Muted demand for some Plus, Prime HDB flats as first-time buyers weigh stricter resale conditions

SINGAPORE – At the close of the

latest Build-To-Order (BTO) sales exercise in February,

all first-time buyers of three- and four-room flats in Toa Payoh’s Kim Keat Crest were virtually guaranteed the chance to pick a unit.

Such muted demand in a mature estate would once have been a rarity. But under the current

Standard, Plus and Prime classification system

, some flats with stricter resale conditions – such as those in Plus project Kim Keat Crest – are undersubscribed among first-time applicants.

This is especially the case for Plus projects in less-than-ideal locations, and three-room flats in Prime projects where other flat types have proven more popular.

This subdued demand has also contributed to a bigger supply of balance flats.

Plus and Prime flats are typically closer to the city centre, transport nodes and amenities. As such, they come with stricter resale conditions such as a

10-year minimum occupation period (MOP) and subsidy clawback,

with a higher clawback rate for Prime flats. This is to limit the “lottery effect” that allows owners of flats in such attractive locations to sell for a substantial profit upon reaching the usual five-year MOP. In contrast, Standard flats have a five-year MOP and no subsidy clawback.

Prime flats were first rolled out under the Prime Location Public Housing model in November 2021. The current classification system, which introduced Plus flats, was implemented in October 2024.

In 2021, before stricter resale restrictions kicked in for Prime projects, BTO projects in Bukit Merah, Queenstown, Toa Payoh and Kallang/Whampoa were consistently oversubscribed with around five buyers vying for a four-room flat.

But in the latest sales exercise, three-room flats at Redhill Peaks in Bukit Merah saw a first-time application rate of below one. This was even though four-room flats in the Prime project were oversubscribed, with more than two first-time applicants per unit.

At the previous launch in October 2025, three- and four-room flats in Plus project Oak Ville @ AMK were also undersubscribed among first-time buyers.

And the supply of balance flats could have increased as a result.

In the February sales exercise, some 4,320 balance flats were put up for sale, more than the 3,000 units that the HDB had initially committed to.

Many of these unsold flats from earlier BTO exercises turned out to be Prime and Plus flats in Bukit Merah, Kallang/Whampoa and Queenstown.

Checks by The Straits Times showed that 22 Prime or Plus BTO projects were among those that offered balance flats. Of these, 13 projects saw at least one flat type undersubscribed during its initial launch.

In particular, three-room flats in Prime projects tended to have low application rates.

Even after the most recent sales exercise concluded on Feb 11, three- and four-room balance flats in Queenstown – which had a mix of Prime and Standard flats – remained undersubscribed among first-time applicants.

Demand was also muted for Prime and Plus balance flats in Bukit Merah and Kallang/Whampoa.

In a written parliamentary reply on Feb 25, National Development Minister Chee Hong Tat said HDB now has close to 900 unselected flats from Sale of Balance Flats exercises. These flats – mostly three-room and larger – are located all over Singapore.

The softer demand for Prime and Plus flats can be partly explained by HDB ramping up flat supply post-pandemic. Between 2021 and 2025, some 102,400 new flats were launched.

As a result, application rates for BTO flats have come down since 2020, when the median rate for three-room and larger flats stood at seven, meaning that there were seven applicants for each flat.

In 2025, the rate dipped to between 1.1 and 1.9.

In the HDB resale market,

prices were unchanged in the fourth quarter of 2025

– a respite from the continuous quarterly price growth since the second quarter of 2020.

These figures indicate that housing demand has largely moderated. But there are other reasons why some Prime and Plus flats are undersubscribed, just over a year into the new flat classification system.

Why the muted demand?

First, first-time home buyers are weighing whether stricter resale conditions – in particular, the 10-year MOP – are worth it.

Speculative buyers are weeded out, while serious buyers who intend to live in their flats for the long run are given a higher chance to book one. This is the intended effect of the policy.

However, three-room flats may not be popular among young families given the space constraints, as they are typically around 60 to 68 sq m. In comparison, new four-room flats are around 88 to 93 sq m.

Families are likely keeping in mind the space needed to grow their family in the years after collecting their keys. With a 10-year MOP to contend with, many would opt for a bigger flat to accommodate their children’s needs. Over time, this could lead to an accumulation of unsold three-room Prime and Plus balance flats.

Some locations not desirable enough

A second reason for the weaker demand is that some Plus projects may not be in locations that are desirable enough for buyers to stomach the additional restrictions that will apply.

For example, property analysts pointed out that Kim Keat Crest in Toa Payoh is a distance from Toa Payoh Central. It is a 20-minute walk or 10-minute bus ride from Toa Payoh MRT station.

Mr Eugene Lim, key executive officer of property agency ERA Singapore, said most applicants who are willing to take on the strict resale regulations for Plus flats look for advantageous location attributes, such as being within walking distance of an MRT station. “Flats that require a longer commute to the MRT are commonly classified as Standard,” he noted. “Hence, they might be discouraged from applying for this project.”

In contrast, application rates for two Tampines BTO projects – one of which was a Plus project in the heart of Tampines Central – saw high demand, with more than seven first-time applicants vying for each of the four-room flats.

The Plus project, Tampines Nova, is a five-minute walk from Tampines MRT station and Our Tampines Hub, and there are three shopping malls and various amenities in the area.

Ms Christine Sun, chief researcher and strategist at property firm Realion (OrangeTee & ETC) Group, said this is a rare site given the scarcity of land for new development in the Tampines Central area.

“Projects situated near MRT stations will continue to appeal to buyers, given the convenience (they offer),” she added.

It is unclear if projects in towns such as Ang Mo Kio and Toa Payoh fall under the Plus or Prime classification by default, given their proximity to the city centre, or if future projects in such towns may be classified as Standard projects if they are farther from the town centre.

A clearer picture of how the flat classification system works would help buyers make a more informed decision on the projects to apply for, based on the conditions they are willing to take on.

This is already the case for BTO launches.

Alongside each launch, HDB releases the locations of the projects in the following launch. These details allow buyers to decide which launch to apply for, given that applicants with a queue number cannot apply for subsequent sales exercises.

The muted demand for three-room flats also serves as a signal to HDB on how to adjust future flat supply.

Mr Chee had previously acknowledged that there is demand for five-room flats in Prime and Plus projects, where such flat types are not available.

If more five-room flats are built, the trade-off is fewer units of other types, he said in January. But he also empathised with the needs of larger families, saying he “will see what we can do to build more five-room flats” without reducing supply elsewhere.

Rather than leaving unsold flats on the market, it might be prudent for the HDB to adjust the three-room flat supply, so as to cater to the demand for four-room and larger flats.

To be clear, a glut of such unsold flats – reminiscent of what Singapore saw in the late 1990s – is unlikely to happen, given the overall firm housing demand today. And a pool of unsold flats is not necessarily a bad thing, as these can be offered as balance flats to those with more urgent housing needs.

As a whole, the current classification system has made flats in attractive locations more accessible to serious buyers.

But recent application trends have also pointed to dampened demand in certain locations and among certain flat types.

Such an outcome is perhaps not the intended outcome of the BTO system, which is designed such that flat supply is fundamentally driven by demand.