2019 is drawing to a close and looking back at the year, the HDB market has seemed fairly stable. The authorities have however made some significant changes throughout the year, and perhaps these, in particular, are worth taking a second look at.
1. Policy changes aid first-time HDB flat buyers
In September, key policy changes were made to help first-time HDB flat buyers secure their own unit. Instead of having only new Build-to-order (BTO) flats to choose from and having to wait 3 to 4 years for them to be built, the options now also extend to resale HDB flats.
Under the Enhanced Central Provident Fund Housing Grant (EHG), the income ceiling has been raised to $9,000 and buyers are not restricted to flat types or location. The income ceilings for HDB flats and executive condominiums (ECs) have also been raised to $14,000 and $16,000 respectively.
The latter is a hybrid between public and private housing, hence buyers are able to tap into governmental subsidies while enjoying the facilities of private condominiums from developer-led projects. In addition, after 10 years, these ECs will become private properties, often increasing in value.
Some property experts have already noticed that demand for resale HDB flats, in particular for older ageing flats, have stabilised following these policy changes.
2. More BTO flats to be launched in 2020
The authorities have already launched more flats with shorter waiting times this year in order to help young couples settle down and start their families sooner. These new flats will take 2 to 3 years to complete. In comparison, it previously took HDB applicants 3 to 4 years before they are able to secure the keys to their new units.
The second batch of these flats with shorter waiting times have been launched in Tengah in 2 projects. Both are next to an upcoming MRT station on the Jurong Region Line. The third launch of these flats with shorter waiting times will be in Choa Chu Kang. Approximately 500 units will be launched in May next year.
Up to 17,000 new BTO flats will be launched in 2020 in order to meet the demand for HDB units following September’s policy changes. This is about 2,400 more units than time year’s supply of 14,600 units.
3. Greener and improved HDB homes
HDB is working towards producing greener HDB homes. They are looking to build homes with integrated smart system and also reduce the need for air-conditioning. Working with German industrial giant Evonik, HDB hopes to cut indoor temperatures by 2-degree Celsius through the use of roof insulation that has already been adopted in Germany and Switzerland.
Under the Home Improvement Programme, upgrading works for 230,000 homes will be done over the next decade. The first batch of 55,000 HDB flats built between 1987 and 1997 will be done next year, and the works include fixing spalling concrete and replacing waste pipes as well as subsidised options such as bathroom upgrading.