The property market in Singapore has always seen a huge demand for new BTO flats. Many of us aim for a BTO to move out and set up our own homes after tying the knot, and let’s admit it, some even use the BTO application as a clever way to propose – no judgement here!
But hold onto your hats because 2024 is shaping up to be quite a game-changer for the BTO market. Just a few days ago, Minister for National Development Desmond Lee spilled the beans on some significant changes planned for this year during a media interview. These changes could seriously shake up how we approach buying a BTO flat in the future.
So, if you’ve been holding back on that BTO application but have finally decided to take the plunge in 2024, stick around as we unpack all the juicy details and examine how they might impact you.
Lower number of BTOs planned for this year and 2025
This year, there will be 19,600 BTOs available for sale. Notably, this figure is lower compared to the past two years, which saw 22,780 BTOs launched in 2023 and 23,184 in 2022. However, delving further back, the number of launched BTOs in previous years falls significantly below this year’s quota, with 17,109 in 2021, 16,752 in 2020, and 14,591 in 2019.
Minister Lee attributed this year’s decreased BTO supply to the unusually high application rates during the Covid years of 2020 to 2022. As demand has now moderated, the supply of flats has been adjusted accordingly. As part of the Government’s commitment to release 100,000 flats between 2021 and 2025, this recalibration suggests a further decrease for 2025. It’s estimated that approximately 17,327 BTOs will be launched during that year.
While the diminishing supply of BTO flats might trigger initial concerns for this year and the next, there’s no need to fret just yet! Another crucial factor to consider is the application rate, indicating a BTO flat’s popularity among potential buyers. In 2023, statistics revealed a first-timer applicant rate of 1.9, notably lower than the 3.7 recorded in 2019.
Now of course, the actual application rate will vary across estate and flat types. However, with the overall decline in competition for flats, it appears that first-timer applicants will have an improved chance of securing a BTO this time around. This news is certainly encouraging for those planning to enter the market this year.
3 BTO exercises this year instead of the usual four
Over the past 8 years, we’ve grown accustomed to the regular cadence of four BTO exercises annually, usually held in February, May, August, and November.
Yet, starting this year (and likely continuing in the following years), there will be a shift to three BTO exercises per year. In 2024, these exercises are scheduled for February, June, and October. As per the HDB, the reduction in sales exercises implies that “home buyers can anticipate a larger housing supply in each launch,” offering a broader range of choices and increasing the likelihood of securing a BTO. This adjustment aims to “minimise overlap between selection exercises, providing greater assurance for home buyers.”
All things considered, this change is beneficial for most potential homebuyers. With more BTO flats available for sale in each exercise rather than spread across multiple events, the chance of securing a flat is higher.
The elongated time between BTO exercises encourages homebuyers to be more decisive and committed to their chosen flats. This shift is expected to discourage individuals who are casually trying their luck at securing a BTO, streamlining demand to its genuine size rather than artificially inflating it.
1 SBF exercise this year instead of the usual 2
Apart from the adjustments to BTO flats, there’s another change: the biannual Sale of Balance Flats (SBF) exercise has been consolidated into a single event, slated for February this year.
Similar to the rationale behind the BTO modifications, the purpose of consolidating the SBF flats into one comprehensive release is to enhance the success rates for applicants, as opposed to spreading them across two exercises.
To recap, SBF flats encompass leftover units from past BTO launches, replacements from SERS exercises, or government-repurchased flats. Due to this, they often boast shorter completion times compared to newly launched BTOs. If time is a crucial factor and you prefer a quicker transition to your new home, considering an SBF flat would be an excellent option.
New classification of HDB flats starting October
If you missed it last year, there’s a significant shift on the horizon in the HDB market regarding flat classification.
Until now, HDB flats were categorised into two groups: mature estates (regions with high demand but limited land space) and non-mature estates (areas with more land space but fewer available amenities). This classification impacted various factors, including eligibility for housing grants, ballot chances, and the allocation of flats specifically reserved for first-time applicants within a project.
Starting from October, which marks the final BTO exercise for 2024 and also the most extensive, flats will now be classified as either Prime, Plus, or Standard.
Prime flats will be situated in areas like Queenstown and Kallang/Whampoa, Plus flats in locations such as Ang Mo Kio and Tampines, and Standard flats encompassing other estates across Singapore, such as Tengah and Punggol. It’s essential to note that this classification solely applies to new flats from October onward and will not retroactively affect existing flats or the current resale market.
Upcoming Feb BTO exercise
For the first upcoming BTO exercise of 2024, expected in about a month, approximately 4,100 flats will be available for sale in Bedok, Queenstown, Choa Chu Kang, Hougang, Punggol, and Woodlands.
The largest supply appears to be in Bedok, Punggol, and Woodlands, each featuring over 900 flats for sale. Notably, these estates will offer 5-room flats, which are in high demand.
In addition, around 1,500 Sale of Balance (SBF) flats will also be up for sale. Overall, this February BTO exercise will offer a total of 5,600 flats, marking a considerable number comparable to the density of flats available during past years’ quarterly BTO exercises.
All you need to know about HDB BTOs in 2024
As we dive into 2024, the proposed changes in the BTO market appear to align with the Government’s goal of providing ample public housing to those in need.
The adjustments, promising higher chances of securing a flat during BTO exercises and a more refined approach to flat classification, indicate an effort to streamline BTO demand without excessively manipulating market forces.
In conjunction with the BTO cooling measures initiated last year, such as the loss of first-timer status for those rejecting flat selections despite invitations, the objective is clear: encourage more decisive and committed behaviour among applicants. These measures aim to discourage aimless applications at every BTO exercise, ultimately curbing inflated demand and enhancing the chances for genuine applicants to secure their desired flats.
Read more HDB-related articles here:
Cover image adapted from: DALL.E
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