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Our Takeaways from the Recent Rollout of the Prime Location Public Housing (PLH) Model

If you remember almost a decade ago, getting a much coveted flat at Pinnacle @Duxton is akin to striking 4-D. Pinnacle @Duxton was the poster child of HDB estate located in the prime areas of Singapore. Many of us heartlanders have always felt the Greater Southern Waterfront (GSW) is out of reach, where it’s only accessible for the wealthy folks with deep pockets.
Needless to say, the new Prime Location Housing (PLH) model announced earlier this week was welcomed news for the mass market. Having subsidy clawbacks and 10-year Minimum Occupancy Period (MOP) would essentially reflect affordability and inclusivity which was the original HDB’s ethos of “We provide affordable, quality housing and a great living environment where communities thrive.”
There’s no doubt that in recent years, there’s notoriety among sellers’ pushing up of house prices due to the ability to fetch higher quantum. Therefore, without the curbs, there’s no doubt that GSW or prime locations would definitely be out of reach. On top of that, the gap in prices between a private home and a HDB in the Central Region is certainly closing up. To put this into context – A 2-bedroom Highline Residence unit in town is being sold at $2.2 million whilst the HDB home within close proximity is being listed for $1 million.
The goal of the Singapore Government is very crystal clear – it’s to allow Singaporeans who genuinely desire to live in the heart of the city for the long term stay. Rather than profiteering massively from the sale of their homes upon completion of the MOP period. This is one of the indirect cooling measures to control the drastic escalation of resale prices in the near future. With the ebbs of the COVID pandemic and borders opening up gradually, we do foresee a large influx of rental demand from expatriates who have a tendency to eye for homes in the prime location. By restricting the ability to rent out the entire house under this PLH scheme, this would prevent homeowners from “playing the investment system”. However, there’s always 2 sides to the coin – With COVID construction delays extending the wait time by 2-3 years. Essentially, this points the potential holding period for a BTO project under the PHL scheme to be around 15 years or more. Without a shadow of doubt, it’s a major factor in your decision making, and it’s not to be taken lightly. Many aspects of your life can change in the next 15 years, added onto the fact that you can’t upgrade to a private property during this period. Despite the hype around affordability and inclusivity of homes under this PLH scheme, there are many other up and coming BTO projects in suburban areas of Singapore (i.e. Yishun, Woodlands, Sembawang and others). This gives you more flexibility and mobility to upgrade/rent out the whole flat without being tied down by the restrictions. Moving forward, working from home would become more of a norm in the post-COVID era. Living in closer proximity to the CBD areas may not be the utmost priority and dream of most Singaporeans.

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