SINGAPORE: Buyers of future Build-to-Order (BTO) flats in prime locations will face a longer minimum occupation period (MOP) of 10 years, as part of a new model meant to keep housing in these locations accessible for Singaporeans, said the Housing & Development Board (HDB) on Wednesday (Oct 27).
This 10-year MOP – which is how long owners must occupy their flats before being allowed to sell it on the open market – is double that of typical BTO projects.
Under the model, these flats will also come with extra subsidies, but those who eventually sell their units will have to pay back HDB a percentage of the flat’s resale price.
The measures come more than two years after it was first announced that thousands of homes would be built on the Greater Southern Waterfront , a prime location that called for a new housing model.
Speaking at a media briefing, National Development Minister Desmond Lee said that if left entirely to private market forces, these prime locations would become expensive and exclusive, with housing that only the well-to-do can afford.
“We see this happening in many cities around the world ... But we are determined not to let this happen in Singapore,” said Mr Lee.
The new Prime Location Public Housing (PLH) model, comprising a slew of tightened rules, follows 10 months of public engagement.
It will only apply to future projects – with the first to be launched at Rochor in the upcoming November BTO sales exercise.
As flats in these prime areas will “naturally command higher market values”, the units will be priced with additional subsidies, on top of those currently provided for all BTO flats.
“This will keep flat prices affordable for a range of Singaporeans,” said HDB.
But those who sell their flats later on will have to pay a percentage of the unit’s resale price to HDB, allowing authorities to recover the additional subsidies.
Mr Lee said this will address concerns over extra subsidies leading to “excessive windfall gains” and whether it would be fair to BTO buyers in other parts of Singapore.
The subsidy recovery percentage will correspond to the extent of the initial additional subsidy provided, according to HDB.
More details will be announced in the November BTO exercise, but Mr Lee added that the percentage may be adjusted for other projects in future, depending on market conditions and the subsidies needed.
To buy BTO units in prime areas, the eligibility criteria will be the same as that for buying BTOs elsewhere.
But the quota for priority allocation under the Married Child Priority Scheme will be reduced.
Currently, the scheme sets aside up to 30 per cent of BTO units for those who want to live with or near their parents or children in the area.
Moving forward, quotas for PLH projects will be adjusted depending on their location.
PLH flat owners will have to fulfil a 10-year MOP before they can sell their flats in the open market or invest in a private residential property.
In addition, owners will not be able to rent out their whole flat at any point in time, even after the MOP is over. They will only be allowed to rent out spare bedrooms.
These conditions will apply to both the person who buys the BTO unit from HDB, as well as all subsequent buyers on the resale market.
Ownership conditions for BTO models versus Prime location Public Housing (PLH) model. (Photo: HDB)
“These policies will help to strengthen the owner-occupation intent of public housing and also seek to deter speculative demand and moderate resale prices,” said Mr Lee.
He added that appeals by those who genuinely face extenuating circumstances will be reviewed on a case-by-case basis.
On top of that, the resale of these flats will be restricted to only those who meet eligibility conditions to buy BTO flats.
These conditions include meeting a household income ceiling, currently set at S$14,000, and being an eligible family nucleus, such as a married couple.
Eligibility criteria for purchasing flats from HDB and resale flats under the PLH model, compared to criteria for purchasing typical resale flats. (Photo: HDB)
“Without such restrictions, the resale prices of these homes in prime locations may rise beyond the reach of many Singaporeans over time.
“So we will maintain the resale restrictions for at least half of the 99-year tenure of each prime location flat, before we consider whether to review them,” said Mr Lee.
The PLH model will apply to selected public housing projects in prime and central locations, such as the city centre and surrounding areas, including the Greater Southern Waterfront, said HDB.
The first project to be launched under the PLH model will be at a site in Rochor.
Located along Kelantan Road and Weld Road, it will feature 960 units of three-room and four-room flats, and 40 two-room rental flats.
A map of where the upcoming BTO project in Rochor will be located. (Photo: HDB)
Mr Lee also stressed that like other policies, the PLH model “is not cast in stone”.
“It is very new and we will continue to review the parameters over time, based on our experience from the projects that are launched along the way.
“We will make adjustments where necessary to ensure that the model achieves our goals and remains relevant to the needs of Singaporeans.”
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This 10-year MOP – which is how long owners must occupy their flats before being allowed to sell it on the open market – is double that of typical BTO projects.
Under the model, these flats will also come with extra subsidies, but those who eventually sell their units will have to pay back HDB a percentage of the flat’s resale price.
The measures come more than two years after it was first announced that thousands of homes would be built on the Greater Southern Waterfront , a prime location that called for a new housing model.
Speaking at a media briefing, National Development Minister Desmond Lee said that if left entirely to private market forces, these prime locations would become expensive and exclusive, with housing that only the well-to-do can afford.
“We see this happening in many cities around the world ... But we are determined not to let this happen in Singapore,” said Mr Lee.
The new Prime Location Public Housing (PLH) model, comprising a slew of tightened rules, follows 10 months of public engagement.
It will only apply to future projects – with the first to be launched at Rochor in the upcoming November BTO sales exercise.
SUBSIDY CLAWBACKS
As flats in these prime areas will “naturally command higher market values”, the units will be priced with additional subsidies, on top of those currently provided for all BTO flats.
“This will keep flat prices affordable for a range of Singaporeans,” said HDB.
But those who sell their flats later on will have to pay a percentage of the unit’s resale price to HDB, allowing authorities to recover the additional subsidies.
Mr Lee said this will address concerns over extra subsidies leading to “excessive windfall gains” and whether it would be fair to BTO buyers in other parts of Singapore.
The subsidy recovery percentage will correspond to the extent of the initial additional subsidy provided, according to HDB.
More details will be announced in the November BTO exercise, but Mr Lee added that the percentage may be adjusted for other projects in future, depending on market conditions and the subsidies needed.
Related:
LOWER QUOTA FOR PRIORITY SCHEME
To buy BTO units in prime areas, the eligibility criteria will be the same as that for buying BTOs elsewhere.
But the quota for priority allocation under the Married Child Priority Scheme will be reduced.
Currently, the scheme sets aside up to 30 per cent of BTO units for those who want to live with or near their parents or children in the area.
Moving forward, quotas for PLH projects will be adjusted depending on their location.
10-YEAR MINIMUM OCCUPATION PERIOD
PLH flat owners will have to fulfil a 10-year MOP before they can sell their flats in the open market or invest in a private residential property.
In addition, owners will not be able to rent out their whole flat at any point in time, even after the MOP is over. They will only be allowed to rent out spare bedrooms.
These conditions will apply to both the person who buys the BTO unit from HDB, as well as all subsequent buyers on the resale market.
Ownership conditions for BTO models versus Prime location Public Housing (PLH) model. (Photo: HDB)
“These policies will help to strengthen the owner-occupation intent of public housing and also seek to deter speculative demand and moderate resale prices,” said Mr Lee.
He added that appeals by those who genuinely face extenuating circumstances will be reviewed on a case-by-case basis.
TIGHTER RULES FOR BUYING RESALE FLATS
On top of that, the resale of these flats will be restricted to only those who meet eligibility conditions to buy BTO flats.
These conditions include meeting a household income ceiling, currently set at S$14,000, and being an eligible family nucleus, such as a married couple.
Eligibility criteria for purchasing flats from HDB and resale flats under the PLH model, compared to criteria for purchasing typical resale flats. (Photo: HDB)
“Without such restrictions, the resale prices of these homes in prime locations may rise beyond the reach of many Singaporeans over time.
“So we will maintain the resale restrictions for at least half of the 99-year tenure of each prime location flat, before we consider whether to review them,” said Mr Lee.
PRIME LOCATION
The PLH model will apply to selected public housing projects in prime and central locations, such as the city centre and surrounding areas, including the Greater Southern Waterfront, said HDB.
The first project to be launched under the PLH model will be at a site in Rochor.
Located along Kelantan Road and Weld Road, it will feature 960 units of three-room and four-room flats, and 40 two-room rental flats.
A map of where the upcoming BTO project in Rochor will be located. (Photo: HDB)
“NOT CAST IN STONE”
Mr Lee also stressed that like other policies, the PLH model “is not cast in stone”.
“It is very new and we will continue to review the parameters over time, based on our experience from the projects that are launched along the way.
“We will make adjustments where necessary to ensure that the model achieves our goals and remains relevant to the needs of Singaporeans.”
Continue reading...