The Housing and Development Board (HDB) announced last week that for the first time since 2015, HDB will hold three Build-to-Order (BTO) sales launch exercises instead of the usual four this year.
Last year, the Housing and Development Board (HDB) launched 22,800 BTO flats across four sales exercises which is an average of 5,700 BTO flats per sales exercise. This year, HDB decided that a total of 19,600 new public housing flats will be launched in three batches across three exercises in February, June and October 2024. The reduction in the number of BTO flats offered in the sales launches this year is also due to lower application rates from first-timer buyers for all flat types as HDB saw a drop in the overall BTO application rates for 2023. The median number of applicants for each available unit was 1.9 in 2023 when compared 3.7 in 2019, before the COVID-19 pandemic.
With three BTO launches instead of four, the Housing and Development Board (HDB) believe that home buyers can now look forward to a bigger housing supply at each sales launch enabling them to select from a wider range of flats and locations, e.g. there will be an average of 6,533 per sales exercise this year when the 19,600 new BTOs are divided over three BTO sales exercises instead of four.
This new proposal will now allow applicants at every BTO sales launch exercise to enjoy a higher chance of success in finding a flat that meets their budget and needs and will reduce the extent of overlap between the selection exercises and provide greater certainty for home buyers.
BTO Sales Launch Exercise
In Singapore, the Housing and Development Board (HDB) conducts regular BTO sales launch exercises. These BTO sales launch exercises offer newly constructed flats to eligible buyers. BTO flats are new residential properties constructed by the HDB. These flats are usually offered in various housing estates, and buyers can apply for them during specific BTO sales exercises.
To participate in a BTO sales exercise, individuals or families must meet certain eligibility criteria. These criteria may include citizenship status, income ceilings, and family nucleus requirements. During each BTO sales launch exercise, HDB will announce the available flat types (e.g., 2-room, 3-room, 4-room, etc.) and the specific housing estates where these flats are being offered. A balloting system is then used to allocate the flats and successful applicants will be notified on how they can proceed with the flat purchase process.
BTO sales exercises are scheduled events during which eligible individuals or families can apply for the available flats. These exercises are typically conducted multiple times a year, and they cover different locations and flat types and split into 3 categories: Standard, Plus or Prime BTO flats.
Standard, Plus or Prime BTO Flats
Under the new classification framework announced last year, HDB BTO flats will be split into 3 categories from the 2nd half of this year in 2024: Standard, Plus or Prime.
a. Standard flats will form the majority of the housing supply, with standard subsidies and restrictions such as the existing 5-year minimum occupancy period (MOP).
b. Plus flats will be located in choicer locations within each region across Singapore (e.g. near MRT station, town centre). Flat owners will enjoy more subsidies, but tighter restrictions compared to the Standard BTO flats.
c. Prime flats are in the choicest locations within Singapore, usually closer to the city centre. They will come with the most subsidies across the 3 categories and will have the tightest restrictions. These flats are currently offered under the Prime Location Public Housing (PLH) model.
"Buying a home is indeed one of the most significant financial commitments that individuals or families make in their lifetime" said Kiwi Lim, an experienced real estate professional from the largest private real estate agency in Singapore - Huttons Asia. "With the new BTO classification, the government is trying to emphasize that the purchase of HDB flats is to provide affordable housing for Singaporeans, instead of viewing it as a means to “profit” from the sale."
More housing options for singles in Oct 2024
Currently, singles who are above 35 years old can only apply for a 2-room flexi flat in a non-mature estate. However, singles can look forward to the BTO sales launch exercises in October 2024 which will see more locations available for them.
With the new classification, eligible first-timer singles can:
a) Apply for 2-room Flexi BTO flats in all locations across Standard, Plus and Prime housing projects
b) Buy a Standard or Plus flat of any size (except 3Gen flats) in the resale market
c) Buy a 2-room Flexi Prime flat in the resale market
While singles are still restricted to the size of BTO flats they can buy, they will now have more choice of locations.
About 4,100 BTO flats will be offered in the February 2024 BTO exercise. These flats will be in Bedok, Queenstown, Choa Chu Kang, Hougang, Punggol and Woodlands. Around 1,500 Sale of Balance Flats (SBF) units will also be available next month in February 2024.
Resale flat prices for 2023 rose by 4.8 per cent, less than half of the 10.4 per cent increase in 2022, according to the Housing and Development Board (HDB)’s flash estimates.