SINGAPORE - The Housing Board will launch up to 14,000 two-room flexi Build-To-Order (BTO) flats over the next three years to meet demand from singles and the elderly, said National Development Minister Desmond Lee.
This is an increase of about 30 per cent from 2021 to 2023, he told Parliament on Monday.
Mr Lee was responding to Mr Xie Yao Quan (Jurong GRC), who asked whether more two-room flats will be offered in future Plus and Prime BTO projects.
Singles aged 35 and older will be able to apply for such flats across all BTO projects islandwide under a new public housing framework which will take effect from the second half of 2024. Currently, they can buy new two-room flexi flats only in non-mature estates.
OrangeTee & Tie senior vice-president of research and analytics Christine Sun noted that the number of two-room flats launched for sale rose 5.1 per cent from 4,194 units in 2018 to 4,408 units in 2022.
However, the number of applicants for such flats more than doubled – rising by 108 per cent from 7,145 to 14,864 over the same period. More than three applicants have been vying for each two-room unit since 2021, indicating that demand for such flats remain strong, she added.
Mr Lee said HDB is also working to reduce wait times for BTO flats to three to four years by 2024, down from the current median waiting time of about 4 to 4? years.
Four MPs had filed questions on the reclassification of HDB flats, in which BTO flats in choicer locations will fall under the Prime and Plus categories that come with stricter resale conditions such as a 10-year minimum occupation period (MOP) and a subsidy clawback.
This will replace HDB’s current framework of classifying estates as mature or non-mature. Standard flats, which will form the bulk of housing supply, come with the standard five-year MOP.
Mr Xie also asked if the Government will consider shortening the 10-year MOP for Plus flats “to set a clearer distinction in sale and resale conditions between Plus and Prime flats”.
Mr Lee said the Government had considered this carefully.
“We think that an MOP of 10 years seeks to strike a balance between strengthening the intent for owner occupation on the one hand, and giving home owners the flexibility of moving home for genuine reasons,” he added.
He noted that most Singaporean households stay in their HDB flats for 10 years or more before selling it.
For those who need to move out before the end of their MOP, HDB will assess their appeal on a case-by-case basis, he added.
On Mr Xie’s suggestion to impose a hard price cap on Prime and Plus flats, Mr Lee said this can be distortionary as prices may not fully reflect the attributes of the flats.
Instead, the Government will provide additional subsidies on top of the significant market discounts already provided for Standard flats, to make Plus and Prime flats more affordable to a wider range of incomes, he said.
First-timer home buyers can also tap the Enhanced CPF Housing Grant, he added. The means-tested grant gives up to $80,000 in grants for families and $40,000 for singles.
Mr Lee said the new framework’s impact on the resale market will depend on many factors, including home buyers’ preferences and market conditions such as the prevailing economic outlook and supply and demand.
Noting that Prime and Plus flats will only come onto the resale market in about 15 years’ time, Mr Lee said the tighter restrictions could moderate resale prices in the longer term.
“We will monitor the impact of the new housing framework on the broader resale market closely, and review where necessary,” he added.
Workers’ Party chief Pritam Singh (Aljunied GRC) had asked about the anticipated fiscal impact for Prime and Plus HDB flats under the new framework.
Responding to the Leader of the Opposition, Mr Lee said: “As Prime and Plus flats will come with more subsidies, the total fiscal impact will be higher than if we kept to the status quo.”
The anticipated fiscal impact will depend on factors such as market conditions during each launch, housing demand and the locational attributes of the sites, he added.
Mr Lee said the vast majority of flat supply will continue to be set aside for first-timer families.
Under the new framework, first-timer families will receive two ballot chances across all BTO projects. Meanwhile, first-timer parents and married couples will receive three ballot chances and additional priority under the Family and Parenthood Priority Scheme.
More details on the specific prioritisation and quotas for the different groups will be announced when ready, he said.
Mr Lim Biow Chuan (Mountbatten) asked whether the age limit of 35 for singles to buy BTO flats can be lowered.
Replying, Mr Lee said: “Our priority now is to build enough flats over the next few years to address this pent-up demand, before we decide whether to make any further moves.”