Estimated 11,000 flats will MOP this year
By Elizabeth Choong
/ EdgeProp Singapore |
Bidadari is expected to have approximately 10,000 new homes when fully developed. (Picture: HDB)
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SINGAPORE (EDGEPROP)- Approximately 11,000 Build-To-Order (BTO) flats have achieved their minimum occupation period (MOP) or will achieve MOP this year. The flats are spread across Singapore in a variety of towns, including Geylang, Hougang, Sembawang, Tampines, Yishun, Bukit Batok, Sengkang, Bedok, and Bidadari, thus providing a wide variety of options to prospective buyers.
In this article, we delve into Bidadari, which is expected to generate much interest from potential buyers. We examine the possible reasons for the town’s expected popularity and make price projections for the flats that just obtained MOP.
The popularity of BTO flats that just obtained MOP
All HDB flats come with a MOP of at least five years, meaning that the owner must reside in the flat for at least five years before they are allowed to sell it. Owners typically profit from selling BTO flats purchased directly from HDB, especially if the transaction is made shortly after fulfilling the MOP requirement.
Buyers are eager to acquire such flats because they are almost brand new and therefore have a longer remaining tenure. Additionally, newer flats and their common areas tend to experience less wear and tear, potentially resulting in fewer repairs and lower maintenance costs.
Since these flats are already constructed, they can fulfil the needs of buyers seeking immediate housing. In contrast to BTO flats that are still under construction, which have a construction period of three to five years, buyers can move into these flats almost immediately.
Furthermore, buyers of resale HDB flats have the flexibility to choose their ideal home from anywhere in Singapore, unlike BTO exercises, which typically feature only a few selected towns. Moreover, the featured town in BTO exercises may not align with the buyer’s preferred location. Consequently, some buyers opt for the resale market if they are adamant about the location of their home. Many parents, who are keen to enrol their child in a specific primary school, often move to a home within a 1km radius of the school to enhance their chances of admission.
The high subscription rate for each BTO exercise means that applicants need Lady Luck on their side to succeed. Therefore, some prospective buyers prefer the resale market, where success is less reliant on luck to secure a flat.
Everything you need to know about Bidadari
Bidadari garnered significant attention when the first flats were launched for application. This is because Bidadari was the newest HDB town when BTO flats in the town were first launched. Furthermore, it is centrally located near the mature town of Toa Payoh, thus allowing buyers to enjoy the long tenure of a brand-new flat, coupled with the numerous amenities in a well-established estate. Bidadari is expected to have approximately 10,000 new homes when fully developed.
Alkaff LakeView and Alkaff Vista are two HDB projects in Bidadari that were launched for application in November 2015. Both projects are expected to achieve MOP this year.
Both Bidadari projects are located within walking distance of a MRT station and within a 1km radius of several reputable schools. The surrounding amenities and central location of the projects suggest that they will likely be classified as Prime or Plus housing if they are part of a BTO exercise following the re-categorization of HDB flats, which will take effect from the second half of this year.
The owners of these almost brand-new completed flats in the two projects can be expected to increase their asking prices to take advantage of the fact that these flats will have a MOP of only five years. Plus and Prime flats will have a longer MOP of 10 years.
Alkaff Vista is expected to be more popular with larger families because it features five-room flats, unlike Alkaff LakeView, which comprises smaller flats. However, nature lovers are expected to prefer Alkaff LakeView because of its closer proximity to Bidadari Park and Alkaff Lake. Furthermore, Alkaff LakeView is within walking distance of Woodleigh MRT Station, which will be integrated with a bus interchange and a hawker centre, and slated for completion by the end of this year.
Checking out the competition
Due to its central location and popularity among buyers, many have likened the HDB flats in Bidadari to those in Pinnacle @ Duxton. The HDB project, located along Cantonment Road, has attracted a number of million-dollar transactions due to its close proximity to the CBD.
A deep dive into the resale volume for Pinnacle @ Duxton indicates that the number of resale transactions hit a record high of 124 flats in 2015 when the project just obtained MOP. A smaller peak was reached in 2021 with 114 transactions. Last year, there were only 48 transactions, and this year has seen three flats change hands thus far. However, the lower resale volume has not hindered the price growth for the development.
Source: EdgeProp Market Trends (as at 8 March 2024)
The average resale price for Pinnacle @ Duxton has surged by 39.4% since 2014 when the project first obtained MOP. The average price has since crossed the $1,000 psf threshold, growing from $974 psf in 2021 to $1,080 psf in 2022. Last year, the average price rose by 11.9% y-o-y to $1,208 psf before increasing further to $1,228 psf this year.
Comparisons between Bidadari and Punggol have been made because Punggol is another new town that was recently developed by HDB. The popularity and prices for HDB flats in Punggol have grown in tandem with the development of the town. Comparisons can also be made between Toa Payoh and Bidadari because of their close proximity. However, it should be noted that Toa Payoh is a well-established neighbourhood and hence has older flats.
Since 2014, the average prices for HDB flats in Punggol and Toa Payoh have increased by 44.8% and 34.1% respectively, higher than the growth of 31.5% for HDB flats islandwide. It is also noteworthy that the first resale transactions for HDB flats in Punggol took place in 2005 at $257 psf, but surged to $595 psf last year and $627 psf this year.
Last year, the average price for Punggol grew by 8.6% y-o-y, which was a stronger growth compared to the increase of 6% y-o-y for HDB flats islandwide. Toa Payoh managed to clock in a weaker growth of 4.8% y-o-y.
However, the weaker pace of growth did not stop Toa Payoh from having the highest average price of $676 psf at the time of writing. This is followed by Punggol ($627 psf) and islandwide ($580 psf). Furthermore, the average price for HDB flats in Toa Payoh has consistently trended above its counterparts in Punggol.
Source: EdgeProp Market Trends (as at 8 March 2024)
It is notable that the price gap of $47 psf between the average price for HDB flats in Punggol and islandwide is narrower than the price gap of $96 psf between Toa Payoh and islandwide. This could indicate that the average price for Punggol has a stronger correlation with the national average.
A key difference between the two towns is their location, which could have contributed to the difference in their average prices. Bidadari is located in the central region while Punggol is located in the north-east region.
The average price for HDB flats in the central region has consistently trended above the average price for their counterparts in the north-east region. Since 2014, the average price for HDB flats in the north-east and central regions has grown by 34.2% and 30.3%, respectively. Last year, the price for the north-east region rose by 6.9% y-o-y while the price for the central region increased by 5.2% y-o-y. At the time of writing, HDB flats in the north-east and central regions commanded average prices of $593 psf and $713 psf, respectively.
Source: EdgeProp Market Trends (as at 8 March 2024)
Expected prices for Bidadari flats
The HDB flats in Bidadari are expected to be in demand due to their excellent locational attributes. Furthermore, no BTO projects were launched in Toa Payoh or Bidadari last year or during the most recent BTO exercise in February. The upcoming BTO exercise in June is also not expected to feature the two towns. The lack of new flats in the two towns is expected to boost demand for the flats in Bidadari that have just obtained MOP.
Former owners of private residential property would have just completed their 15-month wait period if they sold their property just after the introduction of this regulation. Demand for Bidadari flats might come from this group of prospective buyers who should be able to pay top dollar for their replacement home with the sales proceeds of their previous home.
Driven by strong demand, the average resale price for the HDB flats in Bidadari is expected to fall between the average prices for Toa Payoh ($676 psf) and the central region ($713 psf). This is because there are greater similarities in terms of location and the variety of surrounding amenities with Toa Payoh and the central region compared to Punggol ($627 psf) and Pinnacle @ Duxton ($1,228 psf). The average price for Pinnacle @ Duxton is significantly above that for Toa Payoh and the central region, which reflects the superior location of the development.
Source: EdgeProp Market Trends (as at 8 March 2024)
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