Let's Talk About the Prime Location Public Housing (PLH) Model

The government announced the highly anticipated Prime Location Public Housing (PLH) model on 27 October. It is the first of its kind for Singapore’s public housing model, altering the Minimum Occupation Period (MOP) alongside resale restrictions.

This is something that the government had been pondering over for a while now, stemming from concerns of the lottery nature of balloting and rising prices.

Feedback was received from the public as well as real estate professionals over 10 months.

HDB has developed these measures with a long-term goal in mind – keeping an HDB flat affordable, accessible and inclusive for Singaporeans.

Key facts on the PLH model

Source: Ohmyhome Research, HDB

The PLH model will be introduced for selected public housing projects in the prime and central locations, such as the city centre and surrounding areas, including the Greater Southern Waterfront.

These new measures focus on the new housing model for public flats in prime areas. Future owners of these Build-to-Order (BTO) flats will be subjected to a 10-year minimum occupation period (MOP) as compared to the usual 5-year period for new flats.

Tougher rental conditions have also been put in place for PLH flat owners and they will not be allowed to rent out their entire flat. These conditions will be applicable to both first-time home buyers and all subsequent buyers on the resale market. Resale buyers of these prime HDB flats will also be limited to households who earn not more than $14,000 a month, and at least one applicant must be a Singapore citizen.

Additionally, limited flats will be set aside under HDB’s Married Child Priority Scheme, which gives priority to applicants whose parents or children live in the same area. Currently, up to 30% of new flats are set aside under this scheme for families buying a flat for the first time.

The first BTO project that will be subjected to the new PLH rules will be located in Rochor and will be launched this month.

Ohmyhome Note: These PLH measures only apply to future housing projects and not retrospectively to existing public housing.

Outlook: Will the PLH model lead to a domino effect?

With the implementation of the PLH model only applicable for future HDB projects and not retrospectively to existing public housing flats, it remains to be seen if these new measures will have any direct impact on the resale market.

But as more HDB flats are built in the prime areas in the future, we could see prices acclimatize for existing and newer flats in the long run. With an estimated 25,583 HDB resale transactions so far in 2021, we estimate that the overall HDB resale volume for the year could reach up to 28,000.