MND slashes BTO flat supply for 2015 on back of sluggish local demand

Surplus stock is building up.

The Ministry of National Development had previously revealed that it is slashing the country’s BTO flat supply to just 16,900 in 2015 from 22,400 this year.

In a written response to a parliamentary question yesterday, the MND stated that BTO flat supply was slashed because keeping buffer stock is costly for the HDB.

“Buffer stock is not cost-free and we cannot be holding empty blocks of completed HDB flats to wait for a surge in demand. What we can do is to try to project and build ahead of demand as closely as it is possible.

"There are bound to be temporary shortfalls or surpluses, as our market is also subject to external events which are beyond our control. At this point, our focus is on ensuring a smooth transition from the ramp-up to a more sustainable phase, as the supply and demand for BTO flats achieve a better balance,” stated the MND.

Next year’s supply will include about 4,000 2-room flats to cater to demand from singles and low-income families. In addition, HDB will conduct Sale of Balance Flat (SBF) exercises to augment the BTO supply. The MND also stated that several thousand units of unsold balance flats should be available next year.

“As the number of new Singaporean family formations is estimated at about 15,000 each year, we are confident that the proposed supply should be adequate. Moreover, as resale prices continue to moderate, we can expect more buyers to return to the resale market rather than await the building of BTO flats,” the MND noted.