For those looking to buy a home, the new Prime Location Public Housing (PLH) scheme is definitely worth a look. The scheme is meant to ensure that affordable HDB flats continue to be built in the Central Area for Singaporeans.
During the November 2021 BTO Launch, the first PLH BTO at Rochor – River Peaks I and River Peaks II – are being offered. Besides the obviously great location, we may also be lured by the “lottery winnings” that owners who purchased Pinnacle@Duxton are sitting on.
Situated next to Jalan Besar MRT station, the Rochor PLH BTO will feature 6 blocks of 47-storey flats. A total of 960 new BTO units are on offer, with 280 3-room units and 680 4-room units. The indicative price range of the 3-room units is $409,000 to $474,000, while the 4-room units is $582,000 to $688,000.
Before deciding to buy, we definitely want to be well-informed. To hopefully help in your assessment, we look at various facets of whether this PLH BTO launch is worth buying.
#1 Good Discount To Prices Of Flats Sold In The Vicinity
As mentioned, the PLH BTO will offer 3-room units at $409,000 to $474,000, while 4-room units are priced at $582,000 to $688,000.
According to the HDB announcement, transacted prices of resale flats in the vicinity are $490,000 to $555,000 for 3-room units, and $630,000 to $770,000 for 4-room units. This is about 17% to 20% discount for 3-room units, and 8% to 12% for the 4-room units.
| River Peaks I and River Peaks II PLH BTO Units In Rochor (Nov 2021 BTO launch) | Transacted prices of resale flats in the vicinity | Selling price of the BTO (excluding grants) | Discount We May Be Getting |
| 3-room units | $490,000 – $555,000 | $409,000 – $474,000 | 17% – 20% |
| 4-room units | $630,000 – $770,000 | $582,000 – $688,000 | 8% – 12% |
While the resale comparisons nearby are more expensive, they are also 19 to 21 years old. This makes River Peaks I and River Peaks II even more valuable with a fresh 99-year lease when owners get their keys.
Read Also: 6 Things To Know About River Peaks I & II In Rochor, The First PLH BTO
#2 Not As Good A Discount Compared To BTO Locations?
Compared to another somewhat good location during the November 2021 BTO launch, the Kent Heights development in Kallang/Whampoa offers a slightly better discount of between 14% to 23%.
Similarly, transacted prices of these 4-room BTO flats are also compared to units that are already 19 years old.
| Kent Heights BTO Units at Kallang/Whampoa (Nov 2021 BTO launch) | Transacted prices of resale flats in the vicinity | Selling price of the BTO (excluding grants) | Discount We May Be Getting |
| 4-room units | $630,000 – $754,000 | $511,000 – $660,000 | 14% – 23% |
We also checked the discount listed for units that were in a non-mature location. It looks like the discounts provided in this location was even more superior. Furthermore, the transacted prices are of units that are about 20 to 35 years old – making the discount even more attractive.
| Nanyang Opal BTO Units at Jurong West (Nov 2021 BTO launch) | Transacted prices of resale flats in the vicinity | Selling price of the BTO (excluding grants) | Discount We May Be Getting |
| 3-room units | $290,000 – $333,000 | $173,000 – $229,000 | 45% – 68% |
| 4-room units | $423,000 – $472,000 | $264,000 – $321,000 | 47% – 60% |
Of course, we also need to note that factors such as floor, unit facing, upkeep, the larger sizes of older HDB flats as well as many other factors all play a part in determining resale prices.
#3 Are 3-Room Rochor PLH BTO Units The Better Buy?
In the table above, we can also see that 3-room units in the Rochor PLH BTO are selling at a steeper discount to 4-room units.
We also went to the HDB Resale Flat Prices portal to check for ourselves. What we found was that in the past 12 months, only 3-room flats built between 1971 and 1986 were being sold. This could suggest that there is a limited supply of 3-room flats in the Central Area or a limited pool of buyers for such flats.
When we did the same checks for 4-room flats, there were newer development flats from Pinnacle@Duxton being sold, as well as from other newer developments built in 2002 and 2003 being transacted. Of course, there were also older flats being transacted.
#4 A Nearby Non-PLH BTO Coming Up In Feb 2022
The first BTO launch in 2022, in February 2022 will list another BTO in Kallang/Whampoa (the solid yellow plot in the map). This location is just a 7 minute’s walk away from Jalan Besar MRT station.
The PLH BTO in Rochor is circled in yellow in the map below.
There is some risk that buyers may be overpaying for a PLH BTO, considering all the restrictions that also come with it.
In the latest November 2021 BTO, another Kallang/Whampoa BTO is also on offer. However, this isn’t as close to the PLH BTO in Rochor. Nevertheless, it is priced at $511,000 to $660,000 – this is a price difference of 4% to 14%.
There have also been other Kallang/Whampoa BTO launches in good locations in the past, and we could expect similar launches in future – without the PLH restrictions.
| 4-Room Kallang/Whampoa BTOs | Selling price of the BTO (excluding grants) | Rochor PLH BTO |
| Kent Heights (Nov 2021 BTO) | $511,000 – $660,000 | $582,000 – $688,000 |
| Towner Residences (May 2021 BTO) | $500,000 – $656,000 | |
| McNair Heights (Feb 2021 BTO) | $532,000 – $672,000 |
There are also other premium locations that do not have such restrictions, for locations such as Bishan and Queenstown. Incidentally, there will be a Queenstown BTO coming up in May 2022.
#5 71-Months Wait For Rochor PLH BTO
While this doesn’t directly affect the price of the Rochor BTO, waiting for 6 years for our homes to be built may be a big ask for new and/or young couples. On the other hand, if we already have a home to live in for the next 6 years, while waiting this out, it could be a boon – for us to save up for the flat.
In comparison to the other BTO flats during November 2021, it is the longest by far. Waiting for such a long time, if we do not have an existing home could put a strain on our finances if we want to rent from the market or our personal lives if we want to start a family.
| Nov 2021 BTO launch | Estimated Waiting Time |
| Rochor PLH BTO
(River Peaks I and River Peaks II) |
71 months
(nearly 6 years) |
| Kallang/Whampoa BTO
(Kent Heights) |
54 months
(4.5 years) |
| Yew Tee BTO (Heart of Yew Tee) | 52 months
(less than 4.5 years) |
| Hougang BTO
(Tanjong Tree Residences @ Hougang & Hougang Olive) |
47 months and 33 months
(less than 4 years and less than 3 years) |
| Jurong West BTO (Nanyang Opal) | 42 months
(3.5 years) |
| Tengah BTO
(Parc Clover @ Tengah & Parc Glen @ Tengah)
|
30 and 29 months
(2.5 years and under 2.5 years) |
#6 Cap On Income Ceiling For Resale Buyers
When we eventually want to sell our PLH BTO in future – regardless of whether it is this Rochor PLH BTO or not – the buyer must meet the prevailing wage ceiling.
While we can expect the wage ceiling to increase in future, the current wage ceiling is $14,000. Based on a 30% MSR, and without paying any Cash Over Valuation (COV), a buyer would be able to purchase the home for about $1.1 million.
This perhaps acts as a cap on the prices.
Read Also: What Is The Mortgage Servicing Ratio (MSR) When You Buy A HDB Or Executive Condo (EC) Flat
#7 Other PLH Restrictions
We’ve covered this portion in another article, but it’s still quite relevant to the discussion about whether buying the PLH BTO is the right financial move.
Here are the other restrictions we need to consider:
- Subsidy recovery of 6%. While the subsidy recovery is applied on all PLH BTO, the 6% figure will be locked in for the Rochor PLH BTO. Without any past information (since this is the first PLH BTO) to compare to, this could be a good or bad thing – which isn’t great when trying to make a financial decision. When we sell the Rochor PLH BTO, we need to return 6%.
- Minimum Occupation Period (MOP) of 10 years. We already have to wait about 6 years for this home to be built. The we have to wait another 10 years to be able to sell it. If we’re trying to realise capital gains – it could be a long, long wait. This 10-year MOP applies to subsequent buyers as well, so it could affect resale prices.
- Cannot rent out PLH BTO flats. We can usually rent out the entire HDB flat after hitting the MOP. However, we cannot do so for PLH BTOs, including the Rochor PLH BTO. However, we can rent out spare bedrooms.
- When selling the PLH BTO in the future, buyers must have at least one Singapore Citizen applicant, must have family nucleus (which means singles cannot buy it), must not own or have an interest in a private property for 30 months
Read the article below for more information on the restrictions.
Great Location – But Potentially A Gamble For Price Appreciation
The Rochor PLH BTO is no doubt a great location to live in. It’s right next to Jalan Besar MRT station – putting it on par with an integrated development. The location is also within walking distance to Sim Lim Tower and Bugis Junction, which is unbeatable.
However, if we’re going in thinking this is a sure-bet for price appreciation. We may be shouldering some risks, even if it turns out to be true. There are many unknowns with this being the first PLH BTO.
As we’ve covered, there are also other premium HDB developments in Kallang/Whampoa, Bishan and Queenstown that do not have PLH BTO restrictions. These have appreciated in price. Similarly, the only other young HDB flat, Pinnacle@Duxton, has been a lottery ticket for initial buyers, but this may not be replicated via the PLH BTO projects given various restrictions.
Read Also: Is It worth Paying A Premium To Buy A Condominium Unit In An Integrated Development
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