The Singapore government has ramped up the construction of new build-to-order (BTO) flats at the past decade, and even as a lot of those younger HDB flats reach the end of the mandatory minimum occupation period (MOP), more flat owners are also promoting them as soon as they can.
Increase in number of young flats sold after MOP reached
Last year, the amount of HDB flats aged 10 years or younger were marketed upon reaching their MOP mark increased a significant 33.4 percent. 4,578 such flats were offered in 2019, compared to this 3,432 at the preceding year. This may also be a result of the fact that the more HDB flats reached their MOP mark in the past several years.
New HDB flats have a minimum occupation period (MOP) of five years where the buyers are not allowed to offer them on the resale market. This age is calculated from the time that the owners get their keys to get the components and excludes any period the owners are not residing in the device (for example if they are working overseas and have applied to have the whole flat rented out).
The maximum number of newer flats sold have been in younger townships such as Punggol and Sengkang.
While following the principles of their minimum occupation period, one may question the motivations behind the rapid sales of HDB flats and when their goal for providing housing to people who want them will be fulfilled. Are more HDB flat buyers looking at them just for investment purposes; and can it be incorrect to see these as a stepping stone to the private real estate market? Are executive condos (ECs) then filling the gap between public and private home?
As family incomes grow and family sizes increase or families go to be nearer their older parents or children’s schools, some buyers may see fit to upgrade to private possessions or larger HDB units inside a 5-year window. Even though this may increase competition within the resale HDB market and price-growth may be restricted within the upcoming few years, it might enhance activity within both HDB resale and private land markets at precisely the same moment.