BTO flats still affordable, but good locations command higher prices: Desmond Lee

SINGAPORE - Build-To-Order (BTO) flats here are offered with different attributes, price points and grant amounts to cater to a diverse group of flat buyers – not just median-income households but also those in lower-income segments, said Minister for National Development Desmond Lee.

This means that even though BTO flats are highly subsidised, flats at attractive locations will have a higher price point, Mr Lee said at a Forward Singapore dialogue held at Singapore Management University on Monday (Oct 17).

The discussion primarily centred around public housing affordability and concern that the next generation could be priced out as flat prices continue to climb. Prices of resale flats climbed for the 27th consecutive month in September, with a record 45 units having changed hands for at least $1 million.

Reiterating that BTO flats continue to be affordable, Mr Lee cited two examples. In August, the Housing Board launched three-room BTO flats in Jurong East that cost between $194,000 and $245,000. He said a first-timer couple with a monthly household income of $3,000 – in the bottom quintile of households – can pay the monthly instalments fully from their Central Provident Fund, without any cash outlay.

Meanwhile, four-room BTO flats next to Woodlands South MRT station were priced between $303,000 and $363,000. This means a first-timer couple jointly earning $5,000 a month – around the 30th percentile of households here – can afford the monthly instalments using only their CPF.

As to why flats of similar sizes are priced so differently even in the same BTO exercise, such as the August launches in Ang Mo Kio and Choa Chu Kang, Mr Lee said this is down to location and distance to amenities.

“The Ang Mo Kio project is in the town centre, nearer to the city, and is close to MRT, bus interchange, market, hawker centre, polyclinic, library and shopping malls,” he said.

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“Our offering of BTO flats with different attributes, price points, locations and different levels of housing grants allow us to serve the needs and budgets of a diverse group of flat buyers.”

On the prices of resale flats, Mr Lee reiterated that the Government provides grants of up to $160,000 for first-timers. While million-dollar resale flats have received much attention, such deals make up only about 1 per cent of all resale transactions and often have unique attributes such as lofts and maisonettes, he said.

“Nevertheless, we recognise that there are concerns about rising resale prices, and we have, therefore, moved recently to moderate demand in the HDB resale market,” he added, alluding to cooling measures such as tighter housing loan limits and a 15-month wait for private home downgraders that took effect from Sept 30.

Mr Lee also addressed worries about the success rate of balloting for a BTO flat. Almost all first-timer households who applied for a BTO flat in non-mature estates succeeded within three tries, while 90 per cent were successful within two tries, he said.

He also reiterated that the Government is ramping up the supply of BTO flats and is on track to launch up to 100,000 new flats between 2021 and 2025, if needed.

The dialogue, organised by government feedback unit Reach, had about 70 participants. The majority were aged above 45 and half were professionals, managers, executives and technicians.

This article was first published in The Straits Times. Permission required for reproduction.