HDB launches four Prime projects in July BTO exercise; subsidy clawback hits high of 12%

SINGAPORE: The Housing and Development Board (HDB) on Wednesday (Jul 23) launched four Prime projects for sale, with subsidy clawback levels at the highest to date. 

The Clementi Emerald project, which is close to Clementi MRT station, will have a subsidy clawback rate of 12 per cent.

The other three Prime projects - Toa Payoh Ascent, as well as Alexandra Peaks and Alexandra Vista in the Bukit Merah area - come with a subsidy clawback rate of 11 per cent.

Explaining the higher subsidy recovery rates, HDB said it will increase the additional subsidies for the Prime flats at these locations to keep the flats affordable for more Singaporeans.

"They are commensurate with the extent of the additional subsidies provided for the respective projects," HDB said in a media release.

The new classification for Build-to-Order (BTO) flats - Standard, Plus or Prime - was introduced in the October 2024 sales launch. 

Prime flats are located in the choicest locations. As they would eventually command higher market values, they will be priced with additional subsidies to keep them affordable. They also come with tighter sale conditions.

PropNex CEO Kelvin Fong noted that before the July sales launch, the subsidy recovery rate for Prime flats under the new classification framework was 9 per cent. Under the previous Prime Location Public Housing model, the subsidy recovery rate ranged from 6 per cent to 9 per cent, he added. 

"The higher subsidy clawback rate is unlikely to deter flat applicants as these projects are in attractive locations," said Mr Fong. 

Mr Lee Sze Teck, senior director of data analytics at Huttons Asia, said the higher clawback rates are "likely more of a function of the additional subsidies than distance to the city centre". He pointed out that Clementi Emerald, which has the highest clawback subsidy, is furthest from the city centre among the four Prime projects.

Mr Lee added that the subsidy clawback for Alexandra Peaks launched in December 2023 was 8 per cent, but this has risen to 11 per cent for the latest exercise, likely due to higher HDB resale prices. 

This could drive some buyers to look for earlier-launched BTO projects under the Sale of Balance (SBF) exercise, he added.

"If resale flat prices continue to rise, HDB may need to give more subsidies for Prime flats in future BTO projects. The question is how high can the clawback subsidy go," said Mr Lee. 

HDB said that all new flats are priced with significant market discounts to ensure affordability.

On top of the market discounts, Prime flats - which command higher market values - get additional subsidies to ensure affordability and accessibility.

"Hence, the selling prices for these new flats are substantially lower than the transacted prices of comparable resale flats," said HDB. "Correspondingly, Prime flats come with additional restrictions, including subsidy recovery upon first resale."

OVER 10,000 FLATS LAUNCHED ACROSS 8 PROJECTS

The four Prime projects were among eight BTO projects put up for sale on Wednesday.

A total of 10,209 flats were launched for sale, comprising 5,547 BTO flats and 4,662 SBF flats. Units range from two-room Flexi to 3Gen flats.

Seven out of 10 BTO flats up for sale have waiting times of four years or lower, including 1,396 units with less than three years' waiting time at Clementi Emerald and Bangkit Breeze.

Sembawang Beacon, the first BTO project in the new Sembawang North neighbourhood, will comprise 775 units and has a wait time of three years.

HDB noted that flat buyers looking to move into their homes sooner can consider applying in the SBF exercise, where 1,733 - or more than a third of SBF flats - have been completed.

The four standard projects on offer are in Bukit Panjang, Sembawang, Tampines and Woodlands.

Eligible first-timer families stand to benefit from the enhanced CPF housing grant of up to S$120,000 (US$94,000). With the grant, homebuyers can purchase a three-room standard flat starting from S$162,000 or a four-room standard flat starting from S$248,000, said the Housing Board.

CHANGES FROM JULY

HDB also outlined some changes that will take effect from the current sales exercise, including improvements to the Family Care Scheme, which will provide priority access to parents and their children, when applying for a new flat to live with or near each other.

First announced in March, the allocation quota for three-room and larger BTO flats for second-timer families has also been raised by 5 percentage points.

The deferred income assessment rules have been expanded, such that only one party in a couple needs to be a recent or current full-time student or National Serviceman. Previously, both parties needed to meet the requirement.

The Fresh Start Housing Grant, provided to support second-timer public rental families to buy a new standard two-room Flexi or standard three-room flat on a shorter lease, was also enhanced to S$75,000 from S$50,000.

SBF FLATS

The 4,662 SBF flats offered in the current exercise are more than the 3,000 units HDB previously committed to, it noted.

Together with the 5,590 such flats offered in February, the total SBF supply this year has exceeded 10,200 flats. This is the largest annual supply of SBF flats since 2016, HDB said.

Like BTO flats, SBF flats are subsidised and priced lower than comparable resale flats.

Eligible first-timer singles can apply for any of the two-room flexi SBF flats across the island in this sales exercise, HDB said.

Flat applications can be made online via the HDB Flat Portal from Wednesday to Jul 30.