SINGAPORE — The Government’s move to discontinue the Re-Offer of Balance Flats (ROF) exercise and allow more unwed parents to buy public housing flats will have minimal impact on the resale prices of public housing flats, said analysts.

That’s because of the relatively small number of unwed parents, as well as the unpopularity of unsold Housing and Development Board (HDB) units.

These policy changes were announced by National Development Minister Lawrence Wong during the debate on his ministry’s budget on Wednesday (March 4).

With the discontinuation of the ROF exercise, HDB flats that are not selected by buyers during the Sale of Balance Flats (SBF) exercises will be offered directly for open booking, which means the public can apply for them anytime.

Although the removal of the ROF exercise would enable prospective home buyers to purchase their flats faster, Ms Christine Sun, head of research and consultancy at property agency OrangeTee, said the Government’s intention is not to create another type of demand.

“It’s not as if because of this policy change, people will rush to buy,” she said.

And that’s because these units are likely not “choice units”, a point Mr Nicholas Mak, head of research and consultancy at real estate agency ERA, concurs with.

These are typically second-floor units, “or the orientation is not attractive, or it faces the afternoon sun or the multi-storey car park”, said Mr Mak.

The intention behind this policy move is to sell off Build-to-Order (BTO) units that have remained unsold in the past few years, he added.

“HDB flats’ lease is for 99 years. They probably do not want to keep it vacant for too long,” said Mr Mak.

Analysts applauded the move by the National Development Ministry to allow unwed parents aged 21 and above to buy a new two-room or three-room flat in non-mature estates, saying it would help those who have fallen through the cracks.

Previously, only those aged 35 and above could buy a resale flat as a single person.

Analysts believe that there are not many unwed parents in Singapore, hence this policy change would not have much of an impact on the HDB resale market.

“We have to see how many unwed parents from disadvantaged backgrounds previously had to turn to resale, but now they can find BTO flats they want. That might make a slight decrease in demand in the resale market. But I don’t think it’s highly significant,” said Mr Mak.

HIP AND VERS

Mr Wong also announced in Parliament that the Home Improvement Programme (HIP) will be extended to public housing flats built between 1987 and 1997, and gave more details about when the Voluntary Early Redevelopment Scheme (Vers) would be rolled out.

These announcements, analysts said, would also not move the needle much.

Mr Lee Sze Teck, director of research at property agency Huttons Asia, said there has not been a noticeable effect on the prices of flats that have undergone HIP, which allows older flats to undergo maintenance and repair works to enhance its safety and sanitation facilities.

The programme was first rolled out to flats built up to 1986.

For the next batch of flats undergoing HIP, Mr Mak said it might help to preserve their value, but not necessarily increase it.

Mr Wong also announced that Vers is expected to be rolled out sometime after 2030, giving a slightly clearer indication on its timeframe than when first announced by Prime Minister Lee Hsien Loong during his National Day Rally Speech in 2018.

Then, Mr Lee said the Vers, which would allow HDB flat owners to decide if they want the authorities to take back their apartments for redevelopment at around the 70-year mark of their lease, would be rolled out about 20 years later.

However, analysts said this update still lacks specific details, which is what everyone is on the lookout for.

“The effect of Vers rests entirely on the details of how it would lead to an en bloc sale, and also how the compensation to individual flat owners would be calculated,” Mr Mak said.

Mr Lee believes that the lack of details on Vers is causing some uncertainty among both buyers and sellers of HDB resale flats.

Citing the older flats in Marine Parade which would probably reach their 60-year mark in 10 years, Mr Lee asked: “What are these people going to do in the meantime?”