singapore prime district

According to Channel News Asia, analysts predict that the new prime location public housing (PLH) model’s harsher resale rules for apartments would increase demand for flats in surrounding locations that aren’t subject to the same limitations.

This comes after officials stated on Wednesday (27 October) that purchasers of future Build-to-Order (BTO) apartments in key neighborhoods would face a 10-year Minimum Occupation Period (MOP) as well as limits on renting out the whole property even after reaching MOP.

After the apartment is sold, they will be subject to a subsidy clawback.

Certain Housing and Development Board (HDB) developments in strategic places, such as the city center and neighboring districts, including the Greater Southern Waterfront, will be subject to these criteria.

Analysts praised the decision as a positive start toward reducing the “lottery effect” and fostering inclusion in high-demand regions.

They did warn out, however, that the stricter limits may have the unintended consequence of increasing demand for neighbouring apartments that are not subject to the laws.

Older apartments or prior releases are not impacted by this — owners may still sell or sublease them in five years.” “Those hoping for future rental returns or capital appreciation gains would most likely opt for these residences,” said Dr Lee Nai Jia, Deputy Director of the National University of Singapore’s Institute of Real Estate and Urban Studies (IREUS), as stated by CNA.

“They will also be aware that such things will not be available in the future, particularly in the city center.” As a result, I believe demand and price will increase.”

However, he cautioned purchasers to consider the duration of the remaining leases on these older properties.

Nicholas Mak, ERA Realty’s Head of Research and Consultancy, agrees that demand will certainly flow over to neighboring neighborhoods, but does not foresee a big price rise.

“With the construction of the PLH flats, the entire supply of HDB flats in that vicinity will grow.” According to economic theory, increasing supply may help to mitigate price increases,” he told CNA.

“As a result, any rise in non-PLH flat resale prices would still be influenced by other significant variables like as the status of the economy, family income, market circumstances, and government involvement.”

Buyers may also look at elderly properties that are not in excellent neighborhoods, according to experts.

While raising the MOP to ten years may filter out speculative purchasers, analysts warn that it may affect buyers whose circumstances change over time, such as families with children who demand additional room.

National Development Minister Desmond Lee, on the other hand, said that appeals by people who are really suffering extenuating circumstances would be reviewed on a case-by-case basis.

Mak believes that the prolonged MOP would reduce market liquidity since more purchasers will be committed to their house purchase for a longer length of time.

If the share of PLH flats in total BTO supply grows over time, HDB upgraders’ desire for private residences may likewise slow.