Propnexs Comments On Public Housing Announcements At National Development Ministrys Committee Of Supply Debate

02 March 2023, SINGAPORE – The National Development Ministry has announced various housing policy changes to keep public housing accessible for Singaporeans at its Committee of Supply debate today. These comprise measures to give greater priority to specific groups of first-time new flat buyers, and more options for seniors, as well as low-income singles. In addition, the rules for non-selection of flat will also be tightened from the HDB’s August 2023 Build-to-Order (BTO) exercise.

Commenting on the announcements, Mr Ismail Gafoor, CEO of PropNex Realty, said, “The government is fine-tuning the public housing policy to help Singaporeans own their first homes. We think the changes unveiled today are very targeted, zeroing in on specific segments of the population with greater housing needs. Furthermore, in the Budget 2023 speech on 14 February, the government also announced the increase in the CPF Housing Grant amount for eligible first-timer families and singles to buy resale HDB flats. Taken together, this package of measures will go some way to further improving access to public housing as well as making them more affordable for first-time homebuyers.”

Summary of MND COS public housing announcements
A) Greater priority for a subset of first-timer families in their BTO or Sale of Balance Flats (SBF) applications

– New priority category known as First-Timer (Parents & Married Couples) category, which makes up about 10% of all First-Timer family applicants.

– FT(PMC) eligibility criteria: a) Families with at least one Singapore Citizen child aged 18 and below or married couples aged 40 and below; b) Never owned a local residential property; and c) Have not been invited to book a BTO/SBF flat by the HDB in the past 5 years prior to flat application.

– From August 2023 BTO exercise, FT(PMC) applicants will receive one additional ballot chance for their BTO/SBF applications, bringing their total ballot chances to 3 when they apply for any flat type in any estate.

– To expand the current Parenthood Priority Scheme (PPS) so that FT(PMC) applicants are eligible – scheme will be renamed as Family and Parenthood Priority Scheme (FPPS). Up to 40% of BTO flat supply and up to 60% of SBF flat supply will be set aside for the FPPS.

– FT(PMC) applicants applying for 4-room and smaller BTO flats in Non-Mature Estates will be given first priority for flats set aside under the FPPS.

B) Tighten rules from non-selection of flat
– Penalty will kick in after one non-selection count, compared to two counts currently.

– From August 2023 BTO exercise, first-timers including FT(PMC) applicants, who accumulate one non-selection count will be deemed second-timers for a year in the computer ballot.

– Second-timers who accumulate one non-selection count will have to wait one year before they can apply for a flat again.

– HDB will waive non-selection count for applicants who have 10 or fewer BTO flats / 5 or fewer SBF flats to choose from.

Mr Gafoor added, “In our view, the rule change and the waiver of the one non-selection count for applicants who have 10 or fewer BTO flats to choose from, in particular, seems rather strict. The 10-unit figure for BTO flats appears to be low, and we feel that perhaps a proportion of 5% of the units available (especially for larger BTO projects) or raising it to 30 units could be fairer to applicants, who may not be keen on taking up certain flats owing to certain reasons, for instance the unit may have an undesirable facing. Afterall, a flat will likely be their biggest financial commitment and they will have to live in the unit for at least 5 years – given the minimum occupation period – therefore, some applicants may be more selective, and they could be disappointed with the tighter rules.

“The tightening of the non-selection rules sends a clear message to flat applicants to take their BTO/SBF flat applications more seriously, rather than applying just to try their luck or to take an opportunistic shot at trying to get a flat in certain locations. We think this move will help to sift out applicants who are not serious about their applications and could give a clearer picture of the genuine demand for new flats from August 2023 onwards.”

To this end, PropNex anticipates that there may be a fall in BTO application rates after the new rules kick in, as some applicants may decide not to apply before they thoroughly assess their housing needs and priorities. In turn, this will provide those with genuine housing needs a higher chance of securing their flats. PropNex does not expect this change to impact the resale HDB market significantly, but it is possible that some applicants may seek resale flat options, if they are unsure about the BTO offerings.

C) More housing options for Seniors
– To launch the third Community Care Apartments (CCA) – a public housing assisted living concept – in Bedok later this year. The development will comprise about 200 CCA units, as well as other flat types, and communal facilities.

D) More options for low-income singles in public rental housing
– Expand the Joint Singles Scheme Operator-Run (JSS-OR) pilot to three new sites this year in Bukit Panjang, Bidadari, and Sengkang which can accommodate a total of about 600 tenants.

“Overall, we are supportive of the measures that will continue to enhance Singapore’s public housing sector, providing buyers with a wide range of options according to their budget and preferences. For most Singaporeans, the BTO and SBF flats are their first home and it could very well mark the start of their journey to build wealth and capital via real estate, as well as supporting their future aspirations to own a private home,” Mr Gafoor noted.

Scroll to Top