Speech by Minister Desmond Lee for the BCA-REDAS Built Environment and Real Estate Prospects Seminar

Jan 23, 2025

Mr Tan Swee Yiow, President, REDAS

Distinguished guests,

Ladies and gentlemen,

Warm welcome to the Built Environment and Real Estate Prospects Seminar 2025, which BCA and REDAS have been co-organising since 1990. Thank you for the partnership all these years.

From the get-go, let me wish everybody a Happy New Year. For those who celebrate Pongal, a Happy Pongal. For those celebrating Lunar New Year, a Happy New Year next week. We wish everyone prosperity this year and beyond.

This year, we celebrate a significant milestone as a nation - SG60.

2015 marked a century of independence and this year we will go into National Day, recognising that we’ve come 60 years since independence. As a Built Environment sector, we will take the opportunity to remember and honour the many men and women of the Built Environment sector who had planned, designed, built and maintained our city over the decades.

It is also an occasion for us to look to the future, as we keep building and improving Singapore into a more liveable and sustainable home.

I will cover three broad areas in my opening today.

I will start with the housing market,

Followed by the construction sector outlook,

And finally, I will give an update on our efforts to transform the Built Environment (BE) sector.

Housing Market Outlook

Let me start off with the housing outlook for 2025.

Over the last few years, we faced significant challenges in the housing market.

On the public housing front, the pandemic disrupted BTO construction, delaying projects and lengthening waiting times for home buyers.

Some home buyers became anxious and decided to join the BTO queue even earlier than they would have. This exacerbated our supply-demand imbalance, and BTO application rates spiked. Others turned to the resale market.

At the same time, changes in social norms and demographics saw more Singaporeans wanting their own living space, raising housing demand.

The strong, broad-based demand coupled with tightness in supply, among other reasons, contributed to the rise in HDB resale and private housing prices, as well as BTO application rates.

A few years on, we have made progress in addressing the demand-supply imbalance by working closely with BE sector stakeholders like yourselves, to ramp-up the supply of BTO flats.

We will exceed our earlier target to launch 100,000 BTO flats from 2021 to 2025.

Earlier this month, we completed the final two COVID-delayed HDB projects.

 As a result of these efforts, BTO application rates have moderated, with First-Timer application rates for 3-room and larger flats at 2.2, which is lower than application rates just before the pandemic struck.

Going forward, we will continue to roll out a steady pipeline of flats, because we know that there is demand and other demographic groups that we want to support so we will launch more than 50,000 BTO flats between 2025 and 2027.

On the private housing front, we have been progressively ramping up supply through the Government Land Sales (GLS) programmes over the last three years.

In 2024, we released land for around 11,000 private housing units under the GLS Confirmed List, the highest in a single year since 2013.

While HDB resale and private property prices have risen in the last few years, we do not expect housing prices to go up indefinitely.

We have a strong pipeline of residential units coming onstream in the coming years.
With the 19,600 flats planned for launch in 2025, this means we will be launching more than 130,000 new BTO flats from 2021 to 2027. 

Let me put that into context, we have built over 1.1 million HDB flats over the past 60 years, so the total supply between 2021 to 2027 will add roughly 10% to our total housing stock.

More private residential units will also be made available for sale following the ramp-up in GLS programmes over the past three years. 

We have also raised the overall private housing supply in the GLS Programme from about 8,100 units in 2H2024 to 8,500 units in 1H2025.

At the same time, the economic outlook is uncertain.

Domestic mortgage rates are expected to remain elevated.

The global economy might face disruptions arising from geopolitics and trade frictions.

Home buyers should therefore continue to exercise caution and be prudent when making property purchases because those who buy high – especially at prices above market valuation – may be hit hardest when the market cycle comes down.

Construction Demand Outlook

Let me now turn to construction demand.

In 2025, construction demand is expected to go up, reaching between $47 billion and $53 billion in nominal terms.

This is higher than 2024, where the demand is estimated to be $44.2 billion.

Apart from the significant roll out of public and private residential developments, the increase in demand for 2025 is driven by:

Upgrading projects, such as the Home Improvement Programme; and

Major new projects, such as Changi T5, the Marina Bay Sands expansion, the Thomson-East Coast Line Extension, Cross Island Line, infrastructure works for the Woodlands Checkpoint and the Tuas Port.

For the medium-term outlook from 2026 to 2029, the projected nominal construction demand is expected to be between $39 billion and $46 billion per year.

Besides the projects I mentioned earlier, major upcoming developments include new community facilities, waste management plants, and the rejuvenation of schools.

Pressing Ahead with BE Sector Industry Transformation

As we embark on the next phase of building Singapore, the exciting pipeline of development projects presents new opportunities for the BE sector.

To seize these opportunities, we will need to double down on our efforts to transform the way we plan, design and build.

Transformation Through Deeper Collaboration

Developers, consultants and builders will need to collaborate more closely.

CapitaLand, for example, has been actively championing the use of Integrated Digital Delivery (IDD) and Building Information Models (BIM) among their consultants and builders.

Not only has CapitaLand been engaging IDD consultants to guide their project teams to harness the benefits of Integrated Digital Delivery, they have also been driving the change management process to implement IDD-enabled workflows.

As a result, coordination amongst stakeholders has been smoother. And they have reaped time savings because abortive modelling work has been avoided.

Another mechanism that enables deeper collaboration between developers, consultants and builders is collaborative contracting.

Unlike conventional contracting which may inadvertently cause stakeholders to adopt adversarial postures against one another, collaborative contracting provides a framework that allocates risks and gains more equitably.

It aligns the incentives of parties, builds trust, and encourages everyone to work towards better project outcomes.

I am glad that more than 15 projects from across the public and private sectors will be piloting collaborative contracting, with 5 of them piloting the NEC4, a leading international contract form that supports collaborative contracting.

To support firms keen to adopt the NEC4 contract, BCA has developed additional clauses - known as ‘W” and “Z” clauses - that adapt the NEC4 contracts to suit local industry practices.

These clauses provide for alternative dispute resolution options, security deposit requirements and appropriate response timelines that align with local protocols and norms.

You can download these clauses as well as other resources from BCA’s website to kickstart your collaborative contracting journey.

BCA and our various Trade Associations & Chambers (TACs) have also organised training courses. If you are keen, please approach my BCA colleagues for more information.

CORENET X

Another key initiative that the industry and our agencies have been working on is CORENET X. 

CORENET X is a one-stop digital platform that makes the industry’s regulatory submissions for building works more integrated, seamless and convenient. 

By encouraging greater upfront coordination, CORENET X will also catalyse greater time savings and reduce downstream inefficiencies.

Thank you to all of you for being strong supporters throughout the CORENET X journey so far.

Since 2018, more than 1,000 firms have participated in workshops and engagement sessions to jointly design CORENET X and to prepare for its implementation.

The TACs, Professional Boards and training partners, have also organised many dialogues and courses for more than 1,800 industry practitioners.

The progress we have made together has been encouraging.

Since CORENET X was opened to voluntary submissions from June 2024, 28 projects involving 72 firms across various development types have stepped forward.

One of them is Wing Tai’s River Valley Green condominium project team.

The project team worked closely together to learn the new requirements for CORENET X, and made use of the new workflows to collaborate more closely with project stakeholders.

We have also taken in your feedback to refine our processes and platforms, and have addressed the concerns raised directly.

Some developers were concerned that the lack of familiarity with the new requirements may cause project delays.

So we introduced a six-month extension to Additional Buyer’s Stamp Duty (ABSD) remission and Project Completion Period (PCP) timelines to give practitioners more time to learn the new processes during the transition period.

We are closely monitoring the time taken for clearances.

For instance, the duration which private residential projects take to receive Construction Gateway clearance from land award has been comparable with the median duration taken under CORENET 2.0.

All submissions from such projects have thus far been processed within 20 working days and approvals were issued within 2 iterations.

Some consultants asked for revised payment milestones, given the greater emphasis on upfront planning and design.

To address this, we have updated the payment milestones in the Public Sector Standard Consultancy Agreement. On their part, industry associations, such as REDAS, SIA and IES, have worked together to adjust their respective standard conditions of contract.

Some of our smaller firms were concerned about the cost of BIM software.

Hence, we expanded the scope of the Productivity Solutions Grant (PSG) to co-fund up to 50% of the qualifying costs of BIM software and CORENET X training.

We know that significant changes need to be made to many of our existing workflows in order for our sector to benefit from CORENET X.

This includes having to coordinate more of our plans upstream.

The industry needs more time to adjust internal processes and familiarise yourselves with the new requirements.

Smaller consultancy firms may also not have had sufficient projects to try out the new processes during the voluntary submissions phase.

In view of this, we will take a more phased approach in implementing CORENET X regulatory submissions, as follows.

From 1 October 2025, CORENET X submissions will be mandatory for all new projects with GFA of at least 30,000 square metres.

From 1 October 2026, all new projects, regardless of project size, will be required to make regulatory submissions via CORENET X.

From 1 October 2027, all ongoing projects will need to be onboarded onto CORENET X.

Throughout this phased rollout, regulatory agencies will continue to accept submissions through CORENET X for all projects, including those below the mandatory thresholds.

One of the key lessons we have learnt is that no amount of workshops and training courses can beat trying out CORENET X with live projects, in helping companies get ready – be it in terms of reviewing and ironing out internal workflows, strengthening collaboration amongst project teams or understanding the new CORENET X requirements better.

I encourage all of you to give CORENET X a go now, even if you don’t meet the mandatory thresholds, instead of waiting until the requirements become mandatory for you.

Because CORENET X is such a major transformation of change, we fully expect that there will be teething challenges when we roll it out, but we are fully committed to making our regulatory processes more efficient.

BCA and URA will be issuing an industry circular to provide you with more details.

We will also share more on measures to further support BE industry transformation efforts at the MND COS 2025.

Conclusion

Let me conclude.

The Government remains firmly committed to meeting Singaporeans’ housing needs and aspirations.

We are also committed to partnering the BE sector to transform the way we plan, design and build in Singapore.

I would like to express my appreciation to REDAS for co-organising this seminar with BCA, and for being a steadfast partner of the BE sector’s transformation.

This is the 36^th edition of the seminar, which is a milestone that highlights the longstanding contributions of REDAS to the sector.

I look forward to continued partnership with REDAS and all industry partners gathered here today, as we write the next chapter of the Singapore story.

Thank you.