HDB reveals Bishan BTO plans: Analysis + What you should know

Slightly over been a week has passed since plans to build more than 5,000 Build-to-Order (BTO) flats at Queenstown were unveiled, and now HDB has followed up with a proposed development of 1,504 BTO flats in the mature estate of Bishan to be ready by 2025.

Notably, there has never been a BTO project in Bishan aside from the seniors-only Golden Jasmine in 2016, which has only studio units. The proposed flats, which will be located on a plot of land 44,424 sq m⁠—about 7 football fields⁠—in area, will be a mix of 2-, 3- and 4-room units in six 22 to 39 storey blocks.

That’s as tall as neighbouring condos Sky Vue and Sky Habitat.

And like HDB BTO projects Pinnacle @ Duxton and the recently launched Punggol Point Cove, the proposed BTO flats at Bishan will also feature roof gardens. Proposed amenities include a childcare centre, a resident’s committee centre, a minimart, a coffee shop and other shop units.

If a BTO launch in a mature estate isn’t enough, being a five-minute walk to major amenities such as the Bishan MRT interchange (North-South Line and Circle Line), Junction 8 Shopping Centre, Bishan Sports Complex and Bishan-Ang Mo Kio Park (accessible by a park connector along Kallang River) will certainly make the Bishan BTO a rarity. A well-regarded primary school, Catholic High School, is less than 800 metres away.

Then there’s also the promise of these million-dollar views:

Even though we really like the location, and most of us would rather win the ballot for a Bishan BTO instead of 4D First Prize, here are four things you need to consider before you pin your hopes on this.

As much as our ministers assert that BTO flats are not a form of investment, Singaporeans sure know a profit when they can make one. For all those who have their eyes on this planned Bishan BTO, you can be sure that applicants will be salivating not just for the amenities, but also for how much the more flats will eventually be worth in the open market once the Minimum Occupation Period (MOP) is over.

That said, it’s highly likely that HDB will price this BTO project at a premium as all amenities in this mature estate have been fully developed. Given that HDB factors land cost into account when pricing BTO flats, several factors—the proximity of this project to a cluster of key amenities and the highly lauded Sky Vue and Sky Habitat condominiums, coupled with the median price of resale flats in Bishan itself ($542,500 in Q2 2019)—will collectively push up the launch price of the Bishan BTO flats.

So it’s worth noting that HDB will be launching BTO projects in Toa Payoh in February 2020, in what could be worthy alternatives to the Bishan BTO. Of the 1,620 units, 920 of them will be located within six-minutes’ walk of Caldecott MRT, which will soon become an interchange station for the Circle Line and Thomson-East Coast Line. When that happens, residents will be five MRT stations away from Orchard (same as Bishan MRT), and 10 stops from the CBD (Shenton Way MRT station).

At Caldecott, there could be upside from future amenities, considering the undeveloped land around Caldecott MRT station, as well as the North-South Corridor expressway, which will have an in-ramp at Caldecott and take resident motorists to the city in 15 minutes. There’s a URA Reserve Site on top of the station (a possible mall) and a demarcated primary school site next to the BTO location, on top of easy access to MacRitchie Reservoir to get lost in nature.

Meanwhile, the other 700-unit BTO site for the Feb 2020 Toa Payoh launch isn’t too shabby either, considering that LTA is exploring plans for a yet unnamed MRT route that could call at Toa Payoh East, where that BTO project is located.

The lesson here is not so much about comparing one location over another. Rather, it’s about identifying sites with similar attributes but with potentially higher upside. We estimate that the launch prices for the upcoming BTO near Caldecott could be, on average, $20,000 to $30,000 lower than the eventual Bishan BTO launch price, despite Caldecott being closer to the CBD in terms of absolute distance.

It’s good to be realistic about our chances when it comes to balloting for BTO flats in red-hot locations. Towner Crest and Kallang Breeze⁠—two prime BTO this year located within short walking distance to an MRT station⁠—were 10.5 times oversubscribed, with over 8,950 applicants fighting over 855 units. Among first-time applicants, the projects were 8.8 times oversubscribed.

We argue that Bishan, a town that has maintained a stellar (and somewhat elitist) reputation as a centrally located, family-friendly estate since it was built in the late 1980s and 1990s, will attract even more applicants in an BTO sales launch. There’s also the allure of this being Bishan’s first-ever BTO launch for the masses, and possibly the last one for a long-time.

Remember the ill-fated HDB flats launched under the Design Build and Sell Scheme (DBSS)? These are HDB flats were sold under a private developer at a higher pricing, with premium finishes and layouts that include balconies, but without condo amenities. The scheme has been suspended since 2011, in large part due to widespread owner complaints over poor workmanship from the private developers in some of these projects.

Launched in 2008, Natura Loft in Bishan is one of the more successful DBSS projects to have been built, which is now regularly fetching prices in the vicinity of $800,000 for its 4-room units.

Given that HDB will likely take advantage of the proposed Bishan BTO site’s superior location, the new flats will likely incorporate unique design and architecture that will make it a landmark, DBSS-like project, even though it’ll be developed by HDB. The plans for roof gardens atop 39-storey blocks are a hint of what’s to come.

So, not only would the Bishan BTO flats come with the price tag of being right smack in the centre of a mature estate, HDB will likely position it as "premium flats"—a kind of DBSS Mark II that fills the gap between regular HDB flats and Executive Condominiums (ECs). To take advantage of the views, for instance, we foresee that a handful of the Bishan BTO units will come with balconies, adding to the launch price which is likely to be at the $600,000 region for 4-room flats.

Yes, the HDB has raised the household income ceiling to $14,000, but the popularity of the planned Bishan BTO means it will see applications from Singaporeans of various income levels, all vying for that once-in-a-lifetime opportunity to own a BTO flat that’s rarer than the rarest of all Pokemons.

And empowered by the increase in CPF Housing Grant amounts under the Enhanced Housing Grant (EHG), we will be seeing more applicants with, say, a $6,000 household income applying for a $600,000—just because grants make the dream possible.

We love property and home ownership, but there is a method to the madness. Just because HDB allows you to use up to 30% of your monthly household income to pay off your mortgage doesn’t mean you should.

Many times, we see aspirational Singaporeans over-budgeting for their first property. Little do they know that doing so could affect their other goals in life, like starting a business or buying a second property down the line.

For the BTO flats in Bishan, there’s even more reason to consider alternatives. Because while most of us are used to the notion that a resale flat costs more than their BTO counterparts, there are exceptions, particularly for a mature estate like Bishan, Queenstown or Bukit Merah.

In fact, a PropertyGuru search for 4-room flats located near to Bishan MRT under $500,000 returned a decent number of results.

And that is why, even now, HDB resale flats are popular with savvy first-time homeowners, simply because they are a great means to an end. (The larger floor area could be a bonus, too.)

So, while the Bishan BTO is still worth taking a punt on, the Singaporean property dream burns bright because there’s more than one way to climb the ladder—you just have to pace yourself right.