Despite 14% subsidy clawback, a S$788,000 Berlayar BTO flat is a solid buy

Despite 14% subsidy clawback, a S$788,000 Berlayar BTO flat is a solid buy

The desirable estate will be a good ‘forever home’, and also has potential to generate robust capital gains and rental income

Leslie Yee

Oct 27, 2025

https://www.businesstimes.com.sg/opi...flat-solid-buy

The highest price tag for a four-room flat in the Housing & Development Board’s (HDB) recent Build-To-Order (BTO) sales exercise was for a unit at Berlayar Residences on the former Keppel Club site.

Berlayar Residences will have 880 units of two-room flexi, three and four-room flats on a site between Telok Blangah and Labrador Park MRT stations. The indicative price range for the 468 four-room units excluding grants was between S$578,000 and S$788,000.

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For the 1,078 four-room flats at Berlayar Residences and Redhill Peaks – both Prime projects in Bukit Merah, the application rate among first-timer families was 3.1 times.

The application rate among first-timer families for four-room flats of 3.1 to 3.5 times for Prime projects exceeded that of 1.7 to 2.5 times for Standard projects in October’s BTO exercise.

The catch for those who snare a unit at Berlayar Residences is that this project comes with the highest subsidy clawback rate of 14 per cent to date.

New HDB Plus and Prime flats, which command higher market values due to their stronger locational attributes, receive additional subsidies to ensure that they remain affordable for a wider group of homebuyers.

To maintain fairness for all BTO flat owners, Plus and Prime units come with more restrictions versus Standard flats, including a subsidy recovery upon resale. Upon selling the flat, post the 10-year minimum occupation period (MOP), owners of Plus and Prime flats have to pay HDB a percentage of the home’s resale or valuation price, whichever is higher.

Notwithstanding the high subsidy recovery rate, securing a four-room BTO flat at Berlayar Residences, especially a choice unit, is a great buy.

Attractive home

One, Berlayar Residences, which is the first BTO project in Berlayar estate, has the attributes to be among the most desirable public housing flats islandwide.

Berlayar estate is part of the Greater Southern Waterfront, a new major gateway for urban living spanning 30 km of Singapore’s southern coastline from Pasir Panjang to Marina East.

Residents of Berlayar estate will enjoy easy access to the Southern Ridges and Labrador Nature Reserve as well as a convenient commute to the Central Business District (CBD).

The estate will boast abundant green spaces. Up to 20 per cent of the estate is dedicated to parks and open spaces with four green corridors weaving through it, and the estate is being developed with sustainable design strategies.

Those living in Berlayar Residences’ high-floor units can also expect to get panoramic views of Keppel Harbour or the city skyline.

In short, Berlayar Residences will offer a compelling proposition as the forever home for its occupants. Many flat owners could in turn be completely indifferent to the 10-year MOP or a high subsidy clawback rate, which applies only to those who sell their homes.

Sound investment

Two, despite a high subsidy clawback, those who get BTO flats at Berlayar Residences, especially choice units, will likely do well financially.

Certainly, restrictions applicable to Prime flats will temper the financial returns of owners who sell. Still, BTO Prime flat owners, in particular those who own good units in a super prime estate such as Berlayar estate, should enjoy robust returns.

The resale prices of comparable four-room flats, with remaining land leases of about 92 years, near Berlayar Residences were in the range of S$848,000 to S$1.13 million.

Assuming the mark-to-market price of the S$788,000 BTO unit at Berlayar Residences is S$1.13 million, the homeowner’s immediate paper gain is about S$184,000, after accounting for the 14 per cent subsidy clawback but excluding transaction cost.

Very likely, the gain should easily exceed S$184,000 as the Berlayar Residences unit is newer and a choice home in Berlayar estate might fetch a large premium over nearby comparables, given the strong and differentiated attributes of said flats.

Sure, the pool of eligible buyers of resale Prime flats is more limited. Permanent resident (PR) couples cannot buy a resale Prime flat. Also, couples buying a resale Prime flat need to meet the monthly household income ceiling of S$14,000.

Nevertheless, applying an income ceiling to buyers of resale Prime flats may not crimp buying power for such homes. In particular, the best units in a project such as Berlayar Residences could draw buyers with deep pockets.

Think of young local couples receiving parental financial assistance or local retirees recycling proceeds from selling a private home as being among buyers who can and will pay top dollar for the most sought-after resale Prime flats. Indeed, retirees trading private homes for HDB flats, thereby freeing up funds for retirement needs, can be a rich source of demand for the most desirable HDB resale flats.

Ultimately, a couple in their late 20s or early 30s who secure a good BTO unit at Berlayar Residences should be well-placed after 15 years to trade their HDB flat for a condo unit when they are in their mid-40s if they so desire. The estimated waiting time for Berlayar Residences is 56 months – almost five years.

Rental income

Three, while an owner cannot rent out an entire Plus or Prime flat after MOP, renting out spare rooms is allowed for three-room or bigger flats.

Driven by affordability considerations, many workers and students rent rooms in HDB flats. Berlayar estate’s choice location, not far from the CBD and institutes of higher learning, should be highly appealing to renters. This is especially as occupants will enjoy plenty of greenery.

Thus, an eligible owner of a flat at Berlayar Residences can look forward to drawing strong rental demand when renting out a room to earn recurrent income.

The use of the Standard, Plus and Prime framework for HDB BTO projects since October 2024 helps reduce the lottery effect where a lucky few who managed to get BTO homes in the choicest locations make a financial bonanza.

Still, those able to own a home in the Greater Southern Waterfront at a subsidised price are big winners – they get a great home and investment.