Standard vs. Plus vs. Prime: How do the new flat classifications differ from one another

The government will implement the new flat classification in 2H24.

Real estate experts believe the new flat classifications in Singapore – Standard, Plus, and Prime –- will “better reflect the value of public housing in attractive locations.”

Currently, flats are classified by their location as “mature” and “non-mature.”

“This reclassification of flats puts the focus on the specific location attributes of the BTO project and their desirability and value, rather than the maturity of each town,” PropNex CEO, Ismail Gafoor, said.

Standard vs. Plus vs Prime

Under the new classification, flats will have tiered subsidies and varying restrictions. They also have varying attributes.

Standard flats will have standard subsidies and a five-year minimum occupation period (MOP).

Plus flats, the newest concept amongst the three classifications, are located in more attractive locations or those near transport nodes and town centres such as Bayshore and Mount Pleasant.

Plus flats also have a longer MOP of 10 years and together restrictions.

According to Lam Chern Woon, head of Research and Consulting at EDMUND TIE, the 10-year MOP for Plus flats is a clear message from the government that "affordable choice flats are not out of reach, but one would have to reciprocate the privilege with a strong occupation commitment and keep in check expectations of climbing the private property ladder.”

“For those who are turned away by a 10-yr MOP requirement, the alternative is to pay for existing flats in prime locations with 5-yr MOP, albeit at higher prices and for shorter tenure. In short, there are now more options to suit a wide spectrum of demographics, whereas previously prime flats were accessible only to high-income earners (in the resale market) or to lucky lottery winners (in the BTO market),” Lam said.

Another restriction for the newly-introduced classification is that buyers of resale Plus flats must have an income of at least $14,000, whether families or singles. Only Singaporeans can also purchase a resale Plus flat. 

Data from EDMUND TIE showed that eight in 10 Singaporean households earn $14,000 or less a month.

EDMUND TIE said the ceiling imposed on Plus flats will help many “ senior singles realise their wish to age-in-place in familiar surroundings.”
“The key distinction here is that singles with high earning capability would now be able to compete with other households for larger resale Plus flats. While this demographic of singles could quite easily afford private housing, some of them, especially the elderly singles, might consider public housing to enjoy the interaction and care of a close-knit community, which is likely more prevalent in public housing,” Lam said.

Meanwhile, PropNex said there will also be a 30-month wait-out period for private property owners.

Lam said this restriction “harmonises the eligibility vis-a-vis that to purchase BTO flats, ensuring that demand is not channelled to the resale market for lack of a level admission criteria between BTO and resale markets.”

“Currently, seniors aged 55 years old and above who own or used to own private property are exempted from the wait-out period if they were to move to a 4-room or smaller resale flat, and perhaps this exemption can be extended even to the purchase of smaller resale Plus or Prime flats to facilitate the free up of retirement capital for seniors in their golden years,” Lam said.
 
Besides resale restrictions, PropNex said Plus flat owners will also not be allowed to rent out their whole flat.

Plus flats have similar restrictions as Prime flats or Prime Location Public Housing (PLH), according to Huttons.
  
“There are no strict criteria on what qualifies as a Plus flat. The Government has briefly mentioned proximity to transport infrastructure and amenities. They had highlighted Mount Pleasant and Bedok South. Other possible locations in Huttons’ view could be the old Turf Club in Bukit Timah and Tanjong Rhu,” Huttons’ Senior Director, Data Analytics, Lee Sze Teck, said.
 
Generally, Lee said the Plus flats “allow the government to capture the nuances of location which tend to drive demand for a flat.”

“By offering more subsidies, they can keep the flats affordable and inclusive. With the restrictions in place, it will reduce the lottery effect and ensure fairness,” Lee added.

Gafoor, for his part, believes the new classifications will lead to “more flat applicants coming in for the four upcoming build-to-order (BTO) exercises before the new framework kicks in from 2H 2024, especially for BTO projects that are in good locations and are not under the Prime Location Public Housing (PLH) scheme.|”
 
 “They may perceive that such locations could be parked under the Plus category in future BTO launches and would rather apply now to avoid being subjected to restrictions later on. That said, there could be applicants who plan to live in their flat over the long term and they may wait it out given the higher subsidies for Plus flats,” Gafoor said.

“However, all prospective applicants should also be mindful that the HDB will be tightening its non-selection rules from the September 2023 BTO exercise, and they will be penalised if they do not select a flat when they are invited to do so,” he added.