New housing areas in Yishun and Gillman Barracks; lower initial downpayment on BTO for young couples: Desmond Lee
/ EdgeProp Singapore |
Site map of Chencharu and the first BTO project to be launched in June (Source: HDB)
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New housing sites in Yishun and Gillman Barracks, lower initial down payments for young couples and $300 a month open market rental vouchers were among initiatives announced by Minister for National Development Desmond Lee on March 5.
Speaking in parliament during the Ministry of National Development’s Committee of Supply Debate, the minister announced around 10,000 homes will be built in the new housing area of Chencharu in Yishun. At least 80% of the homes will be designated for public housing, with the first Build-To-Order (BTO) project in Chencharu to launch in the June BTO exercise.
The project, located along Sembawang Road, will comprise 1,270 units of two-room flexi to five-room flats. More housing projects in the area will be launched over the coming years, along with new recreational, community and commercial amenities. The estate is located near the Khatib MRT Station on the NorthSouth Line.
Over the longer term, the government is also studying the possibility of redeveloping Gillman Barracks into a new residential area with a mix of private and public housing. A former military barracks built in 1936, the site housed the British Army’s First and Second Battalions through World War II, before it was handed over to the Singapore Armed Forces (SAF) in the 1970s. The site was later vacated by the SAF and repurposed for commercial uses in the early 2000s.
Several of the former barracks are currently leased out to tenants including offices, F&B outlets, and art galleries. The tenancies will progressively expire by 2030. Under the URA Master Plan 2019, Gillman Barracks is zoned as a reserved site.
Environmental and heritage studies for the potential new neighbourhood will begin in 2Q2024 and are expected to be completed around 1H2026.
Map showing the location of the Gillman Barracks site (Source: HDB)
Ismail Gafoor, CEO of PropNex Realty, expects demand for BTO flats in Chencharu to be healthy given the area’s location near an MRT station and various schools and amenities such as HomeTeam NS Khatib and Yishun Sports Centre and Stadium. “There could also be some pent-up demand for new flats in Chencharu as many of the existing HDB blocks around the Khatib MRT station were built in the 1980s,” he adds.
For Gillman Barracks, BTO flats launched there will likely be classified under the Prime or Plus categories, underpinned by its location close to town and the Labrador MRT Station, remarks Eugene Lim, key executive office at ERA Singapore. “Hopefully with the redevelopment of Gilman Barracks, more retail amenities will be introduced to that area,” he adds.
Rental vouchers, lower deposit for young couples
Minister Lee also unveiled more details on the Parenthood Provision Housing Scheme (PPHS) (Open Market) voucher scheme announced during the Budget 2024 speech earlier this month. The voucher is aimed at supporting families renting an HDB flat on the open market while waiting for their BTO flat to be completed. Currently, eligible families who need temporary accommodation while they wait for their flat can rent an HDB flat at a subsidised rate under the PPHS. About 2,000 flats are managed under the scheme, which HDB intends to double to 4,000 flats by 2025. However, families with more urgent accommodation needs may need to turn to the open market to rent temporary accommodation.
Under the PPHS (Open Market) voucher scheme, eligible families will receive $300 a month to rent a public flat or bedroom in the open market. The scheme will run for one year from July until June 2025. Eligible families will receive the voucher on a reimbursement basis, based on the number of months of their tenancy that fall within the stipulated one-year period.
Separately, young couples who are full-time students or National Servicemen will pay a lower initial down payment on their BTO. Under an enhanced Staggered Downpayment Scheme (SDS), young first-timer couples will pay a down payment of 2.5% of the flat’s total price – lower than the 5% or 10% down payment currently required – when signing the agreement for lease, while the remainder is paid at key collection. The revised scheme will take effect from the BTO sales launch in June.
Source: HDB
PropNex’s Gafoor views the $300 monthly PPHS (Open Market) voucher as “on the modest side”, considering the difference om rental rates of PPHS HDB flats to those on the open market. Depending on their location, rent for a three-room PPHS flat could range from $600 to $900 per month, while the average monthly rate for a similar flat on the open market stood at $2,647 in 2023. “After factoring the $300 PPHS voucher, we expect that families will still have to bear a substantial rental cost in the interim while they are leasing in the open market,” he notes.
Meanwhile, Gafoor believes the revised SDS will help ease the initial financial burden for eligible young couples. “Assuming the couple applies for a four-room BTO flat in a non-mature estate which is priced at $420,000, the 2.5% downpayment works out to $10,500 compared with $21,000 at 5% which could make a real difference to some young couples who are just starting out,” he explains.
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