With so many options available, which one should you choose? Whatever your decision, may luck be on your side.
On October 16, 2024, the Housing & Development Board (HDB) launched 8,500 Build to Order (BTO) flats, completing the 19,600 BTO flats promised for 2024.
This launch features an impressive 15 projects, a record number, including seven Standard projects, seven Plus projects, and one Prime project.
A wide variety of flats, such as 2-room Flexi, 3Gen flats, and Community Care Apartments, are available under the new classification system, which includes Standard, Plus, and Prime categories.
The reclassification of flats could influence first-time buyers, potentially steering them away from the Plus and Prime options, while balancing demand across the board.
Plus Flats Make Their Debut
Plus flats are one of the three newly introduced classifications for BTO flats and are being offered for sale for the first time.
This round’s Plus flats are available in Ang Mo Kio, Bedok, and Kallang/Whampoa.
These flats are located in more sought-after areas, typically near MRT stations, as well as current or upcoming town centres and amenities. Plus flats in Bedok (Bayshore and Kembangan) are expected to be highly popular due to their proximity to MRT stations. Bayshore will be a new precinct near the popular East Coast Park, featuring units with full-height windows offering a sea view. Meanwhile, Kembangan, a well-established estate, will see the launch of its first flats since the late 1980s.
Kembangan Wave (Source, HDB)
We anticipate strong demand for the Plus project in Ang Mo Kio, given its close proximity to the town centre and AMK Hub. The previous BTO launch in Ang Mo Kio in 2022 had an application rate of 13.5. However, the new development is expected to be located 1-2km away from CHIJ St. Nicholas, which is just outside the priority enrolment zone, potentially balancing out the demand.
So – how do they differ from the already existing Prime flats?
We anticipate strong demand for the Plus project in Ang Mo Kio, as it is within walking distance to the town centre and AMK Hub. The previous BTO launch in Ang Mo Kio in 2022 saw an application rate of 13.5. However, the new project is expected to be located 1-2km from CHIJ St. Nicholas, slightly beyond the priority enrolment distance, which may help to balance the demand.
Source: HDB
The BTO prices for these flats are highly attractive, as they are sold at a substantial discount compared to resale market prices. This is because BTO prices are not linked to the resale market and are instead set based on what households with monthly incomes up to $14,000 can afford, using a Mortgage Servicing Ratio below 30%.
The price difference is minimal, with Prime flats in Kallang Whampoa starting at just $46,000 more (excluding grants). Since the resale restrictions for Plus and Prime flats are largely similar, we anticipate that most buyers will prioritize the Prime flats at Crawford Heights. These flats are closer to the city, offer views of a waterway, and feature a more appealing façade and architectural design.
Stricter restrictions for Plus/Prime Flats
Resale subsidy clawback
Both Plus and Prime flats will have stricter resale restrictions, including a 10-year Minimum Occupation Period (MOP), a resale income ceiling of $14,000, and a 6-9% subsidy clawback.
The subsidy clawback will be based on the eventual resale price, which may not be very high due to the income ceiling cap for the future resale buyer. For instance, if the resale price reaches $1.3 million, an 8% clawback would amount to $104,000.
However, given that the current BTO prices for these Plus and Prime flats are 300-400K lower than resale flats in the area, BTO buyers are getting a substantial market price discount for a brand-new flat in the same location. Therefore, the clawback should not be a significant deterrent.
While the reclassification of flats may discourage some first-time buyers from choosing Plus and Prime flats, this could help balance demand across the market. Despite the clawback, we’ve seen strong demand for Prime flats in previous BTO sales launches.
Minimum Occupation Period (MOP)
Additionally, Plus and Prime flats will have a 10-year Minimum Occupation Period (MOP), which is twice as long as that of standard flats.
This extended MOP could raise concerns for potential buyers. Life changes such as job relocations, family expansion, or caregiving responsibilities may create the need to move, leading some buyers to worry about being tied to a longer MOP.
As a result, some buyers may prefer the flexibility of Standard flats, particularly those in convenient locations. We expect Pasir Ris and Sengkang flats to be especially popular, as they offer shorter construction times, proximity to MRT or LRT stations, and a wide range of amenities in the area.
Other Resale Restrictions
Plus and Prime flats can only be resold to Singaporean citizens whose household income does not exceed $14,000.
Additionally, the waitout period for private property downgraders will be extended from 15 to 30 months for these flats.
As a result, private property downgraders may explore other options outside of Plus and Prime resale flats. These buyers typically have larger housing budgets and may be willing to pay a premium for their preferred HDB home.
Prime flats to pilot the ‘White Flat’ program
Crawford Heights in Kallang/Whampoa marks HDB’s first pilot of the ‘white flat’ concept.
This will also be the sole project under the Prime category this year, following Prime launches in areas like Tanjong Rhu, Tanglin, and Holland Village.
‘White flats’ offer applicants the option to purchase a unit with a beamless, open-concept layout, where the living and bedroom areas are not divided by walls. This concept is expected to appeal to young couples seeking to extensively renovate their homes. However, buyers should be cautious, as heavy renovations may reduce the appeal of the unit for future buyers.
Crawford Heights (Source: HDB)
Standard Flats still make up the majority of flat supply, with some projects expected to see stronger demand.
According to HDB, standard flats are the most widely available, making up the majority of new flat supply and offering the most affordable option with minimal resale restrictions. As such, they are the most accessible housing choice for Singaporeans.
In the June BTO exercise, the Woodlands and Tampines projects were the only ones with waiting times of less than 3 years, offering a total of about 1,352 units.
On the other hand, three projects in Sengkang and Bukit Batok will launch a total of 2,085 flats with expedited waiting times—about 1.5 times shorter than the previous launch.
The Bukit Batok project (West Brickville @Bukit Batok) boasts a notably short 2-year wait time, one of the quickest ever for HDB flats.
These launches, paired with the 5-year MOP, offer some of the shortest timelines for asset progression, making them an attractive choice for many.
Costa Riviera I & II (Source: HDB)
The twin projects at Pasir Ris, located within walking distance of an MRT station, are expected to be a major draw for many applicants, particularly those with family in the area. We anticipate that the 4- and 5-room flat options will be especially popular among first-time buyers.
Sengkang, with its proximity to LRT stations and amenities like Seletar Mall, offers attractive pricing and is likely to attract considerable interest. The Bukit Batok project, situated across from Tengah, presents a first-mover advantage for residents, as they’ll be near a rapidly developing area set to feature a future MRT station along the Jurong Regional Line.
West BrickVille @ Bukit Batok (Source: HDB)
The Jurong West Project, though located a distance from the nearest MRT station, offers over 1,800 units with 4-room prices starting at $290,000, making it the most affordable and accessible option for budget-conscious buyers.
2-room flat availability for Singles across all housing models
Application rates for 2-room flats among singles continue to be high, especially in sought-after housing estates. In the June sales launch, the application rates for singles were 7.0 for the Yishun project and 6.4 for the Jurong East project.
Allowing singles to purchase 2-room flats in mature estates offers the advantage of living closer to their parents, making it more convenient to manage caregiving responsibilities.
Conclusion
Here are a few key takeaways from the launch of this BTO exercise:
- Standard flats offer the most flexibility. They are the most affordable option with the fewest resale restrictions, making them particularly attractive for those looking to upgrade to private property after the 5-year MOP.
- Plus flats are ideal for those who aren’t looking to upgrade in the medium term. These flats are located in established estates like Ang Mo Kio and Bedok, offering the convenience of staying near family. They may also be a popular choice for singles, as their BTO options have previously been oversubscribed.
- Prime flats remain the top choice for owner-occupiers. They are located in prime areas close to the city center, with easy access to amenities and transport links.
In February 2025, HDB will release approximately 5,000 flats across Kallang/Whampoa, Queenstown, Woodlands, and Yishun, with a focus on developing emerging areas like Chencharu, Woodlands North, and Tanjong Rhu.
However, when it comes to project diversity, the upcoming launch in October offers a broader selection across more popular and desirable locations. As a result, we don’t anticipate the February launch to impact the current demand.