HDB to increase yearly BTO supply by 35% over next two years
By Timothy Tay
/ EdgeProp Singapore |
Next year, new flats will be in areas such as Bukit Merah, Jurong West, Kallang Whampoa, Queenstown, Tengah, Toa Payoh, and Yishun. (Picture: Samuel Isaac Chua/The Edge Singapore)
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SINGAPORE (EDGEPROP) - The Housing and Development Board (HDB) will launch up to 23,000 new flats per year over the next two years. The pipeline supply of new flats will be located across mature and non-mature HDB towns.
Next year, new flats will be in areas such as Bukit Merah, Jurong West, Kallang Whampoa, Queenstown, Tengah, Toa Payoh, and Yishun.
This announcement comes after the government announced new property cooling measures on Dec 15, along with a promise to ramp up the supply of private and public housing. “Looking ahead, we are prepared to launch up to 100,000 flats in total from 2021 to 2025, if needed, subject to prevailing demand,” says HDB, in a press release on Dec 16.
HDB says that it has increased the supply of new flats over the past two years to need the housing needs of Singaporeans. It launched about 17,100 Build-To-Order (BTO) flats this year, up from the 14,600 new BTO flats it launched in 2019. (Find HDB flats for rent or sale with our Singapore HDB directory)
According to Mark Yip, CEO of Huttons Asia, an additional 23,000 new flats per year translates to a 35% increase in BTO yearly supply over the next two years and will offer buyers more choice besides the secondary market.
Wong Siew Ying, head of research and content at PropNex Realty, says that the 23,000 BTO supply planned for 2022 will be the highest annual public housing supply since about 25,000 new flats were launched in 2013.
“Given the strong demand for BTO flats, the move to ramp up supply will give Singaporeans more opportunities to secure a new flat, as well as ensure the HDB resale prices grow at a more sustainable pace,” says Wong.
However, she believes that homebuyers will still turn to the resale market due to generous housing grants for first-time homebuyers, a wider selection of units available in the open market, as well as the relatively quick turnaround time compared to waiting for BTO project completions.
Among the latest property cooling measures is a tightening of the Total Debt Servicing Ratio (TDSR) from 60% to 55%. Yip says that this is a pre-emptive move to encourage more financial prudence in the event of a sudden and unexpected increase in interest rates.
He adds: “On top of this, buyers of HDB flats taking a loan will be subject to a mortgage service ratio of 30%. This will ensure that households are not financially stretched/burdened should there be an increase in interest rates”.
Meanwhile, the reduction in the Loan-To-Value (LTV) ratio for HDB loans will have “little impact” , says Yip, since most buyers will opt for a bank loan as their prevailing interest rates are much lower compared to a HDB loan now.
Check out the latest listings near Bukit Merah, Jurong West, Kallang Whampoa, Queenstown, Tengah, Toa Payoh, Yishun
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