 (U/C) | 1,990 | 1,840 | Standard | West |
8 | Kallang / Whampoa | May Road/ CTE | Boon Keng | 520 | 360 | Prime | Central |
9 | Kallang / Whampoa | Crawford Street/ North Bridge Road | Lavender | 300 | 310 | Prime | Central |
10 | Kallang / Whampoa | Upper Boon Keng Road | Geylang Bahru | 460 | 270 | Prime | Central |
11 | Pasir Ris | Pasir Ris Drive 3/ Pasir Ris Green | Pasir Ris | 320 | 280 | Plus | East |
12 | Pasir Ris | Pasir Ris Drive 3 | Pasir Ris | 320 | 480 | Plus | East |
13 | Sengkang | Fernvale Link/ Fernvale Close | Layar LRT | 180 | 550 | Standard | Northeast |
14 | Sengkang | Fernvale Street/ Fernvale Road | Thanggam LRT | 200 | 840 | Standard | Northeast |
15 | Woodlands | Woodlands Centre Road | Marsiling | 340 | 290 | Standard | North |
Source: Mogul.sg Research, HDB
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