Chief Editor August 24 2023

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Introducing the New HDB Build-to-Order (BTO) Framework: Standard, Plus, and Prime flats

In a significant move set to reshape the housing market, the Housing and Development Board (HDB) has announced a departure from the long-standing mature and non-mature framework for Build-to-Order (BTO) projects. Starting from the second half of 2024, a new categorization will be implemented: Standard, Plus, and Prime flats. This strategic shift aims to offer greater variety, enhance accessibility, and promote long-term affordability for homeowners.

The Three-Tiered Approach

The new BTO framework brings forth a three-tiered categorization of flats, each catering to specific needs and aspirations of Singaporean residents. The categories are named Standard, Plus, and Prime, each representing varying levels of amenities, location advantages, and resale conditions.

1. Standard Flats: As the name suggests, these flats adhere to a more traditional offering. While they may lack the extravagant features of higher-tier options, they provide a solid foundation for families seeking a comfortable and functional living space.

2. Plus Flats: Positioned as the mid-tier option, Plus flats offer a significant upgrade from the Standard category. They are strategically located in desirable areas such as transport nodes or town centers. This convenient placement comes hand-in-hand with increased subsidies, making homeownership in these prime locations more accessible.

3. Prime Flats: At the top of the hierarchy, Prime flats offer the pinnacle of modern living. These residences boast luxurious features and are strategically located in premium locales. While these flats may come with a higher price tag, they cater to those who prioritize an upscale living experience.

Reinventing Resale Conditions for Sustainability

One of the most significant changes in the new framework pertains to resale conditions. These conditions are designed to ensure the long-term affordability and inclusivity of the housing market. For HDB Plus flats, in particular, tighter resale conditions will be implemented. This includes a minimum occupation period (MOP) of 10 years before owners are allowed to sell their flats on the resale market.

Furthermore, a notable restriction is that owners of Plus flats will not be permitted to rent out their entire flat at any point. This measure aims to maintain the integrity of the residential community and prevent speculative practices that could distort the public housing market. Therefore, only room rentals are permitted by HDB for Plus owners. 

Resale Restrictions for Affordability

To safeguard the affordability of these flats for successive generations, HDB is introducing certain restrictions for resale buyers. A 30-month wait-out period will be applicable for private property owners interested in purchasing these Plus flats.

Additionally, there will be a household income ceiling for resale buyers, with the ceiling set at S$14,000 for both families and singles interested in Plus flats. This mirrors the prevailing BTO income ceiling for married couples and encompasses the majority of Singaporean households.

Moreover, to maintain the subsidized nature of Plus flats, owners who choose to sell will be required to return a portion of the resale price reflective of the additional subsidies they received. This is likely intended to prevent windfall gains from subsidies while promoting fairness in the resale market.

Toward a More Inclusive Future

The introduction of the new BTO framework marks a pivotal moment in Singapore's public housing journey. By offering a range of choices that cater to various preferences and needs, the HDB is fostering inclusivity and promoting economic diversity within neighborhoods. The updated resale conditions and restrictions ensure that housing remains affordable and accessible beyond the initial ownership, safeguarding the interests of future generations of homeowners.

As Singapore continues to evolve, so too does its approach to housing. The Standard, Plus, and Prime framework represents a bold step forward in achieving a harmonious blend of functionality, luxury, and affordability in the city-state's ever-changing housing landscape.

Propertyforsale Managing Director, JT Chia predicts that the Plus flats will appreciate the least in terms of resale value because the risk reward ratio does not favour the speculators.

"The private residential resale volume will drop in the near future as these Plus or Prime homeowners need to abide to 10 years MOP before they could upgrade from a HDB flat to a condominium," said Mr Chia.