Commentary: Are HDB flats still attractive as an investment after new rules for prime locations?
The unique dual features of housing, both as a place to live in and a largely stable and appreciating investment, are mutually reinforcing in a country that continues to grow economically and attract people to come and put roots down.
A Built-to-Order (BTO) home is a benefit reserved for Singaporeans that creates a hefty retirement nest egg.
A 4-room BTO in Fernvale Grove bought in 2004 between S$129,00 and S$162,000 saw an average transacted price of S$469,000 in 2021 – a 222 per cent return.
A resale in the Sengkang vicinity bought at the same time and resold in 2021 fetches about 69 per cent in contrast.
PUBLIC HOUSING AIMS TO PROVIDE AFFORDABLE, INCLUSIVE HOMES
Over the decades, public housing has evolved to meet the higher aspirations of rising upper-middle class Singaporeans who might otherwise be outpriced in the private property market.
Collaboration with private developers to create flats with modern layouts through a Design, Build and Sell Scheme (DBSS) gave birth to 13 such developments after 2006, starting with The Premiere by Sim Lian, before discontinuing in 2012.
Executive condominiums (ECs) – a hybrid housing development with shared facilities like pools, clubhouse, gymnasium room, tennis courts and 24-hours security, which can be privatised after 10 years – also spawned.
More recent iconic projects like those at Dawson – SkyTerrance@Dawson, SkyVille@Dawson, Pinnacle@Duxton – designed by private architects, look like, if not better, than private condominiums.
The latest evolution in housing, the prime location public housing (PLH) model unveiled by Minister for National Development Desmond Lee in October, was designed to give Singaporean families of all income groups a chance to live in the city centre, the Greater Sothern Waterfront, and other central areas.
A 6 per cent subsidy clawback mitigates the risk of excessive windfalls from a resale, along with brakes in the form of 10-year minimum occupation periods (MOP). Homeowners cannot rent out their entire homes at any point and can only sell to a strict pool of eligible buyers.
With all these rules, do people still want to buy these HDB flats? The answer is pretty resounding. The first batch of BTO homes in Rochor has seen healthy demand, at 10.3 times over-subscription.
Artmotion Asia
