After three years of ramped-up Build-To-Order launches, the supply of new 3-room and larger Housing Board flats will be cut by 18 per cent next year to about 18,600 units, down from 22,600 in 2013.
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Transitioning to a More Sustainable BTO Flat Supply
Next year, HDB will reduce the supply of new 3-room and larger flats by 18% from 22,600 units in 2013 to about 18,600. This is timely as the supply and demand for BTO flats by families has achieved a better balance.
On the other hand, HDB will increase the number of 2-room BTO flats in non-mature estates from 2,600 units in 2013 to 5,000 units. HDB will also offer 700 Studio Apartments (SAs) to meet the needs of seniors wanting to right-size.
In total, HDB will offer 24,300 flats in 2014. (This is 3% less than the 25,100 units launched in 2013.)
Over the last 3 years, HDB has ramped up its building programme to 26,000 new HDB flats on average per year. This coupled with a series of cooling measures has largely stabilized the public housing market. As a result, the backlog of first-timer applicants has been cleared, and BTO application rates by families have fallen. Data on the BTO application rates show that:
the average BTO application rate has dropped from 5.3 times in 2010 to 3.0 times in 2013; the average first-timer application rate has eased to 1.7 times in 2013; the average second-timer application rate has fallen to 7.1 times in 2013.
Presently, 9 in 10 families are buying their first homes directly from HDB. Correspondingly, the demand for HDB resale flats has shrunk, and Cash-Over-Valuations have come down drastically.
The 2014 BTO flat supply plan will allow HDB to start transiting from the ramped-up building programme to a more sustainable phase. Priority will continue to be given to housing families, with at least 70% of the flats in each non-mature estate project set aside for them (See Chart). The planned supply of 18,600 3-room and larger BTO flats exceeds the estimated 15,000 new Singaporean family formations for the year.
To meet the demand from singles, HDB will increase the number of 2-room BTO flats in non-mature estates from 2,600 units in 2013 to 5,000 units in 2014. Any remaining 2-room flats from the supply set aside for families will be allocated to singles. For example, in the July 2013 BTO exercise, 34% and 51% of the 2-room flats offered in Sengkang and Yishun respectively were booked by singles. These proportions are higher than the quota of 30%.
For seniors, HDB will continue to provide a steady stream of SAs, to facilitate those who wish to right-size their homes and acquire such units. About 700 SAs are planned for 2014.
HDB will continue to monitor the housing needs of Singaporeans closely and respond appropriately to demand and supply conditions.