Since 2011, HDB has delinked the prices of BTO flats from the resale market to help stabilise them. By increasing the Government subsidy, new flats have remained affordable to first-timer households. It has also ensured that BTO flat prices do not follow the same extent of resale price increases.
Growth in HDB Flat Prices vs Resale Price Index
BTO prices have increased at a slower rate than resale flat prices. While the Resale Price Index rose 37% from 2009 to 2014, BTO flat prices (without grants) in non-mature estates increased at a more moderate rate of 15%.
Furthermore, BTO flats are priced substantially lower than comparable resale flats in the vicinity. In addition, eligible first-timers will receive up to $80,000 in grants (Additional CPF Housing Grant and/or Special CPF Housing Grant).
The BTO flats will therefore be even more affordable for first-timers if we take into account housing grants, where the flat prices after grants have only grown by 6%.
This is an example of how the prices of 4-room flats in non-mature estates, our most common flat type, have grown from 2009 to 2014 in comparison with resale flat prices.