Despite higher building costs, two-room flats under HDB's latest Build-to-Order (BTO) exercise are priced from $10,000, their lowest level since 2011 when the Special CPF Housing Grant (SHG) was introduced, media reports said.
The stunningly low price tag includes $60,000 in government grants, consisting of the $20,000 SHG and the Additional CPF Housing Grant (AHG) of $40,000. For buyers applying without government grants, the flats are priced from $70,000.
While only one flat at EastLace @ Canberra and EastCrown @ Canberra in Sembawang have a price of $10,000, others can be bought for only a few hundred dollars more.
But based on overall prices, the record holder for the cheapest flat is a two-roomer at Rivervale Arc that was sold for $68,000 in June 2010. Housing grants back then were also less as the SHG wasn't available.
In addition, the flats' biggest drawback is their smaller floor areas, as they only come in two sizes: either 36sq m or 45 sq m. In comparison, two-room flats tend to be larger than 40sq m, said ERA's Key Executive Officer Eugene Lim.
Nonetheless, their total price is lower and this shows the government is committed in making HDB flats more affordable for indigent families, he added.
In recent years, the housing board has been offering cheaper but smaller flats despite higher construction costs. For instance, the BTO launch in January 2014 saw a two-roomer at Woodlands Glen going for $13,000 with grants and $73,000 without grants.
"The smaller the flat is, the greater the subsidy the government seems to give in the pricing," said Mohamed Ismail, CEO of PropNex Realty. The decoupling of prices for new flats from resale prices in 2011 also contributed to this trend, he added.
Image: Artist's impression of EastCrown @ Canberra. (Source: HDB)