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Singapore’s new 10-year Minimum Occupation Period for HDB Plus flats balances homeownership and flexibility, says Desmond Lee

Desmond Lee, Minister for National Development highlights the 10-year Minimum Occupation Period (MOP) for new HDB Plus flats, emphasizing its role in balancing owner occupation commitment and homeowner flexibility.

Additionally, BTO projects’ future categorization focuses on locational attributes, not estate maturity.

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SINGAPORE: The 10-year Minimum Occupation Period (MOP) for new Housing Board (HDB) Plus flats aims to strike a delicate balance between bolstering the commitment to owner occupation and offering homeowners the flexibility to move for genuine reasons, said Minister for National Development Desmond Lee.

“We think that a MOP of 10 years seeks to strike a balance between strengthening the intent for owner occupation on the one hand, and giving home owners the flexibility of moving home for genuine reasons.”

In his address to Parliament on Monday (18 Sept), Minister Lee emphasized that the introduction of a 10-year MOP for HDB Plus flats represents a key component of their broader housing policy, aligning with the overarching goal of making homeownership accessible while maintaining social and economic stability.

Prime and Plus flats to have an extended 10-year MOP

The Minimum Occupation Period is a critical requirement for HDB flats, governing the period during which homeowners are restricted from selling or renting out their properties.

Historically, most HDB flats have had a 5-year MOP.

In Oct 2021, HDB introduced a new Prime Location Public Housing scheme (PLH) with an unprecedented MOP of 10 years, double the duration of regular Build-to-Order (BTO) flats.

The PLH model aims to keep future HDB flats in prime, central locations affordable and inclusive.

Starting in the latter half of 2024, Build-to-Order (BTO) projects will no longer be categorized based on whether they are located in mature or non-mature estates. Instead, they will be offered in three distinct models: Standard, Plus, or Prime.

Strickter regulations for Plus and Prime flats

Under this new housing framework, Standard flats represent public housing units spread throughout Singapore, featuring HDB’s standard subsidies and restrictions, including a MOP of five years.

Plus flats, on the other hand, occupy more desirable locations within a region and come with increased subsidies and stricter restrictions compared to Standard flats.

Prime flats are situated in the most coveted and central areas of Singapore and boast the highest subsidies and tightest restrictions.

Both Plus and Prime flats impose a 10-year MOP and an income ceiling at the time of resale.

“This new framework reflects the government’s commitment to achieve affordable home ownership, a good social mix and a fair system,” said Mr Lee.

Additionally, initial owners will face a clawback of the extra subsidies provided by the government, and they are prohibited from renting out their entire flat at any time.

Minister Lee emphasized that these measures are designed to ensure these flats are primarily used for owner occupation and not for speculative investments or rental income.

In response to questions raised by four Members of Parliament regarding the reclassification of HDB flats, particularly the categorization of BTO flats in choice locations under the Prime and Plus categories with stricter resale conditions, Minister Lee explained that the Ministry of National Development (MND) has been actively engaging with citizens and considering various suggestions.

Minister rejects rigid price caps idea, prefers additional subsidies to ensure fairness in housing market

A suggestion by Jurong MP Xie Yao Quan proposed a rigid price cap for Prime and Plus flats, but Minister Lee deemed this approach can be “distortionary” as prices may then not fully reflect the attributes of the flats.

“Instead, we will provide additional subsidies on top of these significant market discounts already provided for standard flats.”

Furthermore, the MND provides progressive grants to assist eligible first-time homebuyers, providing extra support to those in need.

When addressing inquiries about how the new framework promotes social diversity in HDB estates, Minister Lee emphasized that Prime and Plus projects will offer a diverse range of flat types to cater to various budgets and needs of Singaporeans.

To ensure inclusivity in neighbourhoods, the MND will continue to construct rental flats within integrated blocks wherever possible, including future Prime and Plus projects.

Minister Lee cited the example of River Peaks I, the inaugural Prime Location Public Housing project launched in November 2021.

“Some have asked if this new framework might cause our society to stratify further. In fact, on the contrary, this new framework seeks to achieve quite the opposite.”

“Without the new framework, flats in choice locations will likely become more expensive and out of reach for many Singaporeans over time,” said Mr Lee.

Minister Lee also highlighted that first-time homebuyers can benefit from the Enhanced CPF Housing Grant, a means-tested grant that provides up to $80,000 in grants for families and $40,000 for singles.

Leader of the Opposition seeks clarification on fiscal impact of New HDB BTO flat classification system

Notably, Pritam Singh, Leader of the Opposition also filed a question to ask the Minister what is the anticipated fiscal impact arising from additional taxpayer subsidies extended to Prime and Plus HDB flats under the new HDB BTO flat classification system.

In response, Mr Lee said the total fiscal impact is anticipated to be higher than if we keep to the status quo.

“The actual anticipated fiscal impact will depend on a number of factors, including market conditions at each launch, housing demand, the locational attributes of the sites and more.”

He said in deciding which model to launch new flats under, the government take into account various factors such as their specific locational attributes, affordability for buyers and the need to provide a range of different options for Singaporeans.

“We will continue to set aside the vast majority of our new flat supply for first time our families.”

Enhanced ballot chances and priority schemes for first-time families

According to Minister Lee, Under the new framework across all BTO projects, first timer families will receive 2 ballot chances.

And 1st timer, parents and married couples, or what we call the “FTPMC”, will receive 3 ballot chances and additional priority under the Family and Parenthood Priority Scheme.

More details on the specific prioritization and quotas for different groups will be announced when ready, said Mr Lee.

Single to purchase new two-room flexi BTO Flats

In response to the housing needs of singles and the elderly, Minister Lee announced the introduction of new housing options, including the availability of two-room flexi BTO flats for singles in standard, Plus, or prime projects starting in the latter half of 2024.

To meet the increasing demand, the Housing and Development Board (HDB) will launch up to 14,000 two-room flexi flats over the next three years, representing a substantial 30% increase compared to the preceding three years.

Despite delays attributed to COVID-19, the government is committed to reducing the median waiting time from 4 to 4.5 years to three to four years by the following year

“Our priority now is to build enough flats over the next few years to address this demand before we decide whether to make any further changes.”

Minister Lee also highlighted ongoing efforts to engage with singles regarding their housing preferences, including innovative housing typologies like co-living and intergenerational housing, which are currently under active consideration.

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Anyway, sotong DL still very quiet how a new BTO block can be completely tiled and painted in RED. CCS gonna to tell us “human error”, hor? No Blaming Culture seems out of fashion for the moment, hor.

MND/HDB/DL can’t even regulate the current 5year MOP for new HDB flats, still want to talk about 10-years??? Just go to HDB’s own InfoWeb – see how many resales every month with leases which are more than 95 years (99 – 5 = 94 right?.)

Introducing any kind of price caps will affect their state property rentals . In this rent economy , much of the indirect taxes come in the form of rental generated by property and infrastructure This is why they don’t do it

As long as mass importing new citizens and PRs of over 50k per year are not stopped, then whatever policies are useless as the artificially created high demands will forever create one problem after another.

Before this mass importing, SG don’t have such issues and HDB flat prices, be it new or resale were more moderate and affordable then

Attempting to “brand and categorise” public housing, … beyond it’s most elementary of purposes and priorities !!!

Only carefully nurtured and curated SillyPoreans would buy into crappy cynical categorisation like, … standard, prime and plus bs !!!

All credit to the crafty government though, for creating this charade for public housing, … being their “golden goose” of all goosing gooses !!!

The flat buyers deserve what they voted. 86% voted against Change.

Flawed policies . Patching one hole then patch another. Maybe this will create new holes. 🤣

How does restrictions on who can buy HDBs and what they can do with what the ruling government constantly touts as their own “property” increase the supply of HDB flats?

More nonsense only makes people want to delay forming families, delay having children, steepening the demographic decline.

Looks like DL has tried to bring about changes. From 5 years to 10 for the MOP, will decrease the nos of people who are speculating in Public Housing. I think that Public Housing must be only for occupation so even the ten years timeline must be removed. If you still need to give subsidies, Public Housing remains unaffordable. How about new citizens? They should only be allowed to buy Public Housing after ten years.

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