Channel NewsAsia
Updated: 12/30/2013 17:22 | By Channel NewsAsia

HDB to cut supply of new 3-room, larger flats to 18,600 in 2014

HDB to cut supply of new 3-room, larger flats to 18,600 in 2014


HDB to cut supply of new 3-room, larger flats to 18,600 in 2014

SINGAPORE: The Housing and Development Board (HDB) will reduce the supply of three-room and bigger flats by 18 per cent in 2014.

At the same time, it will almost double the number of two-room Build-To-Order (BTO) flats in non-mature estates.

The move marks a transition from HDB's three-year ramped-up building programme to what it calls a more "sustainable phase".

A block of BTO flats in Sembawang is the last to be completed for 2013, marking a total of 13,600 flats completed this year.

In all, there will be 24,300 flats on offer in 2014, three per cent less than this year's 25,100 units.

For new three-room and larger flats, there will be 18,600 units on offer, compared to 22,600 this year.

And to meet the demand from singles, the supply of two-room flats in non-mature estates will go up to 5,000 units, from 2,600 this year.

HDB said the move is timely as the supply and demand from families have achieved a better balance.

Nine in 10 families buy their first home from the HDB.

While the demand for HDB resale flats has shrunk, some property analysts think with fewer larger flats being built in the year ahead, some second-time home buyers may look to the HDB resale market instead.

Associate Professor Sing Tien Foo from the Department of Real Estate at the National University of Singapore said: "By reducing the supply without adjusting the quota, the probability of second-timers getting the flat will be smaller.

“Given that resale market prices have come down, the demand has been weakened by the change in policy by restricting new PRs (permanent residents) from applying for resale flat, as well as the drop in COV (cash-over-valuation). The resale flat will be more attractive for these second-timer families who are thinking of upgrading or thinking of moving to a bigger flat."

But analysts added the supply of two-room flats will spell good news for singles.

Lim Yong Hock, key executive officer at PropNex, said: "The singles scheme only came about this year in July. The subscription rates in some locations are actually above 10 times oversubscribed. So I believe this increase in the numbers will help to reduce the demand in the next one year."

And for seniors who are looking to right-size their flats, about 700 studio apartments will be on offer in 2014.  - CNA/gn

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