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What The October 2024 BTO Sales Launch Reveals About The Future Of Housing Estate Classifications

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Since 1992, and up until the October 2024 BTO launch, HDB estates were categorised as either mature or non-mature estates. Interestingly, HDB has never clearly explained how it determines whether an estate is mature or non-mature. For some, this classification may seem puzzling. Non-mature estates like Jurong, Punggol, and Woodlands are well-equipped with amenities, while some mature estates, such as Tampines and Pasir Ris, are sometimes seen as less ideal even though they are classified as non-mature estates due to their distance from the city center.

To address this, a new classification framework – Standard, Plus and Prime – was introduced during the 2023 National Day Rally. This new system replaces the previous mature/non-mature classification. It is more relevant today, as, apart from Tengah, it’s difficult to argue that any other estate in Singapore is truly ‘non-mature.’

The October 2024 BTO launch is the first sales exercise to use this new classification system. With 15 projects spread across 9 housing estates, we can glean valuable insights into how HDB currently views Singapore’s housing estates based on the way they have categorised the flats in this launch.

Proximity To The City Centre Is Key To Classification

In the October 2024 BTO Launch, two Pasir Ris projects, Costa Riviera I & II, were classified as Standard projects.

While this may seem unsurprising initially, it’s worth noting that Costa Riviera I and II are right next to the Pasir Ris MRT Station and bus interchange. This prime location already includes two shopping malls—White Sands (a familiar spot for army personnel heading to Tekong) and the recently opened Pasir Ris Mall. Additionally, Pasir Ris Park is adjacent to the development, meaning some units will enjoy a stunning sea view.

As a homeowner seeking a location with comprehensive amenities (sports facilities, dining, leisure, and transport) and access to nature—all within a five-minute walk—you would be hard-pressed to find a better housing option in Singapore than Costa Riviera I & II.

Yet, despite offering the best of both worlds, this project is classified only as ‘Standard.’ The likely reason for this is its distance from the city center.

This contrast can be observed by comparing it to Kembangan Wave, which is classified as a Bedok project. Located beside Kembangan MRT, this area lacks its own shopping mall. Regarding amenities and natural surroundings, the Kembangan BTO project arguably falls short of what Pasir Ris offers. However, because Kembangan is a few stops closer to the city center, it qualifies as a Plus project.

Within The Same Housing Estate, Connectivity & Amenities Also Matter

Specific locational attributes can make a significant difference even within the same housing estate. Take Bedok, for instance. In the October 2024 BTO launch, this estate offers three locations.

Two of these projects, Bayshore Vista and Bayshore Palms, are located on Bayshore Drive, close to Bayshore MRT Station. Securing a unit here could mean enjoying an unblocked sea view. However, as a relatively new area, it currently lacks standout amenities. These projects are classified as Plus projects, with a Subsidy Recovery rate of 7%.

As previously mentioned, the third project in Bedok, Kembangan Wave, is adjacent to Kembangan MRT. Although it is also classified as a Plus project, its Subsidy Recovery rate is slightly lower, at 6%.

While this difference is only a percentage point, HDB considers various locational factors that enhance a project’s appeal. As explained by HDB in a media release, “while Kembangan Wave, Bayshore Vista, and Bayshore Palms are in Bedok, the latter two projects in the new housing area of Bayshore are more favourably located near East Coast Park and a proposed sports and recreation facility. As their more favourable locations command higher market values, higher additional subsidies are required to lower their flat prices so that they are more affordable to a wider range of Singaporeans. Hence, compared with Kembangan Wave where the subsidy recovery percentage is 6%, a higher subsidy recovery percentage of 7% for Bayshore Vista and Bayshore Palms will be imposed to be commensurate with the higher level of additional subsidies for both projects.”

Source: HDB

Could Prime Flat Be A Better Deal Than Plus Flats?

Prime and Plus flats have greater restrictions on selling. The Minimum Occupation Period (MOP) is 10 years instead of the standard 5 years, and renting out the whole flat is not allowed even after the MOP. There are also tighter resale conditions for Prime and Plus flats.

Source: HDB

The primary distinction between Prime and Plus flats lies in the Subsidy Recovery rate, with Prime flats generally having a higher rate. But what does this difference look like?

To illustrate, let’s compare two projects within the Kallang/Whampoa estate. First, Crawford Heights is a Prime project near Lavender and Nicoll Highway MRT stations. Depending on the unit’s orientation, residents may enjoy scenic views of Marina Reservoir, Rochor Canal, or Kallang River. Drivers benefit from proximity to the city center and easy access to the ECP. This project carries a 9% Subsidy Recovery rate.

On the other hand, there’s Towner Breeze, a Plus project near Boon Keng MRT station. Here, residents may overlook the Sungei Whampoa River, and the Subsidy Recovery rate is set at 8%.

Although both are classified within Kallang/Whampoa, these projects are approximately 4 km apart and offer different locational advantages. With its prime positioning, Crawford Heights commands a 9% Subsidy Recovery, highlighting its status as a ‘better’ location.

Pricing also reflects these differences. At Crawford Heights, a 4-room flat may cost up to $759,000, while at Towner Breeze, the maximum price is around $727,000—a difference of about $32,000, with a 1% lower Subsidy Recovery.

The question then becomes: does this slight reduction in price and Subsidy Recovery sufficiently offset the superior location offered by Crawford Heights? Remember, both Prime and Plus flats will face similar restrictions when it comes to selling. Ultimately, it’s likely that the selling price of these flats in the open market upon MOP will be based on units in the vicinity.

This question is one that buyers should carefully consider. Under the previous classification system, it’s possible that projects like Towner Breeze, Kembangan Wave (next to Kembangan MRT) and Bayshore Vista and Bayshore Palms (near Bayshore MRT) would have likely just been regular, non-prime flats because while they are located in desirable areas, they do not fully meet the criteria for Prime flats. However, with the new classification system, these projects now face the restrictions associated with Prime flats without fully embodying the ‘Prime’ status themselves.

Read Also: Standard, Plus & Prime Flats: Guide To Understanding The New Framework For HDB Flats

Top Image Credit: HDB

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