National Day Rally 2023: 4 Changes To Singapore’s HDB System Every Singaporean Needs To Know

A tradition that started in the following year since Singapore’s independence, the National Day Rally (NDR) is an annual message delivered by the Prime Minister of Singapore to the entire nation that sets the tone on Singapore’s progress, key challenges, and the upcoming directions of Singapore’s socioeconomic policies.

In this year’s NDR, the key theme was a revamp of the HDB system. Here are some key highlights of the changes that we think every Singaporean needs to know.

1. Redefining BTO Classification: From Mature/Non-Mature To Standard/Plus/Prime

HDBs were given the mature/non-mature classification back in 1992. Since then, the classification has been used for various purposes, including how much BTOs cost and how much grants to be given to applicants. This system stuck with us for slightly over 30 years. But from 2H 2024 onwards, this system is undergoing a revamp.

Announced during the NDR 2023, new BTOs are going to be classified by the Standard/Plus/Prime model.

There are three key differences between Standard/Plus/Prime model:

• Location
• Subsidies
• Restrictions

	Location	Subsidies	Restrictions
Prime	In city or city fringe locations	Highest	Highest ·       10-year MOP ·       Cannot rent out whole flat even after MOP ·       Subsidy recovery upon resale
Plus	Near town centres or MRTs	High	High ·       10-year MOP ·       Subsidy recovery upon resale
Standard	Everything else that doesn’t fall within Prime or Plus	Normal	Standard ·       5-year MOP

 

Location

The first is location. As it stands today, Prime flats are those that are located in highly popular mature estates. To simplify it, you can think of Prime flats as those that are either in the city or city fringe areas like Kampung Bugis, Greater Southern Waterfront.

For Plus flats, they will likely be those that are located in the vicinity of town centres and MRT stations. While details on how close they are to town centres and MRT stations are not yet released, we think that it will likely be those that are within walking distance (~500m) from these amenities.

Any flat that doesn’t fall within the Prime or Plus flats will automatically be classified as Standard flats.

Subsidy & Restrictions

BTOs are currently priced based on the “market rate” of existing flats. Since Prime flats are either in city or city fringes, they will be the most expensive BTOs. To keep them affordable, HDB has to provide more subsidies to cover the cost of owning a Prime flat.

To avoid Prime flats from being “gamed”, very strict restrictions are placed on them.

For example, the Minimum Occupation Period (MOP) is double that of the Standard flats. To add on, there’s a further restriction on the rental eligibility of Prime flats. Even after the MOP, you can’t rent out the whole flat, only rooms. The subsidies that you received will be also be clawed back upon a resale of the flat. These are measures likely to discourage anyone from trying to game the system by either the rental route or flipping BTOs.

Similarly, for Plus flats, the MOP is set at ten years. The subsidies will also be clawed back if you decide to sell your BTO.

Standard flats will be the ones that are closest to what we have today in the current BTO system. It comes with a standard 5-year MOP. Any subsidy you receive will be yours to keep even if you sell the property.

2. More Choices For Singles To Choose From

The availability of BTOs and resale HDBs for singles has always been a big grievance for younger generation Singaporeans. This is especially so with the growing trend of late marriages and young Singaporeans staying single by choice.

BTO: 2-Room Flexi Across All 3 Categories (Standard, Plus, and Prime)

With the introduction of the Standard, Plus, and Prime BTOs, singles who are above age 35 will be able to apply for BTO flats across all three categories. This is a slight tweak to the current set of rules where singles can only apply for BTO in non-mature estates.

Resale: Any Flat Type (Except 3-Gen Flats) In Standard, Plus

For singles looking to settle down with a resale HDB, the option widens up even more for you. If you are eyeing a resale flat in the Standard or Plus category, you will be eligible for any size flats in Standard and Plus categories. The only exception is the 3-Gen flats, which are obviously excluded because they were meant for two nucleus families to stay together.

Resale: Only 2-Room Flats In Prime

If you want to enjoy affordable housing while still living in Prime areas, you do get that option with the newly announced NDR 2023 change. You will be able to qualify for the 2-room flats in the Prime category, which is currently named as Prime Location Housing (PLH).

Based on the current set of rules, singles are not eligible for 2-room flats under PLH. But with the new rule coming into effect in second half 2024, singles will be eligible to buy 2-room flats in the Prime category.

3. Existing HDB Estates To Become More Senior Friendly

One of the macro trends that impact Singapore’s society is our ageing population. In just three years’ time, Singapore will attain the status of “super-aged”. This means that, as a society, at least 21% of our population will hit 65 years old by 2026. Because of the increasingly ageing population in Singapore, HDBs have to undergo upgrades to make them more senior friendly.

One such upgrade will be the EASE 2.0, which stands for Enhancement for Active SEniors. Under the current program, fittings like ramps, grab bars, and slip-resistant flooring in toilets are installed. With the 2.0 program, there will be more features like foldable shower seats, widened toilet entrance so that wheelchair bound seniors can live more comfortably.

In the estate, you can also find more therapeutic gardens, fitness trails, and exercise machines that are designed to encourage seniors to keep active.

4. HDB To Build More Senior Friendly Community Care Apartments

While there will be more BTOs for young, single Singaporeans, the government is also ensuring that seniors are being taken care of. A new type of flat known as the Community Care Apartment (CCA) will become more commonplace in Singapore’s public housing system.

To date, there are two BTOs being developed: One in Harmony Village @ Bukit Batok and one in Queensway Canopy.

Each CCA flat comes with one bedroom, one living room, and one bathroom. It is a small living space that is suited for the elderly who are living together with their spouse or with another elderly. Every CCA block will be integrated with eateries, shopping mall, and healthcare facilities so that our seniors are well taken care of.

Every resident living in a CCA flat will also subscribe to the Basic Service Package (BSP). Under the BSP, the senior gets a community manager that helps to arrange for services like:

• Add-on care and support services
• Simple home fixes
• Access to care services and wellness and social events/activities

Balancing Your Housing Affordability With The Right Financial Planning

While the new BTO system is a welcome change, affordability remains a key concern among Singaporeans. This is especially so when housing prices continue to climb in one of the world’s most expensive cities to live in.

It is a reminder to us about the importance of having the right financial planning in place. Not just that, doing this early can help you to manage the cost of living with greater ease.