Huttons’ comments on HDB Nov 2021’s BTO exercise

Looking at the price of Rochor flats, they are priced very similar to the BTO flats at Kallang. HDB has already adjusted the prices to take into account the additional subsidies but they did not want to reveal the actual subsidy. The PLH 4-room flats are also smaller than the usual 90 sq m.

The BTO exercise at Telok Blangah in May 2021 starts from $602,000 for a 4-room flat. The Rochor 4-room flats are priced from $582,000 which is $20,000 lower. The additional subsidies may be more than $20,000 if we account for time, differences in location and smaller flat size.

It is difficult to say whether the clawback subsidy is fair since there is no precedent. We did a simple comparison on what buyers might have to pay back to HDB when they sell 16 years (construction period 71 months and 10 years MOP) down the road.

If the future selling price for a 4-room flat is $1 million, with a clawback subsidy of 6%, sellers will have to pay back $60,000 to HDB. This amount appears to be almost similar to the additional subsidy HDB is giving upfront to buyers.

Nevertheless we expect good response to the Rochor PLH flats. The higher price, smaller flat size and clawback subsidy are not likely to deter buyers. Application rate may range from 4 to 6 similar to past BTO exercises.

The Tengah flats may have potential in the future. Centralised cooling systems, greenery and smart solutions may mean the homes are designed for the future. Furthermore they are closer to MRT station.

The Yew Tee flats for seniors may see popular demand. It is integrated with healthcare services like a polyclinic and kidney dialysis centre. The community club and hawker centre are all integrated. Its location right next to a MRT station means elderly do not need to walk far or take a bus to a train station. The whole development is designed with accessibility in mind for seniors.