PropertyBT: Should BTO applicants buy HDB Plus and Prime flats?

FOR many young Singaporeans, purchasing a build-to-order (BTO) home from the Housing and Development Board (HDB) marks the beginning of their homeownership journey. In the upcoming October BTO exercise, HDB will offer approximately 8,500 flats across 15 projects categorised under the new Standard, Plus, and Prime classifications. This new structure aims to provide diverse housing options while maintaining affordability and fairness among different income groups.

In this latest episode of PropertyBT, senior correspondent Leslie Yee talks to Dr Lee Nai Jia, head of real estate intelligence, digital and software solutions, PropertyGuru Group, as they discuss the implications of resale restrictions, and how to choose the right flat for your homeownership journey. 

What are the new BTO classifications?

The new classification system introduces three categories of flats:

1. Standard Flats: These are the traditional BTO options, offering affordability and flexibility.

2. Plus Flats: Located in desirable areas, often near MRT stations and amenities, Plus flats come with higher subsidies but also tighter restrictions on resale and rental.

3. Prime Flats: These units are situated in the most sought-after locations, typically closer to the city centre. Like Plus flats, they also have stringent resale and rental conditions.

While the attractive locations of Plus and Prime flats may entice buyers, potential applicants must be aware of the limitations that accompany these options.

Minimum Occupation Period (MOP)

Another critical factor to consider is the Minimum Occupation Period (MOP) of 10 years for Plus and Prime flats, compared to the 5-year MOP for standard BTO flats. This means that buyers must physically occupy their homes for a decade before being eligible to sell in the open market. While this may sound restrictive, it aligns with the goal of encouraging long-term residency in HDB flats, thereby fostering community stability.

The appeal of prime locations

Despite the restrictions, the appeal of living in prime locations remains strong. Many young homebuyers may find themselves willing to stay in their BTO flats for the long term, especially if they have children who need to progress through local schools. The allure of living close to amenities and public transport can outweigh the limitations imposed by the new system.

Should you choose a Standard, Plus, or Prime Flat?

For prospective buyers, the decision between Standard, Plus, and Prime flats hinges on individual priorities. If flexibility and potential for quicker resale are key concerns, a standard flat may be the better option. However, those willing to commit to a longer stay in prime locations may find the benefits of Plus and Prime flats appealing.

The new HDB BTO Standard, Plus, and Prime model represents a significant policy shift aimed at balancing affordability with the need for diverse housing options. While the restrictions on resale and rental may seem daunting, the long-term benefits of living in prime locations could make these flats worthwhile investments.

As you embark on your homeownership journey, it’s crucial to weigh the pros and cons of each classification carefully. Discuss your options with your partner, conduct thorough research, and understand your eligibility before applying.

More from Leslie:

A suggestion to let young homebuyers borrow more

Consider letting young Singaporeans borrow more to fund housing dreams

From a property perspective, many good reasons to marry young

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Send us your questions, thoughts, story ideas, and feedback to btpodcasts@sph.com.sg.

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Written and hosted by: Leslie Yee (lyee@sph.com.sg)

With Dr Lee Nai Jia, head of real estate intelligence, data and software solutions, PropertyGuru Group.

Edited by: Emily Liu & Claressa Monteiro

Produced by: Leslie Yee & Emily Liu

Engineered by: Joann Chai Pei Chieh

A podcast by BT Podcasts, The Business Times, SPH Media

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