BTO flats in prime areas may be further subsidised, but could face resale restrictions

14 Dec 2020

In response to concerns of the “lottery effect” of public housing, Minister Desmond Lee noted that a “whole range” of ideas could be applied in the new housing model, including introducing restrictions to resale conditions for flats in prime estates. 

With future Build-to-Order (BTO) flats within “new areas with very prime attributes” expected to be ”a lot more expensive” than current flats, National Development Minister Desmond Lee said a new housing model would be needed for public housing in such areas, reported Channel News Asia (CNA).

To maintain affordability, flats in such areas may be further subsidised, but may come with some restrictions on resale conditions, said Lee in a Facebook post.

Lee’s statement come amid concerns of the “lottery effect” of public housing, in which owners of subsidised flats within prime areas dispose of their homes for way higher prices compared to their initial purchase price.

Recommended article: BTO Prices Have Gone Up, But Have They Necessarily Become More Expensive?

Singapore has unveiled plans to develop thousands of flats within the Greater Southern Waterfront, which is set to become part of the Central Business District (CBD). 

In his National Day Rally speech last year, Prime Minister Lee Hsien Loong revealed that the development will be six times bigger than Marina Bay at 2,000 hectares. 

Lee, however, acknowledged that additional subsidies may lead to an “issue of fairness” once they result to higher capital gains for buyers. 

“In addition, we want to preserve the character of public housing in these estates, so that like other HDB estates in Singapore, they continue to remain inclusive over time,” said Lee as quoted by CNA. 

“Hence, we will have to consider measures for upcoming new flats in the prime areas that balance between these various objectives.”

To cater to different needs, Lee said a range of flat types will be offered in these estates, including two-room Flexi units and rental housing where possible.

Suggested read: HDB Flats in Singapore (2020): Are Resale Units Really More Expensive Than BTOs?

He noted that a “whole range” of ideas could be applied to future flats in the new housing model, and the National Development Ministry is exploring its options.

“We have received many ideas – for example, some have suggested introducing some restrictions on the resale conditions for future prime area projects,” said Lee. 

In November, Lee had said during an interview with Lianhe Zaobao that the Greater Southern Waterfront project was still “quite far down the line” and that other sites with very prime attributes may “be rolled out in the months and years ahead”.

He reiterated that a public feedback would be sought by the Housing and Development Board through engagement sessions in the next few months.

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