Tightened rules for non-selection of HDB BTO flats from August

The measures introduced by the government are aimed at making housing more affordable and accessible for Singaporeans and helping them to better manage the transition to a private property, says Gafoor. “These are all steps in the right direction and help to ensure that more Singaporeans can plan for and fulfil their aspiration of homeownership.”HDB has taken steps to reduce the number of people who decline to book a Build-to-Order (BTO) flat when invited. Starting from the August 2023 BTO launch, those who fail to book a flat upon selection will be redesignated second-timers in the computer ballot and have to wait a year to reapply.

This change is intended to reduce the number of non-selections and ensure a more efficient allocation of flats in the BTO exercise, ensuring that those with a genuine need are able to secure one. According to Huttons Asia, as much as 40% of BTO applicants fail to select a unit. This penalty is expected to reduce the number of applicants for the August 2023 BTO launch by 20%.

ERA Singapore Head of Research and Consultancy, Nicholas Mak, clarified the government’s objective, saying that the new rules are meant Tengah EC “to reduce the pool of first-time homebuyers, especially those who failed to select their BTO flats after multiple attempts in previous BTO exercises.”

PropNex Realty CEO Ismail Gafoor echoed these sentiments, commenting that the tightening of the rules is in aid of “helping Singaporeans own their first homes”. He further acknowledged that the government is making a more targeted effort to make housing more accessible to specific groups of homebuyers.

This includes giving greater priority to first-timers aged 40 and below, allowing them to get three ballot chances for a BTO flat. Factors such as non-availability of choice units, limited units left, and sudden changes in employment status can affect an individual’s ability to select their desired flat.

The strength of Singapore’s public housing policy lies in the number of housing options available to the public, from BTO and resale flats to grants and HDB loans. OrangeTee & Tie’s Senior Vice President of Research and Analytics, Christine Sun, posited that the penalty for non-selection of BTO flats may cause more buyers to turn to the resale market instead.

The government is also offering more ballot chances and higher proportions of BTO flats and SBFs for individuals in low-income groups and senior citizens to ensure that they too are better equipped to access housing. These measures are being met with a positive response as they are helping to fulfill the real estate aspirations of many Singaporeans.