BTO Prime Location Housing:
Is It Really Worth It?
Introduction
BTO Prime Location Housing (PLH) has become a key topic amongst couples, families and homebuyers in Singapore, and for good reason — To own a home in central Singapore at a subsidised cost? It’s hard to say no. But is it truly worth the hype and your hard-earned dollars? Are BTOs in prime locations always better than non-prime ones? Here’s what you should know before making your decision.
1. Excellent Location: A Forever Home?
As its name suggests, BTO PLHs are located in prime, central locations of Singapore — They are great options which offer good proximity to MRT stations, shopping malls, schools and good connectivity to the rest of Singapore. PLH flats check all the right boxes if you’re looking for a brand new home to comfortably settle down in for the long term.
2. Limited Flexibility & Missed Opportunities
A lot can happen during your minimum occupation period (MOP) of 10 years — families grow, priorities shift, and life takes unexpected turns. You might find yourself needing more space for a growing family, wanting to move closer to your child’s future school, or planning to bring your parents to live with you. You and your family’s needs may evolve over time and these important lifestyle shifts can be difficult to act on when your options are limited. That said, while we’d be thrilled if you’ve found your potential forever home, it’s also smart to keep some flexibility — so you can pivot, upgrade, or take on a good investment opportunity if things change down the road.
Not to mention that PLH units tend to be smaller than their non-PLH counterparts. For example, 3-room flats in PLH projects are typically 66 sqm instead of the usual 68 sqm, while PLH 4-room flats measure 88 sqm instead of 92 sqm in non-PLH projects.
Furthermore, you won’t be allowed to purchase any residential properties during your decade long MOP, not even for investment purposes. This means that you will miss 10 years worth of lucrative investment opportunities that emerge over the years — While it is indeed a privilege and luxury to own more than one property in Singapore, if you have the means and the financial freedom to investment in properties, it is definitely an opportunity worth exploring.
Hence, it is important to consider if this opportunity cost aligns with your financial goals — After all, property investments have long been recognised as effective investment vehicles to build wealth and expand asset portfolios.
3. Limited Resale Potential
Like most homeowners, it’s reasonable to anticipate a handsome return or appreciation in property value, especially after waiting for a whole decade. However, there are a few reasons why your PLH flat’s resale value might fall short of the ‘pot of gold’ you expected.
The income ceiling placed on resale buyers limits the pool of potential buyers. With fewer eligible buyers, demand is naturally lower which caps your flat’s resale price — often below what similar properties would fetch on the open market. While there is no formula to estimate its resale value, it’s unlikely that you’ll be able to to sell your PLH unit at a price beyond what families within the income ceiling can realistically afford. After all, the PLH scheme was created to keep flats in prime and central locations affordable.
Furthermore, while there is generally higher demand for properties in central regions compared to other parts of of Singapore, it might not be the case 15 years down the road (when you include time taken for construction). With Singapore’s ongoing decentralisation efforts, the perceived value and appeal of staying near central areas might deteriorate over time and this demand might shift towards new regional hubs like Woodlands and Punggol.
It is also worth noting that private property owners need to wait 30 months or 2.5 years after selling their private property before purchasing a PLH resale unit. This further reduces the pool of potential buyers which consequently, decreases demand and resale value.
As such, for the reasons above, coupled with HDB’s subsidy recovery policy (6% to 9% of resale price), the resale potential of PLH flats are limited.
The Essence of BTOs: Purpose Over Profit
It’s important to understand the fundamental idea behind BTO flats and HDB’s housing model in general. The core purpose is to provide accessible and affordable housing for Singaporeans and permanent residents. Accessibility first comes in the form of opportunity — through the balloting system, which gives everyone a fair chance to purchase a flat. Affordability follows — because there’s little point in having the chance to buy if one lacks the financial means to do so. This is where government subsidies and cooling measures come in, to keep prices within reach and prevent runaway inflation. While it may be tempting to criticise the limited resale potential or question certain policies, the broader objective is clear: to ensure that homes, even in prime central regions, remain accessible not just to the affluent, but to a wide spectrum of Singaporeans. It’s a system built not purely for investment, but for long-term social stability and inclusiveness.
The Bottom Line
If you’re seeking a stable and convenient long-term home, PLH flats would be more than ideal. However, if wealth building, profit maximisation and maintaining flexibility matter greatly to you as well, consider your goals carefully and assess if opting for PLH flats aligns with your vision for the future.