Mature and non-mature estates, it’s time to step aside.
As announced in the 2023 National Day Rally Speech, HDB will be moving away from the current classification of mature and non-mature estates, and into a new framework where flats will be classified as “Standard”, “Plus” or “Prime”. This change of framework will be implemented from 2H2024.
Before we elaborate on how the new framework would work, let’s first recap how HDB has been categorising under the mature/non-matures framework.
The End Of Mature & Non-Mature Estates
Since 1992, HDB began classifying HDB towns/estates as mature and non-mature estates, in tandem with changes made to the balloting process to accord priority to first-timers and applicants who were repeatedly unsuccessful in their flat applications.
The classification of estates as mature or non-mature was dependent on the availability of land for development.
For example, mature estates referred to estates where land for public housing development was limited yet demand was high. BTO flats in these estates tend to be more popular and are sold at a higher price to reflect their locational attributes and higher demand.
In contrast, non-mature estates referred to estates where there was more land available for public housing development. These are usually less central, with fewer amenities, and are therefore more affordably priced.
Till today, housing estates are classified as either mature or non-mature estates.
A glance at the above method of classification and a few thoughts may surface. The most obvious is whether it’s still accurate to be classifying many of the non-mature estates as “non-mature”. For instance, locations like Sengkang and Woodlands are highly sought after by home buyers. In fact, the only obvious “non-mature” estate on the list would be Tengah.
Secondly, it’s also highly debatable whether mature estates are still considered more popular compared to non-mature estates. The fact is that the distinction between mature estates and non-mature estates has blurred over the years as non-mature estates have become more built-up, with better amenities and transport infrastructure. For example, it’s no longer entirely clear that Pasir Ris (a mature estate) is going to be more popular than Punggol (a non-mature estate).
As such, the government has decided to move towards a new housing framework to classify and differentiate the different BTO projects. This will take effect from 2H2024.
HDB Standard Flats
Standard flats are like the regular BTO flats that most of us are already familiar with. They come with the standard subsidies and standard restrictions that are applied to all BTO flats. They include a 5-year minimum occupation period (MOP) with rental of the whole flat allowed after the MOP (subject to HDB’s approval). Most BTO flats built by HDB will be Standard flats.
Buyers of resale flats are not subject to any income ceiling and can purchase these HDB resale flats as long as they meet HDB’s ownership eligibility criteria.
HDB Plus Flats
Plus flats are a new category of flats and will be in choicer locations within each region across Singapore. This means we can expect to see such flats being launched in heartland estates such as Ang Mo Kio, Bishan, Clementi, Toa Payoh, Bedok, Queenstown, Bukit Merah and Kallang-Whampoa. The location of these flats would generally be superior (e.g. near MRT station, town centre) as compared to Standard flats within the same estate.
Since these flats are in a better location, they should logically cost more. However, HDB intends to keep these flats affordable so as to enable a wider range of Singaporeans to purchase them. However, if prices are simply lowered with no other conditions tied to them, demand for these flats would inevitably rise leading to what many have termed the “lottery effect”.
As such, Plus flats will have tighter conditions as compared to Standard flats. These include:
- 10-year MOP
- No whole flat rental after MOP
- Resale buyers of Plus flats must meet the prevailing BTO income ceiling. This is currently at $14,000. For singles who buy Plus flats on the resale market, the income ceiling is also set at $14,000 – same as families.
- Only Singaporeans will be able to buy Plus flats on the resale market. There will also be a 30-month wait-out period for private property owners.
- Subsidy recovery upon selling the flat (lower than Prime). This is applicable only to the first owner.
HDB Prime Flats
HDB Prime flats are not a new category and are basically the Prime Location Public Housing (PLH) flats that were introduced in 2022.
The key difference between Prime flats and Plus flats is that Prime flats will be in the most prime, central locations within Singapore. These include the Greater Southern Waterfront area, and towns in and around city centre such as Queenstown, Bukit Merah and Kallang-Whampoa. This also means that estates like Queenstown, Bukit Merah and Kallang-Whampoa will have a mix of Prime and Plus flats.
Without subsidies, Prime flats are going to cost more compared to Plus and Standard flats due to the superiority of their location. For the government to price them at an affordable cost, subsidies for such flats would be the highest. Thus, the Subsidy Recovery will also be higher for Prime flats as compared to Plus flats.
- 10-year MOP
- No whole flat rental after MOP
- Resale buyers of Prime flats must meet the prevailing BTO income ceiling. This is currently at $14,000. For singles who buy Prime flats on the resale market, the income ceiling is set at $7,000.
- Only Singaporeans will be able to buy Plus flats on the resale market. There will also be a 30-month wait-out period for private property owners.
- Higher subsidy recovery upon selling which is higher than Prime. This is applicable only to the first owner.
To recap the differences, you can refer to the infographics courtesy of the Ministry of National Development.
The introduction of Prime and Plus HDB flats do not affect existing HDB flats that have been launched. This means HDB projects like The Pinnacle@Duxton and SkyVille@Dawson, which likely would be Prime or Plus projects under the new classification, would not have the stricter restrictions applied to them. They would, like all other existing HDB flats, follow the sale criteria for Standard flats.
The new Standard, Plus and Prime framework will also be applied from 2H2024.
Read Also: National Day Rally 2023: 5 Announcements That Will Financially Impact Singaporeans
Top photo by Moo Kar Ming, DollarsAndSense
The post Standard, Plus & Prime Flats: Guide To Understanding The New Framework For HDB Flats appeared first on DollarsAndSense.sg.
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