The quota for second timer families purchasing three-room or larger Build-To-Order (BTO) flats has been increased by 5 percentage points, according to Huttons Asia. This adjustment is expected to enhance the chances for second timer families in BTO exercises, potentially attracting more applicants from this group and diverting some demand away from the resale market for three-room and four-room flats.
Whilst three-room and four-room flats are widely available across most BTO projects, five-room flats are limited to non-mature estates. Consequently, buyers seeking executive flats or centrally located five-room flats will still need to turn to the resale market. This shift could alleviate some pressure in the resale market in 2025, which is currently experiencing its lowest supply of Minimum Occupation Period (MOP) flats in a decade.
Lee Sze Teck, Senior Director of Data Analytics at Huttons Asia, noted, “It may slow the pace of price increase for three-room and four-room flats but not for the five-room and larger flats.” This suggests that whilst the quota increase may stabilise prices for smaller units, the demand for larger flats in central locations may continue to drive prices upward.
Overall, the quota increase is seen as a strategic move to balance the demand between BTO and resale markets, potentially easing the upward pressure on resale flat prices in the coming years.
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