Higher BTO demand expected after income ceiling raised, but supply can keep pace: Chee Hong Tat

SINGAPORE: More home buyers are expected to enter the Build-to-Order (BTO) market following the raising of public housing income ceilings, but there will be adequate supply to meet the higher demand, said Minister for National Development Chee Hong Tat.

The shift towards BTO flats, coupled with a growing supply of resale Housing and Development Board (HDB) flats, could also help keep resale prices stable, he added.

“When you raise the income threshold, indeed more people will be eligible. That's a good thing because then there will be more Singaporeans who can apply,” Mr Chee told CNA’s Singapore Tonight on Tuesday (Aug 25).

“But what it also means is that supply must be adequate in order to meet this higher demand. (We are) continuing this approach of building more, building faster, so that we are able to meet the housing aspirations of more Singaporeans.” 

The government is on track to offer at least 55,000 new BTO flats from 2025 to 2027, and has previously said it would exceed this number if demand remains strong.

“Looks like we likely would have to do that,” Mr Chee said.

RESALE PRICES SHOULD REMAIN STABLE

The higher income ceiling could also have a knock-on effect on the resale market. 

With more households eligible to apply for BTO flats, some demand is expected to shift away from the resale market. At the same time, resale supply is expected to increase as more flats reach the end of their minimum occupation period (MOP). 

“We hope that the combination of these two factors will help to keep resale prices stable,” Mr Chee said. 

He pointed to the stabilisation of resale flat prices as one reason the government last month removed the 15-month wait-out period for those who sell their private properties to buy an HDB resale flat. 

The higher housing income ceilings were among measures announced by Prime Minister Lawrence Wong at the National Day Rally on Sunday to keep public housing affordable and accessible to Singaporeans. 

The monthly household income ceiling for new HDB flats was raised from S$14,000 (US$11,000) to S$16,000, while the ceiling for executive condominiums (ECs) increased from S$16,000 to S$18,000. 

Mr Chee said the government adjusts the thresholds from time to time as incomes rise, with the aim of ensuring that about eight in 10 Singaporean households remain eligible for subsidised housing. 

Another measure will give first-time families an additional ballot chance for each Singaporean child aged 18 and below from February next year. This will apply to Standard, Plus and Prime BTO flats, as well as Sale of Balance Flats. 

Mr Chee said the move was intended to support young families and give parents and couples who want children greater assurance of securing a flat. 

SUPPORT FOR LARGE FAMILIES, SINGLES

During the National Day Rally, Mr Wong said he had asked Mr Chee to look at providing further housing support for larger families.

Mr Chee said the ministry is studying several ways to do so, including increasing the supply of larger flats, such as five-room flats, in more towns across Singapore.

“To help these large families, we will also be exploring what are some of the ways to ensure that we give them additional support to keep the prices of the larger flats more affordable,” he said.

Mr Chee also acknowledged concerns among singles who aspire to own homes, amid the additional priority being given to families with children.

“I want to assure our other groups of buyers – our singles and also our seniors – that the government will continue to build flats for you too,” he said, pointing to recent changes that have expanded housing options for singles.

Since 2024, singles have been able to apply for two-room Flexi BTO flats across Singapore, instead of being restricted to what were previously classified as non-mature estates.

Rules were further changed last year to allow singles to qualify for priority under the Family Care Scheme if they want to live with or near their parents for mutual care and support.

The government has also announced plans to increase the number of two-room Flexi flats by almost 50 per cent over the next three years, compared with the previous three-year period.

Looking ahead, the government is reviewing the minimum age of 35 for singles to buy BTO flats. 

BTO APPLICATION RATES DOWN SHARPLY

Mr Chee said the government in early 2025 caught up with all housing construction delays caused by the COVID-19 pandemic.

The increased supply of new flats has helped reduce waiting times and application rates among first-timer families, he said.

In 2020, there were almost seven first-timer family applicants for each 3-room or larger BTO flat. The application rate has since fallen to about 1.3.

“So, (the application rates) have come down significantly. This means higher chance of a successful ballot with shorter waiting time,” Mr Chee said.

“That's why we see more people now shifting to BTO markets, and the demand for resale flats has also then sort of stabilised.”

Mr Chee added that the government would continue to maintain a robust supply of new flats across Singapore, including in mature estates where people may want to live near their parents.

But finding land for housing will become increasingly challenging given Singapore's limited land area, he noted.

After available sites, including brownfield sites, are exhausted, the government may have to consider areas with greenery or heritage value, he added.

“The approach we want to take is to try and preserve as much of the greenery and heritage as we can after doing the impact assessment,” said Mr Chee.

“But we also want to make sure that we are able to develop so that we can meet the housing needs and aspirations of Singaporeans.”