Stronger buyer response to first projects under prime location rules than for other BTO flats: Desmond Lee
SINGAPORE — About four in five buyers invited to take part in the selection exercise for the first Build-To-Order (BTO) flats under the Prime Location Public Housing (PLH) model, at Rochor, have booked their flats, which is higher than the average 60 per cent for most BTO projects.
- National Development Minister Desmond Lee wrote in a Facebook post on Monday (May 23) that there has been "good response" for the two PLH launched in November last year
- Due to the strong response, HDB will also be launching two PLH projects in the upcoming exercise, in Bukit Merah and Queenstown
- Mr Nicholas Mak, head of research and consultancy at real estate agency ERA Singapore, said that the appeal of the the PLH projects lies in the location and height
SINGAPORE — About four in five buyers invited to take part in the selection exercise for the first Build-to-Order (BTO) flats under the Prime Location Public Housing (PLH) model at Rochor have booked their flats, which is higher than the average 60 per cent for most BTO projects.
As the Government prepares to unveil details of two more PLH projects, at Bukit Merah and Queenstown, property experts told TODAY that reasons for the stronger take-up of the Rochor flats included the prime location and the height of the housing blocks, at 47 storeys.
National Development Minister Desmond Lee wrote in a Facebook post on Monday (May 23) that there has been "good response" for the two PLH projects launched in November last year, River Peaks I & II, located in the Rochor area.
Mr Lee wrote: "We are in the midst of the selection exercise for the first PLH project at Rochor, River Peaks I & II. About 80 per cent of buyers who have been invited for the selection exercise thus far have proceeded to book their flats, higher than the average of 60 per cent for most BTO projects."
Owing to the strong response, the Housing and Development Board (HDB) will be launching two more PLH projects in the upcoming exercise.
In response to queries from TODAY on Monday, HDB said the projects will be located at Bukit Merah and Queenstown, but did not provide any further details.
The board is launching 4,500 BTO units in those two townships along with Jurong West, Toa Payoh and Yishun in its May 2022 BTO exercise, Mr Lee announced in his post.
The PLH model was launched in November last year "to ensure that all HDB flats, even those located in prime and central locations, will remain affordable and accessible over time", he wrote.
Rules for the PLH project include a minimum occupation period (MOP) of 10 years, and the exclusion of singles as buyers. Also, when the owners sell the flats, they must return 6 per cent of the resale price or valuation, whichever is higher, to HDB.
The two PLH projects in Rochor saw nearly 7,000 applicants vying for 680 units, according to the HDB website.
When asked why the average number of buyers invited for the selection exercise is higher for PLH than BTO projects, Mr Nicholas Mak, head of research and consultancy at real estate agency ERA Singapore, said that the appeal of the PLH projects lies in the location and height.
He told TODAY on Monday: "Firstly, it is rare to get BTO projects so near the city centre, like Rochor. Secondly, the PLH clawback is 6 per cent, which some people are saying is low... But when you sell after the MOP of 10 years, by then it will appreciate in price."
He added that the height of the projects, at 47 storeys, is also a key attraction for buyers.
"The flats are going to be taller than the older resale flats in the location and given that it is younger than other flats nearby, when they go to the resale market, the price will be higher. Everything spells to eventual price appreciation," he said.
Echoing his views, Ms Christine Sun, senior vice-president of research and analytics at real estate agency OrangeTee & Tie, said: "Many Singaporeans are drawn to PLH model flats given their key selling points like prime location, good price appreciation and possibly good design features. There will be good rental potential in the future.
"As prices of private condos and new executive condominiums are still climbing, PLH flats may be a good alternative for the sandwiched class. Some young Singaporeans may feel that they have been priced out of the market, especially the ability to purchase a home in the prime districts," she said.
Before HDB identified the sites of the new projects, experts had earlier said Bukit Merah and Queenstown would be suitable as they are close to the city centre and located in mature estates.
Mr Lee Sze Teck, senior director of research at property firm Huttons Asia, said: "Some five-room flats in the vicinity like City Vue @ Henderson and Ghim Moh Valley have exceeded S$1 million. There may be more million dollar flat transactions in the months ahead.
"Planning two PLH BTOs at Bukit Merah and Queenstown is sending a signal to the market that there will be affordable BTO flats and perhaps curb the possibility of more record breaking HDB flat prices."