When the Government announced the new HDB Prime Location Public Housing (PLH) model in November 2021, it became the talk of the town.
The HDB market is hotter than ever – HDB resale prices rose for the 29th month in November, with many buyers willing to pay above market value and Cash Over Valuation (COV) for resale flats. The year is not yet over and 2022 has already seen more million-dollar HDB flat transactions than 2021, which is really saying something.
The “lottery effect” of certain prime HDB flats has been a key point of discussion in recent years. In short, this happens when one is lucky enough to secure a new flat in a very prime location and manages to sell it for a sizeable profit after. A famous example is the Pinnacle @ Duxton.
This is problematic for a few reasons: firstly, public housing should primarily be for owner-occupation, not for investment. It should be used to help Singaporeans afford a roof over their heads, not give us a windfall. Secondly, without intervention, gentrification may occur when only the wealthy can afford to buy homes and live in these expensive areas.
That’s where the new Prime Location Public Housing model comes in. Here’s everything you need to know about PLH HDB flats, plus your burning questions answered below.
HDB Prime Location Public Housing Model Summary
Additional subsidies for PLH flats, with subsidy recovery upon resale
New flats bought from HDB (e.g. PLH BTO flats)
New PLH flat buyers will enjoy additional subsidies, on top of existing EHG. However, if they sell the flat in future, they must pay back a percentage of the resale price
MOP extended to 10 years
Both new and resale PLH flats
The MOP for PLH flats will be 10 years instead of the current 5 years. The MOP will apply to new flats as well as when they’re resold
Reduced quota for Married Child Priority Scheme (MCPS)
New flats bought from HDB (e.g. PLH BTO flats)
The quota for the MCPS will be adjusted, depending on individual projects
Resale buyers subject to BTO eligibility criteria
Resale PLH flats
Resale buyers who buy PLH must fulfil BTO eligibility criteria (e.g. income ceiling, citizenship, etc)
Renting of whole flat not allowed
Both new and resale PLH flats
MOP or not, owners will not be allowed to rent out the whole HDB flat, only rooms
The Singapore government has also announced that only four HDB towns will be considered prime locations for now: the Central area, Queenstown, Kallang/Whampoa, and Bukit Merah. BTO flats released in these four HDB towns may or may not be released under the PLH model, subject to the site’s market value and factors such as distance to public transport nodes and other amenities.
1. Additional Subsidies for PLH HDB Flats, with Subsidy Recovery Upon Resale
This will ensure that the PLH flats remain affordable for BTO applicants. The catch is that if you do intend to resell your home after the Minimum Occupation Period (MOP), then you will need to pay it back. How much you will need to repay will be a percentage of the flat’s resale price then.
2. MOP Extended to 10 Years for PLH BTO Flats
For PLH HDB flats, the MOP is doubled to 10 years and will apply to both new flats and resale flat buyers.
10 years is really quite a long time, especially for new flat buyers – say you’ve successfully applied for a PLH BTO flat in November 2021 and the project takes four years to build, you can only sell the flat 14 years later.
This is intentional and meant to “strengthen the owner-occupation intent”. Buyers will be discouraged from buying these prime flats with speculative intent to ‘flip’ them shortly after.
3. Reduction of Married Child Priority Scheme (MCPS)
Currently, the Married Child Priority Scheme (MCPS) allocates up to 30% of HDB BTO units for first-timer families and 15% for second-timer families. For PLH BTO projects, HDB will review and adjust the quota depending on the location.
For example, the MCPS flats allocated may be kept more or less the same if there are many older HDB flats nearby. However, if the PLH BTO project is surrounded by private properties, then the quota may be lowered to give others more opportunities to buy flats there.
4. Resale Buyers Subject to BTO Eligibility Criteria
This one’s big news: for Prime Location Public Housing flats, the BTO criteria will apply even for resale buyers. This means that 10+ years down the road if you are interested to buy a resale unit that was previously launched under the PLH model, you must fulfil the BTO eligibility criteria.
This includes conditions around citizenship, family nucleus, income ceiling and private property ownership. In a nutshell:
Citizenship
At least one applicant and household occupant must be Singaporean
At least one applicant is a Singaporean or SPR. A household can be all SPRs.
Family nucleus
Must have an eligible family nucleus (e.g. married couple)
Must have an eligible family nucleus or single above 35 years old
Income ceiling
Prevailing (currently $14,000)
NA
Private property ownership
Must not own or have an interest in private property and have not disposed of any in the last 30 months
Allowed, but must dispose of private property within six months of buying the resale flat
A big change is that PLH resale flats are primarily for Singaporeans only. Also, singles are not eligible for now. The prevailing BTO income ceiling will apply (whatever it is 10+ years down the road). The rules around private property ownership are also tightened – while the disposal period for typical resale flats is only six months of purchase, for PLH flats it is in the past 30 months.
"There is an income ceiling (currently $14,000) for PLH resale flats while other resale flats have no income ceiling. This, again, is to prevent stereotyping that PLH resale flats are for the higher-income buyers only, and a bid to keep them affordable and more inclusive for all," said Dr Tan Tee Khoon, Country Manager – PropertyGuru Singapore.
This seems to be one of the tighter conditions, and the Government said that they will wait until around half of the 99-year lease before considering a review.
5. Renting of Whole PLH HDB Flat Not Allowed
Finally, to further discourage investors, renting the whole unit will not be allowed for the Prime Location Public Housing model – even after you’ve completed the long MOP. You may rent out rooms as usual, but not the entire apartment.
Resale of flat
Allowed after 5 years
Allowed after 10 years
Buying another private property
Allowed after 5 years
Allowed after 10 years
Renting out a whole flat
Allowed after 5 years
Not allowed
Renting out spare rooms
Allowed
Allowed
HDB Prime Location Public Housing Model: Yay or Nay?
As you can see, the main focus of the new PLH model is to reduce speculative activity and encourage inclusiveness. There is a strong social objective to ensure that these ‘atas’ areas don’t become wealthy enclaves.
So, since we can all agree that public housing should be kept affordable and accessible to all, the new PLH model by and large makes sense.
The 10-year MOP will weed out those who just want to ‘flip’ the property for profit, and in case there are some who are willing to wait it out, there is the subsidy recovery to dampen the windfall.
Furthermore, the tightened rules disallowing rental of the whole unit will also stop people from treating HDB properties as pure investments. With this, owners will no longer be able to buy the prime BTO flats and then upgrade and move out to private property, while keeping the HDB flat for rental income. They can buy a private property as an investment (after the MOP is fulfilled) but must continue to stay in the HDB flat.
"The clawback of additional subsidies under the Prime Location Public Housing model when the HDB lessee is able to dispose of the flat after an extended MOP of 10 years, is a mechanism put in place for equitability. This prevents HDB lessees of the prime housing location from over-benefitting as compared to another HDB lessee in a non-prime housing location.
The key to this new policy would be the formulae to compute the clawback which is specifically targeted at additional subsidies in the first sale. Unlike other housing locations, the MOP is extended. So the formulae may have an adjustment factor for parity too," said Dr. Tan Tee Khoon, Country Manager, PropertyGuru Singapore.
The only thing that may be tricky is the strict eligibility criteria for the resale of these flats. This heavily penalises many groups of buyers in the HDB resale market – e.g., PRs, singles over 35, and those earning just slightly above the income ceiling.
HDB BTO Launches Under the PLH Model
The first BTO flats launched under the PLH model were River Peaks I & II, the November 2021 Central Area (Rochor) HDB BTO flats. Subsequently, King George’s Heights in Kallang/Whampoa was launched during the Feb 2022 BTO exercise.
Past PLH BTO Launches (November 2021 to Now)
| Nov 2021 | River Peaks I & II (Central) |
| Feb 2022 | King George’s Heights (Kallang/Whampoa) |
| May 2022 | Bukit Merah Ridge (Bukit Merah) |
| May 2022 | Ghim Moh Ascent (Queenstown) |
| Aug 2022 | Havelock Hillside (Bukit Merah) |
| Aug 2022 | Alexandra Vale (Bukit Merah) |
| Nov 2022 | Kallang Horizon (Kallang/Whampoa) |
| Nov 2022 | Ulu Pandan Banks and Ghim Moh Natura (Queenstown) |
Upcoming BTO Launches That May Fall Under the PLH Model
| Feb 2023 | Kallang/Whampoa |
| Feb 2023 | Queenstown |
| May 2023 | Kallang/Whampoa |
| May 2023 | Queenstown |
The upcoming BTO 2023 launch in February 2023 might see the Queenstown and Kallang/Whampoa projects fall under the PLH model. Likewise, some of the May 2023 BTO launches are likely to fall under the PLH model. Still, this remains unconfirmed and we will know more details when the projects are actually launched.
Additionally, the 6,000 Greater Southern Waterfront BTO flats, expected to be launched in the next three years, will likely fall under the PLH model; the same goes for the upcoming Farrer Park BTO flats. Likewise, there is speculation that future public housing in the Bayshore neighbourhood will be considered to be sitting on prime land too.
Should You Still Buy a Prime HDB Flat Under the PLH Model?
That’s up to you, but we say – if you’re eligible and intend to live there for the long term, go for it! In terms of accessibility and convenience, these are the best HDB flats you can hope for. The additional subsidies to keep BTO prices down are a plus.
One thing to take note of is that depending on the land size, these projects may comprise mostly smaller units. For those who foresee having children or more family members, the 10-year MOP is a long time and should be considered when you’re making plans.
If you had your eye on prime-area HDB flats for the profits, then you can probably give it up. The Prime Location Public Housing model was designed to manage this intent, and most of the ground (if not all) is covered.
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