Are nearby resale HDB flats a viable alternative to PLH flats?
By Elizabeth Choong
/ EdgeProp Singapore |
Artist’s impression of King George’s Heights, which received the highest application rate among all PLH flats. Picture: HDB
Prime location public housing model (PLH)
The pilot prime location public housing (PLH) project – River Peaks I and II - was launched in November 2021. The four-room flats met with overwhelming response of 10.3 applicants for each flat, but the three-room flats were less popular with a lower application rate of 3.1.
To date, six PLH projects with a total of 5,545 units have been launched over four Build-To-Order (BTO) exercises. Each PLH project has met with varying degrees of success, depending on its location, proximity to amenities and launch price.
A key feature of the PLH model is the longer minimum occupation period (MOP) of 10 years – double the five years required for a BTO flat.
The resale HDB market may be the answer for some buyers who wish to live in a central location but want to avoid the longer MOP for PLH. As the PLH model is new, there are many nearby HDB flats that are not PLH. Immediate occupation is also possible for resale flats.
The main drawback of resale flats would be their higher prices, especially if the resale flat just obtained MOP. Older resale flats are likely to be priced lower, so buyers will have to find a balance between affordability and length of remaining tenure.
Rochor: First area to have PLH flats
The first two PLH projects are located along the Rochor Canal. River Peaks I and II was introduced as the first PLH project last November, followed by King George’s Heights in February.
River Peaks I and II is located beside Jalan Besar MRT Station, which has 62 HDB blocks with 7,281 units within a 1km radius.
King George’s Heights is located near Lavender MRT Station. Within a 1km radius of the MRT station, there are 45 HDB blocks with 5,589 units.
Limited number of nearby HDB flats with long remaining tenure
The average age of the HDB flats near River Peaks I and II is 37 years and the minimum age is 18 years. As such, no nearby BTO flats have received MOP in recent years or will receive MOP in next few years. This means that River Peaks I and II is the only option if home buyers want a new HDB flat in Central Area, which could explain its high application rate.
There are more nearby resale flats as alternatives for King George’s Heights. While the average age of nearby HDB flats is 34 years, the minimum age is only five years, indicating that there are BTO flats that just obtained MOP. Examples include Whampoa Dew along Lorong Limau that obtained MOP in January last year. Unfortunately, Whampoa Dew is a small project with only 249 four-room and 81 one-room flats. (Find HDB flats for rent or sale with our Singapore HDB directory)
Resale three and four-room HDB flats in Central Area and Kallang/Whampoa HDB towns are averaging $730 psf and $691 psf respectively. The lower resale price for Kallang/Whampoa could account for the lower BTO price for King George’s Heights. However, resale prices are growing stronger at Kallang/Whampoa (increase by 32% since 2012) compared to Central Area (growth of 14%).
It is also notable that HDB median resale prices in 2Q2022 for four-room flats in both areas are at least $105,000 higher than their PLH counterparts. This indicates that PLH flats are the more affordable option if buyers plan to buy a four-room flat in either town.
However, the median resale price for three-room flats in Kallang/Whampoa of $372,500 is within the price range for a three-room flat in King George’s Heights. This means that unsuccessful PLH applicants should consider the resale market for a similarly priced, albeit older, flat.
If buyers are still keen on purchasing a brand-new HDB flat, the upcoming November BTO exercise has a site in Kallang/Whampoa with 470 three- and four-room flats. Although HDB has not made any announcements, the site is widely expected to be launched under the PLH model due to its proximity to Kallang MRT Station and Kallang River.
Bukit Merah: bumper crop of PLH flats
To date, there have been three PLH projects with 3,320 units (Bukit Merah Ridge, Alexandra Vale and Havelock Hillside) in Bukit Merah - the most units in any HDB town. This could be due to the proximity of Bukit Merah to the CBD, Orchard Road, Chinatown and Bugis.
For more details on the three projects, check out our articles on August 2002 and May 2022 BTO exercises.
All three PLH projects in Bukit Merah were oversubscribed, but the application rate is not as overwhelming as for King George’s Heights. This could be due to the higher price point for the Bukit Merah PLH flats, where three- and four-room flats cost at least $370,000 and $531,000 respectively.
Lots of older resale flats in Bukit Merah
The nearest operational MRT station to Bukit Merah Ridge and Havelock Hillside is Tiong Bahru. There are 179 HDB blocks with 18,904 flats within a 1km radius of the MRT station. Average age of the blocks is 38 years.
When Phase 3 of the Thomas-East Coast Line (TEL) is up and running later this year, future residents will have another MRT station – Havelock MRT Station – within walking distance.
Alexandra Vale is located opposite Redhill MRT Station, which has 118 blocks of 11,331 HDB flats within a 1km radius. The flats near Redhill MRT Station have an average age of 31 years, which makes them younger than the flats near Tiong Bahru MRT Station. The HDB flats in both locations have a minimum age of six years.
The latest HDB project in Bukit Merah to achieve MOP is Telok Blangah Parcview along Telok Blangah Street 31. The project obtained MOP in July last year and has 386 three-room and 922 four-room flats. Larger families are out of luck as the project does not have five-room or larger flats. As Telok Blangah Parcview is not launched under the PLH model, the shorter MOP of five years is applicable.
Based on resale transactions from January to September, average prices for three and four-room HDB flats in Bukit Merah are $603 psf and $712 psf respectively. Since 2012, average prices for three and four-room flats have grown steadily at 9% and 14% respectively.
According to HDB, median resale prices in 2Q2022 for the two flat types in Bukit Merah are in line with the price ranges for the three PLH projects in the same town. If buyers are making a decision based purely on prices, PLH flats will definitely have the edge because of the lack of lease decay.
Ghim Moh Ascent: The first of many PLH projects in Queenstown
Ghim Moh Ascent is located in Queenstown, which is designated to be a Health District that will test-bed initiatives to enhance health and well-being of residents. Recreation facilities, such as playgrounds, fitness stations and roof gardens, will be added to the town. Ulu Pandan Canal, which is located next to Ghim Moh Ascent, will be transformed into a green corridor.
Ghim Moh Ascent is located opposite Buona Vista MRT Station, which has 95 HDB blocks with 13,043 units within a 1km radius. The flats have an average age of 35 years.
Three upcoming projects in November
The upcoming BTO exercise in November will have three projects in Queenstown that will collectively yield 3,250 units.
Two of the sites are near Ulu Pandan Canal and they are expected to be launched under the PLH model. One site is located along Commonwealth Avenue West and will have 1,330 units of three- and four-room flats. The other site is bounded by Ghim Moh Road and North Buona Vista Road and will have 960 units of two-room flexi, three- and four-room flats.
The third site is not expected to be launched under PLH because it is located further from an MRT station and hence less accessible. The site, bounded by Queensway and Portsdown Avenue, will have 960 units of Community Care Apartments as well as three- and four-room flats. If not launched under the PLH model, flats on the site will be suitable for buyers who want to live in a new HDB flat in Queenstown but wish to avoid the stricter restrictions for PLH flats.
The latest data from HDB indicates that the median price of three-room flats in Queenstown is $385,000, which is well within the price range for a three-room flat in Ghim Moh Ascent. On the other hand, the HDB median price for four-room flats in Queenstown is $829,000, which is at least $138,000 above the price range for the same flat type in Ghim Moh Ascent.
As such, buyers looking for a larger four-room flat in Queenstown should definitely submit an application in the upcoming BTO exercise, while those planning to buy a three-room flat can consider the resale market.
Ghim Moh Edge along Ghim Moh Link should be on the radar of buyers hunting for a resale HDB flat in Queenstown. The project received MOP in November 2020 and has 296 three-room and 661 four-room flats. The project is less than 10 years old, so the impact of lease decay will be minimum.
Check out the latest listings near Bukit Merah, Queenstown, Jalan Besar MRT Station, Lavender MRT Station, Kallang MRT Station, Havelock MRT Station, Redhill MRT Station, Tiong Bahru MRT Station, Buona Vista MRT Station
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