• HDB launched the first BTO flats under the Prime Location Public Housing scheme 
• The two projects in Rochor will offer a total of 960 three- and four-room flats priced from S$409,000 before grants
• HDB released details of how it will recover subsidies provided for these flats
• Flat owners must return 6 per cent of the resale price or valuation, whichever is higher, to HDB upon selling these flats
• Property analysts expect flat owners to include the recovery amount into the overall price when they sell their homes

SINGAPORE — Details of the first flats under the  Prime Location Public Housing (PLH) model were revealed on Wednesday (Nov 17), and they will cost S$409,000 upwards before grants.

For the first time, the Housing and Development Board (HDB) also laid out how the authorities will claw back subsidies provided for these flats — one of the features of the PLH scheme.

A total of 4,501 flats was launched in this month’s Build-To-Order (BTO) sale exercise.

The flats on offer are spread across nine projects in Chua Chu Kang, Hougang, Jurong West, Kallang Whampoa, Rochor and Tengah.

The Rochor projects — River Peaks I and River Peaks II — fall under the PLH model given their central location.

The model aims to ensure that new public housing in prime and central locations will remain affordable and accessible for Singaporeans.

It imposes stricter ownership criteria for ownership of HDB flats in prime locations. Flats under this model have a 10-year, instead of five-year, minimum occupation period.

Given the high cost of land in prime locations, flat owners in these areas will also receive more government subsidies on top of existing ones already given out to BTO flat buyers.

Applications for the BTO flats are open from Wednesday to next Tuesday.

COST OF BTO FLATS IN PRIME LOCATION

There will be 960 units of three- and four-room flats on offer for the launches in Rochor.

Excluding grants, a new three-room BTO flat in this area will cost S$409,000 upwards. The price for a four-room flat starts at S$582,000.

These prices are lower than the lower end of transacted prices of resale HDB flats in the surrounding area.

Three-room flats in the neighbouring estates cost between S$490,000 and S$555,000, while four-room flats are priced between S$630,000 and S$770,000.

SUBSIDY RECOVERY

HDB said on Wednesday that homeowners who secure BTO flats in Rochor will have to return 6 per cent of the resale price or valuation, whichever is higher, upon selling their property.

This will apply regardless of when the sale is made.

The subsidy recovery is imposed so that homeowners who receive extra subsidies for buying flats in prime locations will have parity with other BTO flat owners who are not accorded these extra subsidies, HDB said.

“This amount to be recovered is commensurate with the extent of the additional subsidy that has been provided,” it added.

Mr Ismail Gafoor, chief executive officer of property firm PropNex Realty, said that the recovery amount is “modest considering the benefits arising from the location and the potential capital appreciation that the flats stand to gain”.

There is a “high possibility” that flat owners will include the recovery amount into the overall sale price in the future, he said.

Ms Christine Sun, senior vice-president of research and analytics at property firm Orange Tee and Tie, said that the rate “seems reasonable”.

She also agreed that many sellers will factor the amount of the recovered subsidy into their selling price in future.

For example, if a four-room flat under the new model is sold for S$1.2 million, the recovery subsidy will be around S$72,000. This means that the owner will still enjoy a gross profit of at least S$500,000, she said.

HDB said that the priority quotas in this area for flats allocated under the Married Child Priority Scheme will also be reduced to two-thirds of the usual quota.

The scheme allows married children and their parents to live close to each other.

The quotas in these areas will be up to 20 per cent for first-time buyers who are families, and up to 2 per cent for second-time buyers who are families and who have previously owned a subsidised flat.

OTHER BTO LAUNCHES

The other launches in the latest BTO exercise are mostly in the non-mature towns of Chua Chu Kang, Hougang, Jurong West and Tengah.

The units on offer include two-room flexi flats and three to five-room flats. Two-room flexi flats, which come with a 99-year or shorter lease, have been popular among older buyers or singles.

The cost of two-room flexi flats in Chua Chu Kang start from S$72,000 excluding grants. 

A three-room flat in Jurong West’s Nanyang Opal project starts from S$173,000 excluding grants.

The highest valued flats are five-room flats in Tengah, priced from S$428,000 excluding grants.

The remaining project, Kent Heights, is in the mature area of Kallang Whampoa.

Two-room flexi flats in this estate start from S$192,000 and four-room flats start from $511,000. These prices exclude grants.

A further 1,798 Sale of Balance units across various estates are also offered for sale in this month’s exercise.