Traditionally, single citizens had no restrictions on the location and type of resale flats they could purchase, but were limited to non-mature residential areas when buying new BTO flats. This policy was previously a reasonable regulatory measure to promote the development of emerging residential areas and balance population distribution. However, with the growing demands of the single demographic, particularly middle-aged, divorced, or widowed individuals, the housing needs of this group have become more diverse and urgent.
For many single citizens over the age of 35, purchasing a two-room BTO flat is not just a housing need but a lifestyle choice. For instance, the launch of the Tanjong Tree Residences project in Hougang this February, which offered 38 two-room units, saw a subscription rate of 16.3 times, highlighting the intense market response. To better address this demand, the Housing Development Board (HDB) of Singapore announced that up to 14,000 two-room units will be provided in the next three years (2024 to 2026), an increase of about 30% compared to the previous three years.
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This increase in supply is a direct response to changes in market demand. Analysts note that the rising demand in the resale flat market has led to soaring prices, forcing many singles who initially hoped to buy resale flats to turn to the BTO market instead. The policy adjustment allows single homebuyers to not be confined to non-mature areas, enabling them to choose from a broader range of locations that suit their needs. This not only enhances their satisfaction with living conditions but also helps alleviate population pressure in specific areas.
From October this year, Singapore will also implement a new housing classification framework, dividing flats into Standard, Choice, and Prime categories. Prime location and Choice units are expected to be extremely popular among single homebuyers, but the government and relevant departments need to be mindful of balancing the needs of different age groups, particularly in safeguarding the housing needs of the elderly.
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The new policy also takes into consideration the special needs of the elderly. According to the HDB, each project must reserve at least 40% of two-room units, or at least 100 units, for purchase by seniors aged 55 and above. These units can have lease terms ranging from 15 to 45 years to meet diverse needs. This not only addresses the housing issues of the elderly but also adds more liquidity to the market.
Experts suggest that this policy adjustment is an adaptation to market dynamics aimed at addressing the housing issues of singles and the elderly. Additionally, by encouraging the elderly to downsize, more large residences can be released into the resale market to meet the needs of families and singles requiring more space, thereby reducing the excessive reliance on two-room BTO units.
