SINGAPORE – Build-To-Order (BTO) flats in mature estates are more expensive than those in less popular locations with fewer amenities. But they must still be affordable to a wide spectrum of Singaporeans to ensure overall equality in the public housing system.

This is important as more and more new flats are being built in mature estates, said National Development Minister Desmond Lee.

All new flats should continue to be affordable and accessible to Singaporeans within the BTO eligibility band. Yet location and other attributes must also be taken into account when prices are set, said Mr Lee in a wide-ranging interview with The Straits Times last Monday.

Naturally, those in mature estates or flats in areas that have better attributes will be priced higher. “I think Singaporeans accept that”, he added.

The broad aim of Singapore’s public housing policy is to ensure fairness in the way subsidies, housing grants and market discounts are given, while maintaining affordability.

Mr Lee said that the eligibility band for BTO flats is “very broad”, covering low-income families all the way to upper-middle families earning up to $14,000 – around the 70th percentile of household incomes.

In 2019, the income ceiling was raised from $12,000 to $14,000.

The push towards greater housing equity is part of overall efforts under the Build pillar of the Forward Singapore exercise, which is now midway through. The other five pillars cover issues relating to jobs, education, social support, environment, and the Singapore identity.

The exercise, which focuses on shaping Singapore’s future and social compact, has engaged more than 14,000 Singaporeans since it was launched in June 2022.

Now in the second and final phase, it will conclude in the second half of 2023 with a report.

The way estates are classified into mature – which is deemed by default to have better amenities and transport connectivity – and non-mature is also being relooked, said Mr Lee, as it plays a part in driving buyers’ choices and has an impact on how properties are priced.

“It’s very easy to stick to the status quo... I think we must give it a rethink... It should reflect what (people) see as reality on the ground today versus years ago when the classification was first drawn up,” he said.

Estate classification, which started in 1992, is based on the physical attributes of the estates, such as transportation networks and amenities.

Suggestions received so far range from getting rid of the labels altogether to classifying each BTO site based on its attributes instead of the estate it falls under, he said.

The review is a “work in progress” with “some way to go”, the minister added.

“Whatever we decide on – whether to retain the status quo, update based on the status quo, adjust or even completely do away (with it) – we must understand the ramifications”, he said.

On the high demand for flats in mature estates, including from those who wish to live near their families, Mr Lee said it is an aspiration his ministry wants to help them meet.

BTO flats in mature estates typically take longer to build, as the surrounding areas are more built-up.

Mr Lee said: “While it is, to some people, intuitive to focus on just building in non-mature estates and forgoing mature states, I think we can push ahead with the ramp-up in new estates while also increasing the supply that comes from mature states.

“It is possible and certainly necessary to make sure we launch in both mature and non-mature estates even as we tackle this situation of high demand.”

He reiterated, though, that his ministry’s first priority is to hand keys over to buyers by ramping up construction to make up for delays caused by the Covid-19 pandemic.

“That has been our focus for 2020, 2021 and much of 2022. We’re still grappling with this, but I think we’re turning the corner on delays,” he said.

In 2022, more than 20,000 flats were completed and around 17,000 sets of keys were issued to buyers – a 15 per cent jump from the year before.

As part of the Forward Singapore exercise, more support measures for first-timer home buyers have been announced, along with more help for public rental tenants.

These include setting aside more flats for first-timer families with children aged 18 and below, as well as married couples aged 40 and below.

First-timer applicants who do not select a BTO flat when invited to do so will have their privileges suspended for a year – a move to prevent hogging of the BTO queue.

One idea that his ministry considered was to raise the non-refundable BTO application fee from $10 to $1,000, said Mr Lee. But it was eventually rejected as it would also affect genuine home buyers.

“If you don’t get to book, you don’t get (the money) back and the sum is very large. Ultimately, it’s an administrative fee and we didn’t want to use that, at least now, as a deterrent,” he said.

Measures to help other groups of Singaporeans have also been announced, or are in the works, added Mr Lee.

Singles, for instance, will also benefit from the increase in the CPF Housing Grant to purchase their first Housing Board resale flat, just like families.

On the public rental front, a new type of housing in which low-income individuals have their own room but share common facilities such as toilets and kitchen will be rolled out at the end of 2023.

Another public rental housing model – Joint Singles Scheme Operator-Run – will expand to three new sites in Bukit Panjang, Bidadari and Sengkang in 2023.

Studies on how to enable people with disabilities to live as independently as possible is also under way, with inputs from other government agencies and social service sector partners, said Mr Lee.

Better support for seniors is also in the pipeline, with the third Community Care Apartments set to launch in Bedok in 2023.

“Home ownership resonates very strongly with Singaporeans although there continues to be a whole diverse range of views about housing options at different stages in life, in both private and public markets, and concerns about housing for more vulnerable communities,” said Mr Lee.

“We must find some way, in our report, to reflect the sheer diversity and richness of ideas that have been shared with us by experts, academics, people in the real estate sector and the community.”