SINGAPORE - There are no plans to cut back on the supply of Build-To-Order (BTO) flats in 2022, and the Housing Board is on track to launch about 17,000 units this year, said National Development Minister Desmond Lee.

In Parliament on Monday (July 26), Mr Lee said next year's supply of BTO flats will be 17,000 units or more, and will not fall below this year's supply.

He added that HDB is continuing to work with contractors to address BTO construction delays caused by Covid-19.

Responding to questions about ramping up BTO supply from Mr Gan Thiam Poh (Ang Mo Kio GRC) and Mr Desmond Choo (Tampines GRC), Mr Lee said: "In spite of the challenges faced, we have continued with our BTO launch plans... For next year, we're still looking at demand and keeping track of the property market and we will announce the figure for the launch soon.

"Having said that, we don't see that we'll be reducing the number of flats launched next year, (it) certainly will be at or above 17,000 flats."

He added that this year's supply of about 17,000 BTO flats is more than the 14,600 flats launched in 2019 and the 16,800 units launched last year.

The last time about 17,000 BTO flats were launched was in 2017, although the figure is a far cry from the peak of 27,000 new flats offered in 2012 to combat the housing shortage then.

Many ongoing BTO projects have been badly delayed by one year or more due to manpower shortages and supply chain disruptions in the construction sector caused by the Covid-19 pandemic.

Newer BTO projects have also been launched with a longer waiting time, some up to five years. Previously, buyers waited about three to four years to get their keys.

Home buyers affected by BTO construction delays may be able to cancel their flat booking without penalties, if they wish to buy a resale flat due to urgent housing needs.

Typically, buyers who cancel their flat booking will have to forfeit either their option fee which ranges from $500 to $2,000, or the 5 per cent of the flat purchase price paid in advance, depending on which stage of the process they are in.

In addition, they have to wait out a one-year period before they can apply for another subsidised unit, either a BTO or resale flat with grants.

On Monday, Mr Lee reiterated that the HDB will consider waiving the forfeiture fees and wait-out period, depending on individual circumstances.

"Going forward, we'll work closely with our contractors to address issues... and work with fellow agencies to ensure that our existing construction projects can get back on track without compromising the safety standards or the quality of the homes that we deliver," he added.

Responding to a question from Ms Tin Pei Ling (MacPherson), Mr Lee said the rise in construction costs will not be passed down to BTO flat buyers.

The rising construction costs will also not adversely affect the demand for green buildings or the Republic's push towards more sustainable developments under the Singapore Green Plan 2030, he added.

On Monday, Mr Lee also said that the Government is monitoring the HDB resale market to ensure it remains "stable and sustainable".

He was responding to a question from Mr Choo, who had asked about how cash over valuation (COV) trended in the past year.

While the number of resale buyers who paid above market valuation increased to more than one in three in the first half of this year compared with one in five from last year, Mr Lee said the median COV remains at $0.

The COV is paid when a resale flat is sold above its actual HDB valuation; the difference can be paid for only in cash by the buyer.

The increase in the number of buyers who paid a COV comes against the backdrop of steadily rising prices for such flats.

Resale prices have increased by 6 per cent in the first half of this year and 5 per cent in the whole of last year.

On the expected number of BTO flats for next year, ERA Realty head of research and consultancy Nicholas Mak said keeping the supply at about 17,000 is a "prudent" decision.

Mr Mak said: "If HDB reduces the BTO supply, it could add fuel to the HDB resale market and cause prices to further increase. However, if supply is increased by too much, there is also the question of whether HDB can deliver them on time.

"So keeping it at about 17,000 units is the most neutral way, and the figure can be adjusted accordingly later in the year, depending on the situation."