The October 2023 Build-to-Order (BTO) sales exercise saw a remarkable surge in applications, with over 35,600 submissions for 8,573 flats, marking the highest demand since August 2022. The exercise introduced a new classification system for flats, attracting strong interest across its 15 projects and signaling a significant shift in Singapore's public housing landscape.  

A New Era for BTO Classifications  

This sales exercise was the first to adopt the new Standard, Plus, and Prime classification system, replacing the traditional mature and non-mature estate labels. The reclassification, based on proximity to city centers, transport connectivity, and amenities, aims to offer greater clarity while addressing concerns over affordability and fairness.  

Prime and Plus flats, offering better locations and additional subsidies, come with stricter resale restrictions, including a 10-year minimum occupation period and subsidy clawbacks of 6% to 9%. These measures are intended to curb the "lottery effect" associated with owning flats in prime areas.  

High Demand for Well-Located Projects  

The two Standard projects in Pasir Ris—Costa Riviera I and II—garnered the highest interest, with first-time application rates of 6.7 for five-room and 3Gen flats. Located near Pasir Ris MRT station and featuring relatively short waiting times of three years, these flats stood out among buyers.  

Similarly, the West BrickVille @ Bukit Batok project, near the future Tengah Park MRT station, drew strong interest, particularly for its four-room and five-room flats, with first-time application rates of 3.0. Its short waiting time of just two years further boosted its appeal.  

In contrast, the Taman Jurong Skyline project in Jurong West struggled to attract applicants despite its low launch prices.

Propertyforsale Managing Director, JT Chia, attributed the undersubscription to its less favorable location, next to the busy Ayer Rajah Expressway (AYE) which is a source of noise and air pollution.

"It is a double whammy when the nearest Lakeside MRT station is more than 25-minutes walk away," Mr Chia said.

Popularity of Prime and Plus Flats  

Prime and Plus projects in areas such as Ang Mo Kio, Bedok, Geylang, and Kallang/Whampoa were largely oversubscribed, reflecting strong buyer interest despite stricter resale conditions.  

Central Trio @ AMK emerged as the most sought-after project in this category, with an overall application rate of 7.9 times. The 422 units in this Plus project attracted 3,345 applicants.

There were 1,763 applications for its 267 four-room units, translating to an application rate of 4.1 among first-time families.  

Property analysts noted that buyers prioritized affordability and location over the resale flexibility of these flats.

We anticipated strong demand for this project, given the relative rarity of new flats in Ang Mo Kio. The last BTO project in this area, Central Weave @ AMK, was launched in August 2022 and saw an application rate of 14.1 times.

Buyers Shrug Off Subsidy Clawback

The subsidy clawbacks of 6% to 9% did not deter buyers from choosing the Plus and Prime BTO flats. Because they are expected to price in the clawback subsidy when they sell the flats after MOP.

For example, a 4-room BTO Plus flat at Central Trio @ AMK cost about $500,000. The owner could stand to profit about $250,000 if it was sold for $800,000 in the near future after the 6% subsidy clawback. 

Singles Drive Record Application Rates  

The October exercise also marked a milestone for singles, who were allowed to apply for two-room flexi flats in any location for the first time. In the past, singles could only apply for such flats in non-mature estates.

This policy change spurred significant demand, with first-time singles accounting for about 20% of applications.  

In Bukit Batok, more than 36 first-time singles competed for each of the 130 two-room flexi units. Similar trends were observed in Ang Mo Kio, Kallang/Whampoa, and Pasir Ris, where application rates for singles ranged from 26.3 to 29.5.  

It may take a few years to meet this pent-up demand among singles.

Implications for Singapore’s Housing Landscape  

The October BTO sales exercise underscores the importance of location and connectivity in driving demand. Projects near MRT stations or offering shorter waiting times were particularly popular, emphasizing the premium placed on convenience in a well-connected city like Singapore.  

The strong response to Plus and Prime flats, despite their tighter restrictions, suggests that buyers are willing to trade flexibility for strategic locations and affordability. With the relaxation of rules for singles and the introduction of new classifications, the housing market appears poised for further evolution to meet diverse needs.  

As demand for public housing continues to grow, these trends may guide future policies to ensure affordability, accessibility, and sustainability in Singapore’s public housing system.