Under the new framework, HDB flats will be categorised into Standard HDB flats, Preferred HDB flats and Prime HDB flats on the basis of location. The new categorisation will affect all buyers of new HDB flats.

Reasons for the change in the way HDB flats are categorised:

Since 1992, HDB has categorised the country into mature and non-mature HDB areas based on land availability.

Mature HDB areas are usually more centrally located, easily accessible and have more amenities, hence more popular and more expensive.

Non-mature HDB areas are further away from the city centre and are less desirable in terms of location and accessibility, but are more affordable.

The current 15 mature HDB areas include Ang Mo Kio, Toa Payoh and Queenstown, while the 12 non-mature HDB areas cover Jurong East, Woodlands and Punggol.

With the reduction of large tracts of undeveloped land available for new towns and HDB districts, and as the boundaries between mature and non-mature towns begin to blur, the current framework is no longer applicable.

A new framework is therefore needed, one that must fulfil three main objectives:

First, home ownership must be affordable for all income groups;

Two, it must maintain a good social mix in every municipality and region;

Three, it must ensure that this system is fair to all.

New HDB Flat Delineation Model:

From the second half of 2024, the Singapore government will divide pre-purchased HDB flats into Standard Lot HDB flats, Preferred Lot HDB flats and Prime Lot HDB flats. The better the location, the higher the buyer's allowance, but the stricter the resale restrictions.

The new HDB categorisation will not affect existing HDB projects. In other words, existing HDB flats and pre-purchased HDB flats will not be re-categorised.

The new framework classifies pre-purchased HDB projects into three categories based on lot characteristics.

The first category is Standard Lot HDB flats, which are distributed island-wide and account for the bulk of new HDB flat supply. It has the same allowances and resale restrictions as the current HDB flats.

The second category is the new Preferred Lots HDB flats, which are located in higher-quality locations in various districts, such as near MRT stations or town centres. Compared to Standard HDB flats, Preferred HDB flats have more allowances, making them more affordable to more families. However, it has stricter resale restrictions, such as a minimum residency period of up to 10 years and allowance recoupment, as well as an income ceiling for resale buyers.

The third category, HDB flats in prime locations to be launched in November 2021, is located in the country's best locations and enjoys the highest allowances, but also has the most stringent resale restrictions.

Simply put, the better the location of the HDB flat, the more allowances eligible buyers will enjoy, but the corresponding conditions of sale will be stricter. This can moderate the prices of well-located HDB flats so that more families can afford to buy them.

In the future, most HDB flats will remain standard-lot projects. Existing restrictions on pre-purchase HDB flats that are familiar to the public, such as the five-year minimum residency requirement and the no-income ceiling for resale HDB buyers, are the "standard restrictions" for purchasing pre-purchase HDB flats. These restrictions will apply to Standard Lot HDB flats.

Standard lot HDB flats:

Under the new HDB categorisation framework, standard-lot HDB flats are distributed island-wide and account for the majority of new HDB flat supply. Buyers will receive the same allowances and face the same resale restrictions as they currently do for pre-purchased HDB flats.

Preferred Lot HDB Flats:

HDB flats in preferred locations are new HDB flats that are available in more desirable locations in the districts, such as near MRT stations and town centres.

Preferred lot HDB flats will receive an additional government subsidy that is greater than that of standard lot HDB flats, but less than that of prime lot HDB flats.

To be fair, the subsidy is recovered at the time of the first resale of a Preferred Lot HDB flat, but the recovery rate is generally lower than that of a Prime Lot HDB flat.

To ensure that these HDB flats are owner-occupied and to discourage those who wish to sell their flats for quick profit or rent them out for long-term gain, Preferred Lot HDB flats, similar to Prime Lot HDB flats, have a 10-year minimum residency period, and the owner is not allowed to rent out the entire flat at any time.

In order to maintain affordable prices, the Preferred Lot HDB flats are subject to an income ceiling of $14,000 for future resale, regardless of whether the buyer is a family or a single person. To be fair, these HDB flats are also subject to stricter restrictions, such as not being able to rent out the entire flat.

Like the Prime Resale HDB flats, the Preferred Resale HDB flats are restricted to Singaporeans only, and private homeowners have to wait for 30 months after the sale of their homes before they can buy these resale HDB flats.

HDB flats in prime locations:

HDB flats in prime locations, launched in November 2021, are the best located HDB flats and buyers of these flats are entitled to the most allowances, but these flats also come with the most restrictions.

Adjustments to the single home buying policy:

More and more Singaporeans are choosing to be single and also want to own their own homes and have more housing options.

Currently, singles who are above 35 years of age and want to buy a new HDB flat can only apply for 2-roomed flexible flats in non-matured areas, they cannot buy new flexible HDB flats in matured areas and they cannot buy HDB flats in prime locations.

Divorced or widowed parents with children aged 18 or below will be able to apply for new 3-room HDB flats in non-matured areas.

With the implementation of the new framework, singles will be able to purchase 2-room flexible flats in all pre-purchased HDB projects, including Standard Lot HDB flats, Preferred Lot HDB flats and Prime Lot HDB flats, subject to a $7,000 income ceiling. HDB will announce the details soon.

The income ceiling for singles purchasing resale HDB flats on preferred and prime lots is to regulate the resale price of these two types of HDB flats. To ensure that singles can afford the larger, prime-lot resale HDB flats, the authorities have chosen to set a higher income ceiling of $14,000 for singles buying these types of HDB flats.

The new HDB flats in prime locations will not be available until the second half of next year at the earliest, and if you include the three-and-a-half to five-year construction period and the 10-year minimum residency period, this batch of HDB flats is expected to have to wait for at least 15 years before they can be put on the resale market and start to have an effect on the property market. The authorities said they will continue to monitor the impact of the new measures and review them as necessary.

Allocation Measures:

Couples with children under the age of 18 or aged 40 and below will be given priority for allocation of flats reserved for the Family and Child Care Priority Scheme (FCPA) when they first apply for a standard lot of four-bedroom or smaller group housing units in all districts across the island in future.

A maximum of 40 per cent of pre-purchased HDB flats and a maximum of 60 per cent of surplus HDB flats are reserved for the Family and Childcare Priority Scheme (FPPS).

Currently, first-time buyers (parents and couples) are only given priority under the FPPS if they are applying for a 4-room or smaller flat in a non-mature town.

Currently, first-time buyers (parents and couples) applying for new HDB flats are given three chances to win in the ballot. When the new HDB categorisation framework is implemented from the second half of 2024, they will also enjoy this priority if they apply for Standard, Preferred or Prime HDB flats.

Other first-time buyers will continue to have two chances to win. Other groups of buyers, including second-time buyers, will have only one chance to win.