FOR IMMEDIATE RELEASE

05 March 2025, Singapore - Several housing- and real estate-related announcements were made in Parliament today during the Committee of Supply debate on the Ministry of National Development's Budget.

Public housing

Among them, the government has committed to maintaining a strong pipeline of public housing supply, with more than 50,000 build-to-order (BTO) flats to be launched from 2025 to 2027. It noted that a higher proportion of new flats over the next few years will be Shorter Waiting Time (SWT) flats with waiting time of less than 3 years. For a start, about 3,800 SWT flats - or about 20% of this year's BTO supply - will be offered.

Ismail Gafoor, CEO of PropNex, said, "The continued roll-out of an ample stock of new BTO flats will give more options to prospective buyers and could help to ease the strong demand for HDB flats in the resale market, and in turn, keep resale flat prices stable. In particular, the SWT flats and Sale of Balance Flats (SBF) - some of the SBF flats are already completed - may appeal to families who want to get their flat sooner, who would otherwise have to turn to the resale market for a pricier flat. Taken together, we expect the supply of new flats, the anticipated increase in number of flats exiting their 5-year minimum occupation period (MOP), alongside existing cooling measures could help to keep resale flat prices in check."

The MND indicated that the number of flats that will complete the 5-year MOP is set to increase from 8,000 this year, to 13,500 flats in 2026, and rise steadily to 19,500 flats in 2028. With more flats due to exit their respective MOP, this could boost the stock of HDB flats eligible for resale, and help to ease the resale flat supply tightness. Such flats do enjoy keen interest owing to their lengthier lease, and good condition. Based on transaction data, newer resale flats with a remaining lease of 94 years or more (at the point of resale) accounted for about 11% of the total resale volume over the period from January 2017 to February 2025.

The HDB will launch the first BTO project - comprising about 1,500 new units of 2-room Flexi to 4-room flats and public rental flats - in Mount Pleasant during the October 2025 BTO exercise. The first of six BTO projects in the area, it will be located within walking distance to the Mount Pleasant MRT station and is not far from the Toa Payoh Town Centre, as well as the upcoming Toa Payoh integrated development, where a range of amenities will be offered, including sports facilities, polyclinic, library, and a town park. Mount Pleasant will be progressively developed into a new housing area, which will yield around 5,000 new flats when completed, the HDB said.

Mr Gafoor added, "Given its location in the central region, proximity to the MRT station, future commercial offerings nearby, and prospects of scenic views on high-floor units, the upcoming BTO project in Mount Pleasant will likely be classified as either Prime or Plus flats. We expect the new HDB flats in Mount Pleasant will see healthy interest from applicants, as they will be the first-ever public housing to be launched for sale in an area that mainly features private landed housing. Furthermore, within the Novena Planning Area and indeed in the Core Central Region - where Mount Pleasant is - there is limited public housing stock, making these flats all the more attractive. Families with young children may also be particularly keen, in view of several schools nearby, including CHIJ Primary and Secondary (Toa Payoh) schools, Marymount Convent School, St. Joseph's Institution, Singapore Chinese Girl's School, and Catholic Junior College."

PropNex anticipates high application numbers from both first-timer and second-timer families as well as singles for the BTO flats in Mount Pleasant. They may include applicants who wish to live near their parents who are residing in Toa Payoh, or in private homes in the vicinity. Taking reference from the last BTO launch in Toa Payoh - for the lack of BTO launches in Mount Pleasant - the 385 new flats at Kim Keat Heights attracted more than 2,400 applicants (6.4 times application rate) when it was offered for sale in the May 2022 BTO exercise.

The government also announced enhancements to the Fresh Start Housing Scheme which will help more public rental households with children to purchase their own flat, as well as enhancements to the Silver Housing Bonus aimed at offering further support to seniors who right-size to a 3-room or smaller HDB flat to boost their retirement adequacy.

ABSD Regime for developers

Meanwhile, the government will revise the additional buyer's stamp duty (ABSD) regime for housing developers who undertake complex projects, including en bloc redevelopments (with at least 700 units upon completion, and 1.5 times the number of residential units of the existing development), those with complex technical or infrastructure requirements, projects under the Strategic Development Incentive Scheme, and those that seek to achieve higher productivity targets via adoption of new construction technologies or practices. The ABSD remission timeline will be extended by six months to a year (depending on how many categories met) for housing developers of such projects, and it is applicable for all residential sites acquired on or after 6 March 2025.

To encourage early adoption of CORENET X - a one-stop digital platform for regulatory submissions for building works - for smaller projects, the qualifying period for the ABSD remission timeline extensions for new projects with a GFA of less than 30,000 sq m will be extended for first submissions made until 31 Dec 2026.

"We think the extension in the ABSD timeline for complex developments, and large-scale projects that have a significant transformative effect on the estate is appropriate, and perhaps long overdue. Such extensions will give developers more flexibility and may help to mitigate development risks to some extent, as they have a bit more time to sell units, particularly for mega projects. In a way, this is probably a fairer treatment in our view. Imagine a project with 800 units having the same 5-year ABSD remission timeline as a boutique development with 80 units to build and sell all units.

"Developers will likely welcome the change, and we expect that it could give them a little more confidence when they bid for large residential sites, or evaluate en bloc opportunities. In particular, en bloc sales processes tend to be arduous and lengthy, with uncertainty around when a developer may be able to launch the project for sale. We think this extension, if applicable, will give developers of en bloc developments more wiggle room. This may also be good news for owners of older residential developments who are seeking collective sale. That said, we do not expect this announcement to spark a revival in the en bloc market - developers continue to be cautious given the high cost of redevelopment, ample oncoming private housing supply, and potential policy risk. Ultimately, all land acquisition moves must make business and financial sense to the developers," Mr Gafoor said.

This is the second revision to the ABSD regime for developers in as many years. In Budget 2024, it was announced that residential projects with at least 90% of units sold by the ABSD remission sale timeline (or at the 5-year mark) will be subject to a lower ABSD remission clawback rate.