SINGAPORE - Around 17,000 Build-to-Order (BTO) flats will be launched in 2018, maintaining a level of flat supply similar to this year's, National Development Minister Lawrence Wong announced in a blog post on Thursday (Dec 14) morning.
These new flats will be spread around mature and non-mature towns. These include the upcoming Tengah town, the first time that Housing Board flats will be launched there.
Sembawang, Yishun and Sengkang will also see flat launches in the second half of the year that feature a shorter wait time of 2½ years, compared with the typical three to four years.
Said Mr Wong: "We will continue to calibrate our flat supply carefully, taking into account underlying demand and the stability of the HDB resale market."
Taking stock of the public housing situation, Mr Wong said the Government rolled out several moves to help first-timer families move into their homes quickly.
In February, flat buyers saw a sizeable increase in the Central Provident Fund (CPF) Housing Grant that they could tap - from $30,000 to $40,000 or $50,000, depending on flat size - when buying from the resale market.
Nearly 6,900 first-timer households have benefited from this enhanced grant, said Mr Wong.
Rental subsidies for the Parenthood Provisional Housing Scheme, in which vacated HDB flats are rented to couples waiting for their new flats, were raised as well. This benefited about 840 households.
In August, HDB also launched its first Re-offer of Balance Flats (ROF) exercise for those with more urgent housing needs. Around 800 households have booked a flat in the exercise, which is still ongoing.
ROF features unsold flats from previous Sale of Balance Flats exercises and will be held twice yearly.
Said Mr Wong: "All this means that young couples will have even more affordable and accessible housing options to start their marriage and parenthood journey early."
Real estate watchers told The Straits Times that the move to build 17,000 new flats in 2018 is not a surprising one – it was clear the authorities had a goal to provide affordable housing to first-time flat buyers.
Said PropNex Realty chief executive officer Ismail Gafoor: “There is a clear indication that the number of flats announced by the minister for next year is indeed adequate, providing Singaporeans ample chance to secure a unit of their choice."
This makes it the third consecutive year that the BTO flat supply is hovering at the 17,000 mark – there were 17,584 units launched this year and 17,891 in 2016.
Around 25,000 BTO flats were launched in 2011, 27,000 in 2012 before dipping back to 25,000 in 2013, 22,500 in 2014 and 15,000 in 2015.
Meanwhile, demand for BTO flats appears to have slipped slightly in 2017. The overall subscription rate for three-room and bigger flats in 2017 was 2.4 times, compared with the 2016 rate of 3.4 times, OrangeTee’s head of research and consultancy Wong Xian Yang pointed out.
The latest BTO supply figure is a “safe approach” due to the introduction of the Re-offer of Balance Flats exercise and flats with shorter waiting times, allowing the authorities more time to monitor these schemes, said ERA Realty’s key executive officer Eugene Lim.
While 2017 featured a wave of collective sales in the private property market, it did little to influence the BTO numbers for next year, analysts said. This is because they have different markets – with a good portion of private home buyers buying them for investment purposes.
But the collective sale fever could exert an upward pressure on prices in the resale market, said Associate Professor Sing Tien Foo of National University of Singapore’s Department of Real Estate.
“If the resale and private housing prices continue to increase in 2018 due partly to the demand from en bloc owners, we may expect spillovers to occur from the resale and the private housing markets to the BTO markets,” said Prof Sing, adding that these affect only those who meet the income threshold to buy a BTO flat.
Said JLL Singapore’s director of research and consultancy Ong Teck Hui: “An adequate supply of BTO flats will temper demand for resale flats and keep resale prices in check. Therefore, upgraders (from HDB to private property) could be more realistic in what they are prepared to pay for private homes.”
One highlight of Mr Wong’s post was Tengah, which is located near the upcoming Jurong Innovation District and will boast a car-free town centre and driverless buses.
Tengah is expected to grow in popularity over the years, though home buyers might not immediately see its appeal as it is still developing, said industry watchers.
Said Mr Lim: “As it is the launch of the very first flats in the new town, demand may be a little slow at the beginning, especially when buyers also have choices from other more established housing estates. “However, as the development of the new town progresses, we should be seeing increased demand for the flats there.”