BTO flats cater to diverse groups: Desmond Lee

Build-To-Order (BTO) flats here are offered with different attributes, price points and grant amounts for a diverse group of flat buyers - not just median-income households but also those in lower income segments, said National Development Minister Desmond Lee.

This means that although BTO flats are highly subsidised, flats in attractive locations will have a higher price point, Mr Lee said at a dialogue at Singapore Management University on Monday.

The discussion centred on public housing affordability, and concern that the next generation could be priced out as flat prices continue to climb. Prices of resale flats climbed for the 27th consecutive month in September.

Mr Lee reiterated that BTO flats remain affordable, and cited two examples from August's launch.

One, three-room BTO flats in Jurong East cost between $194,000 and $245,000. A first-timer couple with a monthly household income of $3,000 - in the bottom quintile of households - can pay the monthly instalments fully from their Central Provident Fund (CPF) accounts, without any cash outlay.

Two, four-room BTO flats next to Woodlands South MRT station cost between $303,000 and $363,000. A first-timer couple earning $5,000 a month - around the 30th percentile of households here - can afford the monthly instalments using only their CPF.

As to why flats of similar sizes are priced so differently, with those launched in Ang Mo Kio costing more than those in Choa Chu Kang, Mr Lee said this is down to location and distance from amenities.

"The Ang Mo Kio project is in the town centre, nearer to the city, and is close to MRT, bus interchange, market, hawker centre, polyclinic, library and shopping malls," he said. "Our offering of BTO flats with different attributes, price points, locations and different levels of housing grants allows us to serve the needs and budgets of a diverse group of flat buyers."

On resale flat prices, Mr Lee reiterated that the Government provides grants of up to $160,000 for first-timers. While million-dollar resale flats have received much attention, such deals make up about 1 per cent of all resale transactions, and the flats often have unique attributes such as lofts, he said.

"Nevertheless, we recognise that there are concerns about rising resale prices, and we have therefore moved recently to moderate demand in the HDB resale market," he added, alluding to cooling measures that took effect from Sept 30.

Mr Lee also addressed worries about the success rate of balloting for a BTO flat. Almost all first-timer households who applied for a BTO flat in non-mature estates succeeded within three tries, while 90 per cent were successful within two tries, he said. The Government is ramping up the supply of BTO flats, and is on track to launch up to 100,000 new flats between 2021 and 2025 if needed, he added.

The dialogue, organised by government feedback unit Reach, had about 70 participants. Most were above 45 years old, and half were professionals, managers, executives and technicians.