Some HDB flat sellers use new public housing model to push up asking prices

SINGAPORE: Some Housing and Development Board (HDB) flat sellers are capitalising on a new public housing model to push asking prices up by several thousands of dollars.

The prices for flats located near MRT stations or town centres are now higher by up to S$10,000 (US$7,300) compared to before, according to industry insiders.

Property agents are marketing these homes as being in potentially Plus classified locations, using the recently introduced term for projects that are close to amenities like transport nodes.

They are pitching that it would be better to get a resale home in these areas now, as their value may increase when details of Plus model Build-to-Order (BTO) flat locations are announced.

Buying a resale flat in these areas instead of a BTO will also free them from the restrictions like a minimum occupation period of 10 years that will come with the launch of the Plus flat types from the second half of 2024. 

“Sellers who are trying to sell their standard flats that are currently near the upcoming BTO (flats) that could possibly become Plus classified housing - those sellers are finding their flats a bit (more) valuable overnight,” said real estate agent Tay Jooann.

“They are trying to perhaps take a bit longer for the right price to come along or perhaps take a step to increase their price a little more to include that value into the price.”

Some agents marketing homes in these areas have also been advising their clients to wait for a better offer.

HOW WILL RESALE PRICES BE AFFECTED?

There have been hints that Bayshore, a new housing estate where two new BTO projects will be launched next year, could house Plus flats. However, HDB has yet to lay out exactly where these Plus flats will be located. 

Ms Tay noted that resale flats in possible Plus locations like Bishan have been going up in the past one to two years, even before the announcement on the new classification.

“People are still considering good connectivity resale HDB (flats) versus the rest of the other basket of choices they have,” she said. 

When BTO flats are launched in Prime locations - a classification that was started in 2021 to describe the choicest and most central locations - the prices of flats nearby go up “quite significantly”, Ms Tay said. 

The trend may hold when it comes to Plus model homes in the future, she said. 

Prime location homes include those in areas like Kallang/Whampoa, Queenstown and Bukit Merah. 

The resale prices in upcoming Plus classified locations will be affected by the supply of new BTO flats, said Ms Christine Sun, senior vice president of research and analytics at property firm OrangeTee & Tie.

How they are affected will depend on what type of flats the government will release under the Plus model, how many new flats will be released, and their price point, she noted.

“(If) they release a lot of supply in those areas, then we may potentially see a more adverse impact on the resale market in that location. So it means that, in that location, prices may tend to grow slower as well or stabilise or it may even fall in some locations,” she said.

SENSE OF URGENCY

For potential buyers like couple Marcus Lim and Tris Marlis, who are looking at the resale market after two years and six failed attempts at getting a new BTO flat in choice locations, there is a sense that they should buy a home in potential Plus locations as soon as possible so they will not get tangled up with resale restrictions. 

“We saw some listings … indicating that it's the last chance, giving some sort of urgency,” said Mr Lim, adding that selling agents have suggested that the price of the flat being viewed may increase when the new classification kicks in.

Mr Lim said that the explanation from the agents makes sense to him and that when a flat gets several other viewings, it adds to the sense of urgency.

The couple, who is looking for a four- or five-room flat the size of about 1,100 to 1,200 sq ft in the central area, said that there are other reasons they want to buy their home quickly.

“The supply is limited in the areas that we are looking at. So we also don't want to miss out on our dream home,” said Ms Marlis.