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16-02-22, 11:15
Top 10 HDB BTO projects with the highest gains upon MOP
EdgeProp Singapore
February 15, 2022
SINGAPORE (EDGEPROP) - Build-To-Order (BTO) flats from HDB are generally regarded as entry-level homes for most Singaporeans looking to purchase their first home. For married couples and families to singles who have turned 35 years old, BTO flats come with several government housing grants and are usually priced below resale HDB flats or other residential alternatives within the same area.
While a BTO flat is the first home for the majority of Singaporeans, it’s not their only home. One in six BTO flats changed hands upon achieving their minimum occupancy period (MOP) in 2016.
In this article, EdgeProp Singapore addresses a question that many home buyers have: Which BTO flats netted the highest gains in percentage terms upon reaching their MOP?
Using the HDB BTO tool and Squarefoot’s HDB transactions tool, we pulled out a list of transactions from 2017 to 2021 for all four- and fiveroom BTO flats that were sold upon their MOP.
During the period, there were a total of 170 BTO projects that achieved their MOP. Surprisingly, the flats that netted the highest gains in percentage terms were not the flats that were sold for a million dollars or more.
The top 10 gainers were estates located in the Outside Central Region (OCR) or suburbs, such as Sengkang in the northeast region, Sembawang in the north and Choa Chu Kang in the northwest.
“There are currently three major economic gateways built in the east, west and north of Singapore that have heightened the desirability of flats in these areas,” says Christine Sun, OrangeTee & Tie senior vice president of research and analytics. “The transformational works usually involve the addition of new offices, housing units, amenities and recreational facilities, and enhancement of transportation networks, which will create new housing demand and enhance the investment value of properties in these locations. There are many developmental plans for the northern and north-eastern regions.”
Furthermore, Sun points to flats in the Dawson area in the city-fringe (Rest of Central Region or RCR) in Queenstown, which have seen “healthy profits” due to their rarity and proximity to the CBD. Many of these flats have also achieved selling prices above $1 million at MOP, she notes.
Four-room flats in Skyville@Dawson on Dawson Road achieved an average gain of 75.3% upon their MOP in 2020. Five-room flats in Skyville@ Dawson saw average gains of 63% in 2020, with the highest price at $1.01 million upon MOP.
Other HDB areas that have achieved high profits include Choa Chu Kang and Woodlands in the northern region, both in the OCR. Sun attributes the high profits to the lower entry price of the BTO flats at launch.
The property cooling measures announced last December, which included a cut in the loan-to-value ratio of HDB loans from 90% to 85%, are likely to have a “limited impact” on HDB flat prices at MOP, she notes. “Not everyone takes the maximum HDB loan amount, while others prefer to borrow from the banks,” says Sun.
Similarly, Nicholas Mak, head of research and consultancy at ERA Realty Network, notes that BTO flats that were sold at higher prices are usually those in the RCR and within the central area. “Some buyers are willing to pay higher prices for these flats due to their proximity to the city centre and possibly MRT stations,” he shares.
However, due to the higher entry prices of BTO flats in the RCR given their location, the percentage gains enjoyed may not be as high as those who had purchased BTO flats in the OCR and in non-mature estates.
“The new HDB flats that were located further away from the city centre, such as Choa Chu Kang, Bukit Batok and Sembawang, enjoyed comparatively higher price gains in percentage terms upon the end of the flats’ five-year MOP, mainly because some of these flats were sold at relatively low prices by the government to attract households to locate to these non-mature towns,” says Mak.
This further illustrates that early buyers in new estates that are considered less accessible could potentially enjoy higher future capital gains in the resale market when the neighbourhood matures, notes Mak. “Over time, as more amenities and infrastructure are built, the population would expand, and the area would become more desirable. With greater demand, this would contribute to the price growth of these flats.”
The latest property cooling measures are unlikely to dampen demand nor cause prices to contract in the HDB market, Mak adds. “As long as the construction of BTO flats is delayed by the global supply chain disruptions, and the Singapore economy does not suffer a recession, the prices of HDB resale flats are unlikely to contract this year.”
Based on the 4Q2021 HDB flash estimate, the overall HDB resale price index rose 12.5% for the whole of 2021. This year, the pace of growth in the HDB resale price index is expected to moderate due to the greater supply of BTO flats. He is projecting HDB resale transactions to ring in at about 25,000 to 28,000 this year.
Here are the top 10 HDB neighbourhoods where BTO (Build-To-Order) flats saw the highest gains upon obtaining TOP (temporary occupation permit) from 2017 to 2021:
https://i.imgur.com/Kk87Uap.jpg
Read more at: https://www.edgeprop.sg/property-news/top-10-hdb-bto-projects-highest-gains-upon-mop
EdgeProp Singapore
February 15, 2022
SINGAPORE (EDGEPROP) - Build-To-Order (BTO) flats from HDB are generally regarded as entry-level homes for most Singaporeans looking to purchase their first home. For married couples and families to singles who have turned 35 years old, BTO flats come with several government housing grants and are usually priced below resale HDB flats or other residential alternatives within the same area.
While a BTO flat is the first home for the majority of Singaporeans, it’s not their only home. One in six BTO flats changed hands upon achieving their minimum occupancy period (MOP) in 2016.
In this article, EdgeProp Singapore addresses a question that many home buyers have: Which BTO flats netted the highest gains in percentage terms upon reaching their MOP?
Using the HDB BTO tool and Squarefoot’s HDB transactions tool, we pulled out a list of transactions from 2017 to 2021 for all four- and fiveroom BTO flats that were sold upon their MOP.
During the period, there were a total of 170 BTO projects that achieved their MOP. Surprisingly, the flats that netted the highest gains in percentage terms were not the flats that were sold for a million dollars or more.
The top 10 gainers were estates located in the Outside Central Region (OCR) or suburbs, such as Sengkang in the northeast region, Sembawang in the north and Choa Chu Kang in the northwest.
“There are currently three major economic gateways built in the east, west and north of Singapore that have heightened the desirability of flats in these areas,” says Christine Sun, OrangeTee & Tie senior vice president of research and analytics. “The transformational works usually involve the addition of new offices, housing units, amenities and recreational facilities, and enhancement of transportation networks, which will create new housing demand and enhance the investment value of properties in these locations. There are many developmental plans for the northern and north-eastern regions.”
Furthermore, Sun points to flats in the Dawson area in the city-fringe (Rest of Central Region or RCR) in Queenstown, which have seen “healthy profits” due to their rarity and proximity to the CBD. Many of these flats have also achieved selling prices above $1 million at MOP, she notes.
Four-room flats in Skyville@Dawson on Dawson Road achieved an average gain of 75.3% upon their MOP in 2020. Five-room flats in Skyville@ Dawson saw average gains of 63% in 2020, with the highest price at $1.01 million upon MOP.
Other HDB areas that have achieved high profits include Choa Chu Kang and Woodlands in the northern region, both in the OCR. Sun attributes the high profits to the lower entry price of the BTO flats at launch.
The property cooling measures announced last December, which included a cut in the loan-to-value ratio of HDB loans from 90% to 85%, are likely to have a “limited impact” on HDB flat prices at MOP, she notes. “Not everyone takes the maximum HDB loan amount, while others prefer to borrow from the banks,” says Sun.
Similarly, Nicholas Mak, head of research and consultancy at ERA Realty Network, notes that BTO flats that were sold at higher prices are usually those in the RCR and within the central area. “Some buyers are willing to pay higher prices for these flats due to their proximity to the city centre and possibly MRT stations,” he shares.
However, due to the higher entry prices of BTO flats in the RCR given their location, the percentage gains enjoyed may not be as high as those who had purchased BTO flats in the OCR and in non-mature estates.
“The new HDB flats that were located further away from the city centre, such as Choa Chu Kang, Bukit Batok and Sembawang, enjoyed comparatively higher price gains in percentage terms upon the end of the flats’ five-year MOP, mainly because some of these flats were sold at relatively low prices by the government to attract households to locate to these non-mature towns,” says Mak.
This further illustrates that early buyers in new estates that are considered less accessible could potentially enjoy higher future capital gains in the resale market when the neighbourhood matures, notes Mak. “Over time, as more amenities and infrastructure are built, the population would expand, and the area would become more desirable. With greater demand, this would contribute to the price growth of these flats.”
The latest property cooling measures are unlikely to dampen demand nor cause prices to contract in the HDB market, Mak adds. “As long as the construction of BTO flats is delayed by the global supply chain disruptions, and the Singapore economy does not suffer a recession, the prices of HDB resale flats are unlikely to contract this year.”
Based on the 4Q2021 HDB flash estimate, the overall HDB resale price index rose 12.5% for the whole of 2021. This year, the pace of growth in the HDB resale price index is expected to moderate due to the greater supply of BTO flats. He is projecting HDB resale transactions to ring in at about 25,000 to 28,000 this year.
Here are the top 10 HDB neighbourhoods where BTO (Build-To-Order) flats saw the highest gains upon obtaining TOP (temporary occupation permit) from 2017 to 2021:
https://i.imgur.com/Kk87Uap.jpg
Read more at: https://www.edgeprop.sg/property-news/top-10-hdb-bto-projects-highest-gains-upon-mop