COS 2022: Clarifications on BTO Flats and Resale Prices

MP Louis Chua

Mr Chua Kheng Wee Louis: Thank you, Chairman. I just have two clarifications.

The first is regarding the BTO cut that I have. It is really whether or not we could set aside the minimum target percentage of the flats. We have the shorter wait times. So, instead of basically the built-to-order (BTO) process, we really have one which is build-ahead-of-order, considering that we do have a very significant demand and supply in balancing the market today, with very high over-subscription rates for the BTO flats.

The second is in relation to resale subsidies by ensuring affordability. As it is, there are already a lot of public housing flats today in areas where only the better-off can afford them. I spoke about the 261 million-dollar flats. But if we look at the median resale prices of, say, a 5-room flat in places, such as Bukit Merah, Queenstown, Toa Payoh, these range from $800,000 to $900,000. So, what is it that the Ministry would be looking into to ensure that it is not only the better-off who can afford a flat in these places?

6.30 pm

Mr Desmond Lee: The Member asked if more shorter waiting time flats can be built. The answer is that we are doing everything we can to do so. The reason why flats have shorter waiting times and, in the case of the most recent launch – two in Yishun, if I am not wrong – it is two years plus to get the flat. That is because the land was available, we were able to carry out the very significant land preparation and infrastructure development to enable those two projects to be launched ahead of time, ahead of our BTO launch, so that when people actually select the flat, the time to them collecting the keys is much less.

But that requires us to not just do land preparation and that work is very significant – you have to clear encumbrances, you have to do land preparation, you may need to clear the land, you may need to provide the services, you need to provide the roads. That work takes time. Singapore is land-scarce. So, where does this land come from to meet all these needs, or growing needs? To which, the Workers’ Party would like to add more demand, which we will look at. 

But we will have to take land from greenfield sites. And the Workers’ Party has said, “Please keep as much greenery as possible”. But some of these sites, we will have to use. So, please support when the studies are out.

Some are greenfield sites. Some of them are brownfield sites, which means they have been cleared of their previous use and the land is ready to be developed. But often, brownfield sites are still being used – whether they are used for businesses and industry or used for nurseries or used for farming or used for retail or whatever, and we have to give the user of the land the time to be able to clear out and then we take over. And if there is a delay in that, that will affect our land preparation, that will affect our launch, that may cause delay to our housing plan.

So, to plan for a BTO programme requires many years of planning ahead of time. And, wherever possible, we will advance it in order to allow shorter waiting time flats to be launched.

In addition to that, as I have said in my speech earlier, we have both Sale of Balance Flats options as well as the Open Selection of Flats, where we put the balance units from all over the island and allow people to select. In fact, one is coming up, starting this month. I look forward to residents who need immediate housing to apply for those. 

As for affordability of resale flats, there are certain areas which are very popular, the flats’ resale prices are higher. But part of it is in the last year for so, because of COVID-19, because of concerns about construction delays, coupled with the ongoing socio-demographic trend of household formation and smaller households, resulted in greater demand for resale flats; particularly in some areas which are very popular.

In fact, for the last six out of seven years, resale prices have been trending downwards.

We provide generous subsidies for those buying resale flats, up to $180,000 [Please refer to “Committee of Supply – Head T (Ministry of National Development) for a clarification of the number, Official Report, 8 March 2022, Vol 95, Issue No 56, “Budget” section.], depending on income level, to help with the affordability of resale flats. But we also have put in place the Prime Location Public Housing flats to ensure that in some very prime locations, eventually when they become resold on the market and became resale flats themselves, we have enough mechanisms and levers to try to ensure that they remain affordable, not just at first launch but over time. 

8 March 2022
Ministry of National Development

https://sprs.parl.gov.sg/search/sprs3topic?reportid=budget-1881

%d bloggers like this: