Summary of Housing Policies Changes from National Day Rally 2023

Every year our dearest Prime Minister will make a most important political speech which is the National Day Rally. This year, a substantial number of changes on housing has been announced. Let's do a summary of the changes.

Basically, despite all the mass of news (and pretty infographics), there are two major areas of changes.

Change 1 : New Plus housing model

Change 2 : Enhancing housing access for singles

That's all :)

Bye Bye Mature and Non-Mature Estates

In 1992, the Housing and Development Board (HDB) initiated the classification of HDB estates into two categories: mature and non-mature estates.

This classification was made in conjunction with revisions to the balloting process, aimed at granting priority to first-time applicants and individuals who had previously faced repeated setbacks in their housing applications.

This is no more from Second Half of 2024. The removal of "mature vs non-mature estates" do NOT affect current flats, current BTO construction and in fact, does not take efffect till late in second half of 2024. One year away.

Hello Three Tier Model of Standard, Plus and Prime

Going forward in 2024, a new classification system to differentiate BTO projects by their locational attributes. No more mature and non mature. Instead, it is replaced by a three tier model of "standard" (aka current BTO model), "plus" (a new model of selling HDB flats) and "prime" (aka the current Prime Location Housing or PLH model).

In late 2024, a new class called "Plus Flats" will be introduced to the BTO model.

a) Standard flats will come with the standard subsidies and standard restrictions that are applied to all BTO flats. They will continue to form the bulk of the housing supply. This is just like BTO today. Nothing changes.

b) Plus flats, a new category of flats,will be in choicer locations within each region across Singapore (e.g. near MRT station, town centre). These flats will come with more subsidies and 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 three categories, and will have the tightest conditions. These flats are already currently offered under the PLH model.

Key Features of the Plus Housing Model

(Just added) Income Ceiling for Resale of Plus Flats
A $14,000 income ceiling has been set for the resale of Plus flats. That means your buyers of your Plus flats cannot make more than $14,000 per household. See this blog post on the income ceiling for Plus flats for more details.

Enhanced Subsidies for Affordability
Plus flats, in prime locations, receive extra subsidies, making them more accessible to a broader range of Singaporeans.

Subsidy Recovery upon Resale
Plus flat owners's purchase price will have additional subsidies to ensure affordability. But to ensuring fairness compared to non-subsidized flat owners, Plus flat owners will have to pay a proportion of the resale price, reflective of the extra subsidies, if they choose to sell their flats later on. Recovery rates for Plus flats are, however, lower than Prime flats.

Strengthened Sale Conditions
Owners must reside in Plus flats for at least 10 years before selling or investing in private properties. In other words, just like PLH, MOP is 10 years ! It is expected that much more stringent resale conditions aim to maintain affordability and a diverse community although it is NOT yet announced what are these conditions.

Key Considerations for You If You are Keen on a Plus BTO Flat

Details are still not here, but an immediate thought is this. Just like the PLH model buyers, a VERY LONG TERM view is necessary

Buyers of the Plus BTO flats should prepare for an extended commitment, encompassing a 4 or 5 years construction period and a 10-year MOP. This contrasts with the construction period plus a 5-year MOP for Standard BTO flats, or just a 5-year MOP for those choosing to purchase existing resale flats.

Prospective buyers will need to meticulously weigh their plans for starting a family, selecting future schools, and their home improvement journey, as they will be bound to their Plus/Prime flat for approximately 15 years.

Another concern revolves around whether the lengthier MOP and the constraints on Plus flats might unintentionally redirect some BTO demand towards Standard flats, which still maintain the typical 5-year MOP and lack resale restrictions. This potential surge in demand could potentially heighten the competitiveness of the ballot for a Standard flat. After all, a shorter MOP is easier to manage than a longer one.

As I always, "how many 10 years you have in your life" :)

Singles Buying HDB are Happier in 2024

Singles buying properties in Singapore is always challenging. This is just part and parcel of the "pro family policies" in Singapore.

However, even the Prime Minister has acknowledged that many singles (with votes...) are choosing to be singles. What was made worst was that in the current PLH model, singles do not even have a chance to buy (BTO or resale) flats in any PLH flat. It is not very inclusive, is it :)

In reality, shifting lifestyles and evolving social aspirations have led to a rising number of singles opting for independent living in their own flats rather than residing with their families. Many singles expressed their desire for flats in mature estates, as they seek proximity to their elderly parents for mutual care and support.

So changes are coming.... in 2024....

Currently, first timer singles aged 35 and above are allowed to apply for new 2-room Flexi flats in only non-mature estates or buy resale flats in any estate. With the new classification in late 2024, eligible first-timer singles can:

(1) Apply for 2-room Flexi BTO flats in all locations across Standard, Plus and Prime housing projects;
(2) Buy a Standard or Plus flat of any size in the resale market; or
(3) Buy a 2-room Prime flat in the resale market.

A table of the changes to HDB for Singles in 2024

Basically the change is that what used to be NOT AVAILABLE to Singles (BTO in mature estate, Resale in PLH) is now available to Singles.

FAQ on the changes of Housing Policies Changes from National Day Rally 2023

Question : What is the difference between Mature and Non-Mature Estates for BTO Balloting

Answer : Mature estates encompassed areas where the availability of land for public housing development was constrained, yet the demand remained robust. Within these mature estates, Build-To-Order (BTO) flats consistently garnered heightened popularity and were consequently priced higher to reflect their advantageous location and heightened demand.

Non-mature estates, on the other hand, comprised regions where there existed a greater expanse of land earmarked for public housing development. Typically situated in less central locations and endowed with fewer amenities, these estates offered more affordable housing options.

Question : What are the Mature and Non-Mature Estates in Singapore now in 2023 ?

Answer : Here's a list of Mature Estates and Non-Mature Estates in Singapore as at August 2023

Question : What are the tighter conditions that Plus flats will come with, and how will they support genuine homebuyers?

Answer : Plus flats will come with tighter conditions compared to Standard BTO flats, including a longer Minimum Occupation Period (MOP) of 10 years before they can be sold in the open market or invested in a private residential property.

Plus flat owners will also have to pay a proportion of the resale price reflective of the extra subsidies if they choose to sell their flats later on, to ensure fairness across all homebuyers and mitigate excessive windfall gains. These tighter conditions will support genuine homebuyers by strengthening their owner-occupation intent and moderating demand and prices of these flats, keeping them affordable for future resale buyers and maintaining a better social mix in the long term.

Question : How will the new classification of flats better reflect the locational attributes of HDB's BTO projects?

Answer : The new classification of flats will better reflect the locational attributes of HDB's BTO projects by introducing two new categories of flats: Plus and Prime.

Plus flats will be located in choicer locations within each region across Singapore, such as near MRT stations and town centers, while Prime flats will be in the choicest locations within Singapore, usually closer to the city center.

Standard BTO flats will continue to be offered islandwide. Plus flats will come with more subsidies and tighter restrictions compared to Standard BTO flats, while Prime flats will come with the most subsidies across the three categories and the tightest conditions.

This new classification will provide homebuyers with better connectivity and closer proximity to amenities, and help ensure that public housing remains inclusive to all Singaporeans.

Question : Where are the Standard, Plus and Prime flats likely to be offered ?

Answer : Of course, the government is not going to allow just an area of Prime in one part of Singapore (HDB in Bukit Timah anyone ? 1km to top schools anyone ?). There is always going to be a mixture.

However, this infographic gives an idea. For example, in the north part of Singapore, you will not find PRIME BTO flats, but definitely Standard flats and some Plus flats (e.g. close to Punggol Waterway etc). In the city (e.g. Kallang), you probably not going to find Standard (else the JACKPOT effect comes into place) and hence you will find Plus (10 years MOP) or Prime (10 years MOP).

Question : What are the changes to Singles Buying HDB Flats as announced in the National Day Rally 2023 ?

Answer : Eligible first-timer singles can:

• Apply for 2-room Flexi BTO flats in all locations across Standard, Plus and Prime housing projects;
• Buy a Standard or Plus flat of any size3 in the resale market; or
• Buy a 2-room Prime flat in the resale market. This was NOT possible previously.

Question : Can a single over 35 buy 2 Room BTO flat anywhere in Singapore

Answer :

• 2023 : Cannot. Can only buy in non mature estates
• Late 2024 : Can. As there are no such thing as mature or non mature. Singles over 35 can buy any 2 Room BTO flexi flats in Standard, Plus or Prime. Provided there are such flats released in the BTO exercise. Grab one while you have it.

Question : Can a single over 35 buy a resale flat in the PLH flats

• 2023 : Cannot. Not allowed.
• Late 2024 : Can. Under a new scheme, singles can buy a 2 room flat in the Prime HDB flat. Singles can buy any size in standard or plus HDB flat. But hor.. PLH has a 10 years MOP. No PLH (as at 2023) has even TOP yet. So you are talking about almost 10-12 years away. In 2035, singles that are more than 35 years then can buy Prime HDB flat.