Remember what happened during the National Day Rally 2023 speech? In particular, do you recall the two announcements that saw a shake-up in public housing policy?
From H2 2024 onwards, the current ‘mature’ and ‘non-mature’ HDB estate classifications would disappear. Instead, BTO flats launched will be labelled as Prime, Plus or Standard flats. Also, singles could apply for all 2-room Flexi BTO flats, regardless of location. When buying from the open market, singles can buy any size, including resale Plus and Standard flats. However, for Prime flats, they were limited to 2-room flats only.
In our latest Singapore Consumer Sentiment Study H1 2024, many Singaporeans welcomed these new policies. Let’s dive in to learn more.
Study: Many Singaporeans Welcome NDR 2023 Property Policy Changes
According to Prime Minister Lee Hsien Loong, the new classification framework needs “to ensure homes here remain affordable, with a good social mix in towns, and the system is fair for all.”
Prime and Plus flats would have tighter restrictions placed upon them. For instance, they would have a 10-year Minimum Occupation Period (MOP), subsidy clawback upon resale, and owners are not allowed to rent the entire unit even after the MOP is up.
Of those surveyed, two in five agreed the introduced policies would make HDB flats more affordable and accessible for all Singaporeans, compared to 26% of Singaporeans who disagreed. This positive sentiment reverberates more strongly among those who identify as high-income (i.e. Singaporean households earning more than $10,000 a month) and Singaporeans between the 22 to 29 and 30 to 39.
Housing affordability has been a growing concern. Throughout the COVID-19 pandemic, prices of HDB and private property rose steeply and reached record highs. However, housing prices are not expected to rise indefinitely.
According to our Singapore Property Market Outlook 2024, signs of price moderation and slowing transaction volumes have already been observed. The gradual supply restoration in public and private housing markets will likely result in further stabilisation.
37% of Singaporeans Welcome NDR 2023 Property Policies for Singles
37% of the respondents believe these NDR 2023 changes were “sufficient” in making housing accessible for singles. However, the issue of size came up. 68% and 66% of those surveyed felt single Singaporeans should be allowed to buy BTO and Prime resale flats larger than 2-room Flexi flats, respectively.
Slightly more than three in five surveyed (62%) felt the age restriction for singles should be lowered from the current age of 35. While 35 remains the magic number for many looking to buy HDB flats independently, there has been much debate in parliament. Whether or not this age will be altered shortly is anyone’s guess.
So what do single Singaporeans think of the changes in the National Day Rally 2023? While some appreciated they could more easily buy homes near their ageing parents and felt less anxiety about housing affordability, others were not as welcoming towards the new policies.
The main gripe was not being able to sell their homes for as much profit as they hoped. Moving up the property ladder by becoming an HDB upgrader and buying a condo or owning an HDB flat and condo simultaneously becomes more difficult.
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How Will NDR 2023 Announcements Affect Demand for Prime Flats?
Prime flats are set to have the strictest selling conditions of the three BTO classifications. Most surveyed are supportive of these measures. In large part, respondents believe these changes will effectively keep properties near MRT stations and the city centre more affordable (60%).
Additionally, 58% agree that the 10-year Minimum Occupation Period (MOP) for Plus and Prime flats will help to keep their HDB resale flats in attractive locations that are affordable. However, there is concern these restrictions will push down demand for Prime flats.
Dr Lee Nai Jia, Head of Real Estate Intelligence, Data and Software Solutions, PropertyGuru Group, believes the data shows this remains inconclusive. He goes on to further elaborate that there are various factors driving application rates, such as micro-geographical conditions, market sentiments, and mobility trends.
“For instance, in the December 2023 BTO exercise, the application rate for a 3-room unit at Alexandra Peaks, which falls under the PLH model, was 0.3 for first-timer families and 8.2 for second-timer families. In comparison, the application rate for its non-mature estate counterpart, a 3-room unit at Woodlands Beacon or Urban Rise @ Woodlands, was 0.9 and 9.1 for first-timer and second-timer families, respectively.
However, if we were to look at the application rates for Tanglin Halt Courtyard, the application rates for a 4-room unit for first-timer families are 3.4 and 73.8 for second-timer families, much higher than the application rates for Woodgrove Edge in Woodlands.”
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