THE Housing and Development Board (HDB) will offer 8,573 flats across 15 projects next week under its new flat classification framework, in one of its largest Build-To-Order (BTO) launches to date.
New flats will be offered in nine estates – Ang Mo Kio, Bedok, Bukit Batok, Jurong West, Geylang, Kallang/Whampoa, Pasir Ris, Sengkang and Woodlands – and classified as Standard, Plus or Prime based on location, HDB said on Wednesday (Oct 9).
The October batch will make up more than 40 per cent of the new HDB supply for 2024.
Next week’s launch will include one Prime project, with 312 flats offered in Crawford Heights in the Kallang-Whampoa area area.
There will be 3,273 flats in seven Plus projects in Kallang/Whampoa, Ang Mo Kio, Bedok (Bayshore and Kembangan) and Geylang. Among these, two Bedok projects – Bayshore Vista and Bayshore Palms – will be integrated with rental flats.
Some 4,988 flats in seven projects will be offered as Standard flats in Bukit Batok, Jurong West, Pasir Ris, Sengkang and Woodlands.
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Prime and Plus flats, where higher prices reflect their superior locations, will receive more subsidies. But they will also be subject to larger subsidy clawbacks as well as strict resale and rental curbs to keep them affordable, both at initial sale and subsequent resale, HDB said.
“These restrictions reinforce owner-occupation in public housing, reduce the investment value of a BTO flat and thereby limit speculative gains, or the ‘lottery effect’,” said Minister for National Development Desmond Lee on Wednesday.
The minister was addressing students attending a roadshow at the Singapore University of Technology and Design, as part of HDB’s “MyNiceHome” varsity talk series.
Lee said that before the Covid-19 pandemic, “the HDB resale market was soft for more than six years”. But resale prices have increased over the past three years, as broad-based demand met with a supply crunch due to construction delays.
HDB resale prices jumped 12.7 per cent in 2021 after rising 5 per cent in 2020. Prices gained another 10.4 per cent in 2022, before moderating to 4.9 per cent growth in 2023.
There was also “market psychology at play” as more million-dollar flat deals surfaced, he added. After HDB resale prices continued to rise over the last few quarters, the government tightened HDB loan limits in August to cool prices.
Lee noted that the private property market has shown signs of stabilisation after several rounds of cooling measures. The private residential property price index fell 1.1 per cent in the third quarter, its biggest decline since 2016.
“We expect the declining private residential property prices to have a knock-on, stabilising effect on the HDB resale market over time,” the minister said.
The government has had to change its housing policies to address several concerns in recent years, such as keeping HDB flats affordable amid the rapid rise of resale prices, ensuring a steady supply of new flats for first-time homebuyers, and unlocking new attractive locations for public housing, Lee said.
Supplying new public housing in attractive locations led to “a dilemma”, said Lee.
Newly built flats in desirable locations, such as the city centre or the Greater Southern Waterfront, “naturally command higher market values”. This means that even after the “significant discounts” that HDB prices BTO units at, flats in these areas will still be out of reach for many families.
“Our HDB neighbourhoods may become gentrified, and this may erode the social cohesion that we have painstakingly built up over many decades,” the minister said.
Lower BTO pricing for these flats will improve access to units in attractive locations. “But without conditions to balance out these additional subsidies, owners of Plus and Prime flats will be able to ‘cash out’ on the additional subsidies and receive a windfall when they sell their flats on the resale market, if no restrictions are put in place,” he added.
“This would worsen the lottery effect, and would be unfair to those who did not have the opportunity to buy these flats.”
The alternative of not building HDB flats in these attractive areas and leaving it entirely to the private sector is also undesirable, he said.
The new framework is a shift from the current system, where new flats are classified under a town-based classification framework of mature and non-mature estates.
There will be projects with different classifications within the same town, due to their different attributes, HDB said.
Additionally, Prime flats will not be limited to just the central area and towns immediately surrounding the city centre, such as Bukit Merah, Queenstown and Kallang-Whampoa. Some projects in Bukit Timah Turf City or along the Greater Southern Waterfront may be Prime flats.
In Kallang-Whampoa town for example, three projects will be launched in the October BTO exercise – “a bumper crop”, noted Lee.
Two projects will be classified Plus – Kallang View and Towner Breeze. Both will be a short commute to the city centre with good transport options and well-developed amenities.
The third project, Crawford Heights, is “one notch above”, said Lee. It will be a five-minute walk from Lavender MRT station and near Kallang Riverside Park as well as the future Kallang Alive precinct, which will house a new 18,000-seater indoor stadium.
Details on pricing and subsidy recovery rates will be disclosed when the flats are launched for sale next week.
Current median resale prices in the locations where the first Prime, Plus and Standard flats will be launched range from S$387,000 for a three-room flat in Jurong West to S$975,000 for a five-room flat in Kallang/Whampoa, and S$988,000 for a five-roomer in Ang Mo Kio in September.
The October BTO exercise will give singles more options in the HDB market. Eligible singles are able to apply for new two-room Flexi flats across Standard, Plus and Prime categories in all locations. Previously, singles were limited to projects in non-mature estates.
HDB will also launch 2,085 BTO flats with a shorter waiting time of under three years. These will be offered in three projects in Bukit Batok and Sengkang.