Nearly 10,000 flats launched in November BTO exercise
THE Housing and Development Board (HDB) launched 9,655 build-to-order (BTO) flats for sale on Wednesday (Nov 23) – its largest such offering in a single launch to date.
The flats are spread across 10 projects in both mature and non-mature estates in Kallang Whampoa, Queenstown, Bukit Batok, Tengah and Yishun. About 60 per cent of the new units – or 5,861 flats – are located in non-mature estates. This figure also makes up nearly half the number of BTO flats offered in non-mature estates for the whole of 2022.
Three projects – Ghim Moh Natura, Ulu Pandan Banks and Kallang Horizon – are offered under the Prime Location Public Housing (PLH) model, which applies to flats in prime, central locations. These projects also mark HDB’s largest PLH offering to date with 2,798 units.
A total of 1,071 units were offered under the Sale of Balance Flats exercise, bringing the total number of new flats available for purchase in the November exercise to 10,726.
The launch includes five-room flats and Community Care Apartments. HDB said on Wednesday that all four-room flats in non-mature estates are priced below S$400,000 after subsidies for this exercise, or “considerably lower than the transacted prices of comparable resale flats”.
According to HDB, eligible first-time applicants can receive an Enhanced Central Provident Fund Housing Grant of up to S$80,000. Applicants who qualify for the maximum amount can purchase a three-room or four-room flat in Yishun from S$100,000 or S$188,000 respectively, after the subsidy.
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The Tengah projects, named Garden Waterfront I and II, have the shortest waiting time for this launch at about 3.3 years. 11 projects with larger numbers of units and floors, challenging site conditions or more complex designs may take longer to complete.
The median waiting time for the November projects is about 4.5 years.
PropNex chief executive Ismail Gafoor predicted that these flats will see a subscription rate of 4 to 5 times, with the Kallang Horizon project likely to be the most popular PLH launch due to its strategic location and relatively small number of units.
However, ERA Realty Network research head Nicholas Mak believed that Ghim Moh Natura in Queenstown is likely to see the highest demand among the PLH launches, especially among working professionals. He pointed out that it is close to several amenities and business hubs, including Jurong East – Singapore’s planned second central business district.
The placement of BTO projects under the PLH model may soon become the norm, said Mohan Sandrasegeran, senior analyst at One Global Group. He added that the concept may be applied to estates like Queenstown and Bukit Merah which – like Kallang Whampoa and Queenstown – are situated close to MRT stations and city centres.
Among the BTO launches in non-mature estates, PropNex’s Gafoor and ERA’s Mak said that the Tengah projects are likely to see the most applicants. Although the amenities there are still being developed, the projects’ short waiting time is a draw.
HDB has also set aside “the vast majority” of flats in non-mature estates for first-time applicants, who are given additional chances to ballot.
The ramped-up supply of BTO flats does more than leave first-time applicants spoilt for choice. ERA’s Mak said that the November launch could draw over 9,000 households from the HDB resale market, which will partially deflate the “bloated demand” for resale flats.
Mak said that HDB plans to meet the “robust housing demand” with plans to launch another 8,200 to 9,200 BTO flats in February and May 2023. “The (recent property) cooling measures and the strong supply of flats will flatten the upward trajectory of the HDB resale price trend,” he added.
Christine Sun, senior vice-president of research at OrangeTee, said that the cooling measures may see more people buying flats in non-mature estates or units on lower floors. Loan-to-value limits have also been tightened, impacting buyers’ abilities to purchase flats in mature estates or on higher floors – which are more expensive.
However, she added that the November sales exercise is unlikely to see a “major impact” from the cooling measures, since BTO flats remain “the most affordable housing option in the market”. Sun also highlighted that no five-room flats were offered in this launch, setting a ‘cap’ on prices even within mature estates.
Lee Sze Teck, senior director of research at Huttons Asia, said that an ongoing government review of estate maturity classification may also result in non-mature estates being shifted into the mature category.
These include Bukit Batok, Jurong East and Hougang, where the flats are older than 25 years on average and the amenities are already well-developed. Should they be reclassified, “demand may be diverted to them and push up the prices of homes”.
“We may see a new HDB town classification emerging and applied to towns like Tengah and Paya Lebar,” added Lee.
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