For couples looking into taking the next step in their relationship or singles who are newly 35, getting a Build-to-Order (BTO) flat can be exciting. BTO is one of the ways you can get a new flat in Singapore, and is heavily subsidised with a range of grants and loans available. A Housing & Development Board (HDB) BTO launch happens quarterly, and typically offers a variety of flat types across a few estates.
Eager to get your own BTO flat? Here are seven things 2023 BTO hopefuls must know!
1. BTO Application Eligibility
Can you actually BTO? The first step to getting an HDB BTO flat is to check your eligibility. This includes the basics such as your citizenship, age, income ceiling, and property ownership. Those who are unsure if they are eligible for a BTO application can check out HDB’s comprehensive list of eligibility on their website.
Due to the long wait for a BTO flat, which can range from five to seven years, many young couples opt to apply for BTO before being officially married. For those who are planning to do that, do keep in mind that you must register your marriage within three months of receiving the keys to your BTO flat, and a photocopy of your marriage certificate will be required by HDB as proof of marriage.
2. BTO Balloting System
Luck plays a part when it comes to getting a good queue number in the BTO balloting system. When applications open, hopeful buyers can apply for their desired flat size in the development project they want on the HDB website. Once the application closes, a computerised balloting system will assign queue numbers to those who had applied at random.
The queue number will determine your turn at choosing a flat. The smaller your assigned queue number means you have more choices to pick from. If your queue number exceeds the number of available flats in the project, the odds of you getting a flat is low unless
someone ahead of you decided to pass up their turn.
For example, if there are 300 4-room flats up for grabs in the Bukit Batok estate, you will most likely get a chance to pick a flat if your number is lower than 300. The smaller queue numbers will also get a wider selection as they get to pick earlier. If your number is 310, then you will only get a chance if 10 people in front of you that give up their chances.
As the queue number is assigned randomly, there is no way to get a better queue number. However, HDB has priority schemes to increase your chances of getting a queue number. If you are a first-timer, you get two times the ballot chances as compared to second-timers. If you had been unsuccessful for two or more tries in a non-mature estate, you will also be getting one additional chance per subsequent application.
3. Ethnic Integration Policy
According to HDB, the Ethnic Integration Policy (EIP) “is put in place to preserve Singapore’s multi-cultural identity and promote racial integration and harmony. It ensures that there is a balanced mix of the various ethnic communities in HDB towns. The EIP limits are set at block and neighbourhood levels based on the ethnic make-up of Singapore.”
The permissible proportion of flats for Chinese, Malays, Indians and other minority groups is up to 84%. 22%, 12% in the neighbourhood, and 87%, 25%, and 15% in each block respectively.
Now, even if your queue number is 280 out of the total supply of 300, there is a chance that you might not get to pick a flat because of the EIP. For example, if you are a Chinese person vying for a BTO flat out of a total supply of 300. Your queue number is 280 and there are already 252 other Chinese families who picked their flats before you. Your application will be voided as it would already hit the maximum quota under EIP. When this happens, you will not face any penalties for rejecting a BTO flat.
4. General BTO Launches and Locations
BTO takes place four times a year, typically in February, May, August, and November. Usually, four to six different estates across Singapore will be available during a launch, and HDB will announce the locations a couple of months before.
For example, the November 2022 BTO launch had flats from five estates, Queenstown, Bukit Batok, Kallang/Whampoa, Tengah, and Yishun available. Approximately 9,540 units were up for sale during the November 2022 launch, which is a huge increase compared to August 2022’s when only 4,993 units were available.
5. Prime Location Public Housing
New to the BTO scheme is the Prime Location Public Housing (PLH) model announced in November 2021.
HDB flats in prime locations have become a key discussion in recent years with how high their resale value became after the required five-year Minimum Occupation Period (MOP). As the government wants to ensure public housing is primarily for the owners’ own occupation and not for investments, along with the possibility of gentrification where only the rich people can buy homes in certain areas in Singapore, the PLH model was developed.
According to HDB, PLH “ensures that new public housing built in prime, central locations like the city centre and the Greater Southern Waterfront will remain affordable and accessible for Singaporeans.” PLH flats are subjected to subsidy clawbacks, 10-year MOP,
Previously in the August 2022 BTO launch, Alexandra View and Havelock Hillside are reserved as PLH BTO flats. These flats are located in highly desirable city fringe locations but the demand for these flats is lower than the usual HDB BTO apartments.
Affordability is one of the biggest concerns for new BTO hopefuls. Minister for National Development Desmond Lee had said, “Our offering of BTO flats with different attributes, price points, locations and different levels of housing grants allow us to serve the needs and budgets of a diverse group of flat buyers.”
For new couples, it is important to look at your combined salaries to make sure you are not servicing your montage payment with more than 30% of your monthly income. Do not bite more than you can chew when it comes to getting your first HDB BTO flat.
Applying for grants and choosing the right loans are also important steps that every BTO hopeful should look into before even applying for a flat.
HDB has a list of grants that are available for couples, singles, and seniors that you can look into. You can also use HDB’s affordability calculator to work out your housing budget and understand the terms and conditions for the different loan options. If you are unsure if an HDB or a private loan works best for you, you can also check out Planner Bee’s HDB vs Bank Loan piece for more details.
7. February 2023 HDB BTO Launch
In February 2023, HDB will offer approximately 2,900 to 3,900 units of BTO flats in towns and estates such as Kallang/Whampoa (2-room Flexi/ 3-/ 4-room), Queenstown (3-/ 4-room), and Tengah (2-room Flexi/ 3-/ 4-/ 5-room).
This number is subject to review as more project details will be firmed up closer to the launch date. There have been instances where HDB changed some of its launch sites or the number of units available. Some speculate that Queenstown and Kallang/Whampoa might go under the PLH model, leaving only Tengah under the regular BTO scheme. However, as only three estates are announced, there is a high chance that one to two more estates will join the February 2023 BTO launch.
If you are looking to BTO in 2023, it is important to take time and weigh your financial options before applying for a flat as it is a huge purchase with heavy commitments. Talk with your other half or friends with experience to know more about the process and may the odds be in your favour!