Living in Singapore’s city centre brings about greater convenience and accessibility to major employment nodes and other amenities. A housing address in these prime areas is also perceived to be more prestigious compared to the far-flung neighbourhood regions located Outside Central Region (OCR), which further adds to the lure of such prime housing.
To curb the rising trend of resale HDB flats transacting for over a million dollars in these areas, the new Prime Location Public Housing (PLH) model was introduced in October 2021. The PLH model helps to keep new public housing that is built in such prime locations such as the city centre and the Greater Southern Waterfront affordable, accessible, and inclusive for Singaporeans.
These PLH flats, along with other BTO flats in mature towns, will have a higher (at least 95%) allocation of public flat supply to first-timers (FT) families compared to BTO flats in non-mature towns (70% for 3-room and 85% for 4-and-5-room).
This higher flat allocation ratio and lower pricing may seem enticing, especially for young FT families considering a PLH flat. While there may be good reasons why you may want to apply for these PLH flats, here are a few reasons why you may not want to, given their unique characteristics.
#1 High Competition For PLH Flats Means Lower Chances Of Securing A Unit In The BTO Exercise
The first PLH development, River Peaks I and II, was launched at Rocher in the November 2021 BTO sales exercise. It received a total of 6,976 applications, or 10.3 applications per flat for the 680 units (4-room flat types). And a further 867 applications were received for the remaining 280 units (3-room flat types).
This was dwarfed by the overall 13.3 application rate for the second PLH development, King Geroge’s Height at the Kallang/Whampoa town, which was launched in the February 2022 sales exercise. A total of 5,305 applications were received for the 398 available units, consisting of both 3-and-4-room flat types.
The demand for PLH flats has remained strong over the past sales exercises and may continue with future developments. As first-timer (FT) families can only submit one application for one location and one flat type during each sales launch, such strong competition limits your chances of securing a unit in the sales exercise.
If you wish to secure a new flat as soon as possible, then it may be better to avoid applying for PLH flats. Otherwise, it is really a game of chance (with very limited odds).
Read Also: Rochor BTO Price Analysis: Is It Worth Buying Singapore’s First PLH Model?
#2 Longer Construction Period (i.e Waiting Time) For PLH Flats Compared To Other BTO Projects
The 2020 global coronavirus-induced pandemic measures, which restricted the movement of people and limited construction supplies, led to major delays in the construction of BTO flats. According to National Development Minister Desmond Lee, there are still over 58 projects delayed by six months or longer as of April this year. While Minister Lee mentioned that the median waiting time for future BTO projects over the next two years could likely be between 4 and 4.5 years, the wait for PLH projects, on the other hand, is slightly longer.
For the May 2022 BTO sales exercise, both the PLH developments, Bukit Merah Ridge and Ghim Moh Ascent, have a much longer completion time compared to the other BTO projects in the same launch.
| Location – Project Name | Estimated Completion Date | Estimated Waiting Time |
| Bukit Merah – Bukit Merah Ridge* | 1Q2028 | 60 months |
| Queenstown – Ghim Moh Ascent* | 1Q2028 | 60 months |
| Toa Payoh – Kim Keat Heights | 3Q2027 | 55 months |
| Jurong West – Lakeside View | 4Q2026 | 46 months |
| Yishun – Yishun Beacon | 2Q2026 | 39 months |
(*PLH Developments) Source: HDB
As a FT applicant, you may need to wait as long as 5 years for the construction of a PLH flat. If your intention is to move-in to a flat as soon as possible, then a PLH development may not suit your needs.
Read Also: BTO Vs Resale: Which Should You Choose?
#3 Smaller Flat Types And Unit Sizes For PLH Developments Compared To Other BTO Developments
Given the limited space of prime area land, it is common for developments in mature towns to consist of no bigger than 4-room flat types. This trend is consistent with the past four PLH developments (River Peaks I and II, King George’s Heights, Bukit Merah Ridge, and Ghim Moh Ascent). These developments consist of only the 3-room and 4-room flat types.
FT families, who may wish to stay as a multi-generational family with their parents or have plans to grow their family size in the future (i.e. have more children), may find these smaller flat types unconducive for family planning.
Furthermore, based on the May 2022 sales exercise, the flat types in the two PLH developments are sized slightly smaller than other BTO flats. For example, the total estimated floor size for 3-room and 4-room flat types in the PLH developments is around 66 sqm and 89 sqm, respectively. On the other hand, the flat sizes of other BTO developments (including mature and non-mature town) are around 68 to 69 sqm and 93 sqm, respectively.
| Project | Estimated Floor Area (sqm) | |
| 3-Room Flat Types | 4-Room Flat Types | |
| Bukit Merah Ridge | 66 | 89 |
| Ghim Moh Ascent | 66 | 89 |
| Kim Keat Heights | 69 | 93 |
| Lakeside View | 68 | 93 |
| Yishun Beacon | – | 93 |
Source: HDB
Hence, as a young FT buyer of a PLH development, you need to bear in mind the trade-offs in the flat types and unit-sizes for a more convenient location.
Read Also: Here’s Why It Makes Sense To Take The Maximum HDB Home Loan You Can When Buying Your First Flat
#4 Longer Minimum Occupation Period (10-Year) For PLH Developments
One of the distinctions between a PLH development and a BTO development is the Minimum Occupation Period (MOP) that flat buyers need to serve. For PLH developments, the MOP is 10 years, while flat buyers of BTO developments only need to serve 5 years.
This could pose a few constraints on potential flat buyers of PLH developments.
One, the longer MOP means it would be difficult to cash out the property should the situation require it. For example, a young FT couple may find it difficult to sell or upgrade to a bigger flat to accommodate their growing family within the 10-year MOP, which excludes the construction time.
Two, flat owners are also not allowed to cash-in on their PLH flat by renting out the whole flat after the MOP, which is allowed for BTO developments. So, if you had the intention of renting out your whole HDB flat by holding it under one spouse’s name and purchasing a private residential flat under the other spouse’s name after the MOP to stay in, then the PLH model flat may not be suitable.
These reasons are why PLH model developments are less viable as an investment vehicle than the BTO model developments. Therefore, as a young FT couple, you may need to think long-term when considering a PLH development. Otherwise, you could find yourself stuck with limited options.
Read Also: Is It Worth Renting And Waiting For Your BTO Or Paying The Higher Prices For A Resale Flat Now?
#5 PLH Developments Maybe Less Profitable Than BTO Developments When Selling After MOP
On top of the housing grants that are also given to BTO buyers, PLH developments come with additional subsidies on them to make them relatively more affordable to buyers. While PLH developments may initially be priced more attractively than BTO developments, these additional subsidies will be clawed back upon the resale of the flat.
PLH flat owners will have to pay a percentage of the resale price or valuation (which has been set at 6% as per the previous PLH model flats – River Peaks I and II, King George’s Heights), whichever is higher, when they sell their unit.
Future PLH resale buyers will also need to fulfill the same prevailing BTO eligibility conditions, such as (1) a household to have at least one Singapore Citizen applicant and one Singapore Permanent Resident (SPR); (2) must form an eligible family nucleus; (3) household income should not exceed $14,000 or $21,000 if purchasing with an extended/multi-generation family; (4) must not own or have an interest in a private property and have not disposed of any in the last 30 months. All of these conditions will apply to all subsequent buyers of resale PLH flats for around half of the 99-year lease before a review by MND and HDB.
What this means for current PLH buyers is that their pool of buyers would be different than those that are capable of purchasing resale (BTO model) flats that have an asking price of over a million dollars in the same mature towns.
For the PLH model, the future resale flat buyers would be similar to a BTO applicant. Unlike the pool of buyers of resale BTO model flats, which could consist of two SPRs or buyers with higher income levels than the threshold limited by HDB, or may even be “cash-rich” private en bloc beneficiaries. This difference in the pool of buyers may limit the future potential for PLH model flats to transact at high prices.
Coupled with the subsidy clawback, FT couples of PLH flats will also need to pay a resale levy if they purchase another subsidised flat from HDB. These two costs may lower the potential for profits for PLH model flats compared to BTO flats. As a result, it is unfavourable for a young FT couple who may have future plans to upgrade to another BTO or a private residential development.
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