NEW PLUS FLATS
The new Plus flats will be in “choicer locations” within each region, such as near MRT stations and town centres. One example is the upcoming Bayshore project near East Coast Park which is close to two MRT stations, a future shopping mall and Siglap Community Club.
They will have a 10-year minimum occupation period and Plus flat owners will have to return to HDB a portion of the resale price that is reflective of extra subsidies they receive, if they choose to sell the flat.
The longer minimum occupation period will favour buyers who are planning to stay there for the longer term, and discourage those who may be thinking of flipping the property and moving out as soon as they can, said Mr Lee.
“This will help mitigate windfall gains and ensure equity with other flat owners who do not enjoy these additional subsidies,” said MND and HDB.
Mr Lee said that developments like Central Weave in Ang Mo Kio posed a dilemma for HDB. The BTO project made headlines for its high prices ranging from S$713,000 to S$877,000 (US$525,000 to US$645,000) for the five-room and 3-Gen flats, before grants.
Even then, these flats were heavily discounted off their true market value, said Mr Lee. And despite the high price, they were heavily oversubscribed, with more than 17 applicants for every flat.
“If we price them higher, we will shrink the windfall gains and we will reduce the lottery effect. This will moderate demand … but there will be ‘sticker shock’ – these flats will become so expensive that they are unaffordable to most families,” said Mr Lee.
In addition, the precinct can become a “higher-income enclave” if only those near HDB’s income ceiling of S$14,000 can afford them.
“But if HDB prices such flats lower … we exacerbate the lottery effect, because the potential windfall gains will be even richer. Even more families will try for these flats,” said Mr Lee.