National Day Rally 2023: HDB Flats – What has changed?

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Prime Minister Lee has announced a change in classification of HDB flats at the 2023 National Day Rally held on 20 August. After PM Lee’s speech, this new form of categorisation has been widely discussed. The words ‘Prime’, ‘Plus’ and ‘Standard’ have been the main subject of discussion popping up amongst Singaporeans’ conversations this past week. So, what exactly are the changes to HDB?

What are the major changes?

With more than 80% of the population living in HDB flats, the introduction of these changes marks a notable change in the housing landscape in Singapore. To break it down simply, here is a summary of the major changes.

1. Change in classification of HDB flats

2. Longer Minimum Occupancy Period (MOP), income ceiling implementation for Plus and Prime model HDBs

3. Increased options for singles and seniors

Let’s dive into these major changes.

Change in classification of HDB flats

Up till now, HDB flats have been classified simply into the mature and non-mature housing models. This model will be scraped, and revised to the new classification – Prime, Plus, and Standard.

The new HDB BTO flats will be grouped according to their locational attributes.

1. Prime HDB Flats

Introduced in 2021, the Prime Location Public Housing model will not witness many changes.

– They are located in the choicest, most central locations in Singapore, such as the city centre (i.e., Bukit Merah, Whampoa, Rochor, etc.), and the Greater Southern Waterfront.

– Buyers will be given the most subsidies, but they also face the tightest restrictions. This would include a 10-year MOP, and subsidy recovery upon resale.

– Buyers are subjected to an income ceiling of S$14,000 for couples and $7,000 for singles.

2. Plus HDB Flats (*New!)

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This is the newest addition to the HDB model introduced by PM Lee last Sunday. Why is there a need for this category? Within each estate, locational attributes play a big role in the prices of HDBs. Some of such include – proximity to MRT stations, the town centre, popular schools, and amenities. Given its location, these flats would naturally command higher prices. Therefore, comes the need for a new category – Plus Flats. Some important things to note for Plus flats include: 

– Located in choicer locations in Singapore

– Close proximity to MRT stations

– Higher subsidies than standard flats, and subsidy recovery upon resale

– Longer MOP of at least 10 years, to strengthen owner-occupant intent

– Income ceiling of S$14,000 for families and singles

– Tighter resale conditions, to moderate demand, and keep flats as affordable as possible

– 30 month wait-out period for private property owners

3. Standard HDB Flats

A large majority of BTO flats will fall under this category. There have not been any changes to this category of HDBs. Flats that fall under this category will still have the current standard subsidies and restrictions. Unlike the MOP of 10 years for Prime and Plus flats, standard flats would still possess the 5-year MOP.

Changes to the categorisations will be reflected in Build-To-Order (BTO) projects starting in the second half of 2024.

Increased options for singles and seniors

In the National Day Rally, PM Lee mentioned that due to changing lifestyles and aspirations, Singapore is seeing an increased number of residents “choosing to be single”. However, first-timer singles are currently only able to buy 2-room BTO flats in non-mature estates, or resale flats in any estate, if they are above 35 years and above.

With the new HDB changes highlighted by PM Lee, singles will now be able to apply for 2-room BTO flats in all locations, across the 3 categories – Prime, Plus, and Standard. First-timer singles will also be allowed to buy either a Standard or Plus flat in the resale market, without restrictions on the size. Do note, however, that if you are planning to purchase a resale prime flat, you will still be restricted to only a 2-room unit.

In a bid to make HDB estates more senior-friendly, seniors will now be offered more options as well. Existing HDB homes and precincts will be upgraded. Some of the aforementioned upgrades include: Expanding the number of senior-friendly fittings under the EASE 2.0 programme, making estates more senior-friendly to promote active ageing, as well as the launch of more Community Care Apartments, which will include customizable care services for seniors.

Why the sudden HDB change in classification?

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HDB flat prices have been on the rise over the past years. In the first quarter of 2023, we have seen 21 4-room HDB flats sold for over S$1m, the highest in recent years. This can be a cause of concern, as analysts expect the trend of million-dollar HDB resale flats to continue growing. The new housing framework was, therefore, timely introduced with the hopes of fulfilling these objectives:

1. Keep home ownership affordable for everyone

2. Maintain a good social mix in all towns and regions

3. Keep the system fair for all

PM Lee also noted that the constant improvements in what was known as non-mature estates before have blurred the distinction between mature and non-mature estates. Now, these estates have excellent transport infrastructure and amenities, blurring the lines between mature and non-mature estates. HDB flats in non-mature estates such as Woodlands and Jurong East even at times, observe higher popularity than flats in mature estates. In this evolving housing landscape, we had to make a change.

How will the HDB changes be beneficial?

The introduction of longer MOPs and higher pricing for Prime and Plus flats ensures housing affordability, and most importantly, discourages property flipping. The subsidy recovery upon resale, which refers to returning a percentage of the resale price back to HDB upon sale of the property, also allows for fairness in the hot property market in Singapore. Singles will also benefit from the changes in the HDB model framework, with the relaxed restrictions in place.

Colin Lim
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