Is HDB Avoiding 5-Room Flats at Berlayar Because Prices Could Cross S$1 Million?
The Business Times article raises an important question about whether HDB should include 5-room flats in highly desirable Prime projects such as Berlayar Rise. On the surface, the argument is straightforward: larger families should also have access to bigger new flats in sought-after locations, especially when many families may find 4-room flats too small for long-term living. However, when the issue is viewed alongside current BTO pricing, surrounding resale transactions, and the planning objectives behind Prime projects, the answer is more nuanced.
The S$1 Million BTO Concern Is Real
One possible reason HDB may be cautious about including 5-room flats in Berlayar Rise is pricing. The 4-room flats at Berlayar Rise are already positioned at a relatively high price range because of the estate’s location near Telok Blangah MRT, Labrador Park and the Greater Southern Waterfront. If a 5-room flat were introduced and priced proportionately higher than a 4-room unit, upper-floor or better-facing units could approach or exceed S$1 million before grants.
This would create a major public perception issue. Even if the flats are still subsidised relative to market value, the headline price of a S$1 million BTO flat would likely attract strong public attention. For HDB, this may be an uncomfortable pricing threshold, especially because BTO flats are meant to remain broadly affordable. However, this is unlikely to be the only reason for excluding 5-room flats.
HDB May Be Prioritising More Homes Over Larger Homes
A stronger explanation is land-use efficiency. Berlayar Rise sits in a highly scarce and strategic location. In such central or city-fringe areas, HDB may prefer to maximise the number of households who can benefit from subsidised housing rather than allocate more floor area to larger units.
A 5-room flat typically takes up significantly more space than a 4-room flat. On the same site, providing more 5-room units would reduce the total number of homes that can be built. From a planning perspective, this is a trade-off between serving fewer large households with larger units and serving more households with 3- and 4-room flats. For Prime and Plus locations, HDB appears to be leaning towards the latter approach.
Demand in the Area May Favour Smaller Household Types
Another likely reason is the expected demand profile for Berlayar Rise. The project is located near MRT connectivity, future waterfront transformation and city-fringe employment nodes. These attributes may attract young couples, first-time buyers, professionals and smaller nuclear families rather than mainly large multigenerational households.
For these groups, 3-room and 4-room flats are usually the more practical and affordable choices. HDB may therefore have assessed that the strongest demand in this specific location would come from households seeking access to a prime location at a manageable price quantum, rather than buyers specifically needing 5-room flats.
Existing 5-Room Resale Supply Already Serves Larger Households
The PropNex PropMap transaction data shows that there is already an existing supply of 5-room flats within about 1 km of Telok Blangah MRT and the Berlayar area. The data covers eight HDB clusters, with 59 past transactions and 16 resale listings for larger flat types in the surrounding Telok Blangah area in the past 5 years.
This suggests that 5-room resale options already exist nearby, especially in Telok Blangah Drive and Telok Blangah Heights. From HDB’s perspective, the absence of new 5-room BTO units may be partly mitigated by the availability of larger resale flats in the area. However, this does not fully address the affordability issue, as newer resale 5-room flats in the area are already approaching or exceeding S$1 million.
Older 5-Room Flats Are Cheaper Because of Lease Decay
The surrounding resale market is divided into two clear segments. The older 5-room flats in Telok Blangah Drive and Telok Blangah Heights, mostly completed around 1977, generally transact below S$1 million. For example, several older blocks show average transaction prices ranging from about S$694,000 to S$751,000, with price ranges mostly between the mid-S$500,000s and just above S$900,000.
This lower pricing is not necessarily due to weak demand. It is largely because these flats are nearly 50 years old and have a shorter remaining lease. As HDB flats age, buyers may face tighter CPF usage rules, shorter loan tenure and greater concerns about long-term value retention. These factors place a natural ceiling on resale pricing for older flats, even in attractive locations.
Newer 5-Room Flats Show That S$1 Million Demand Already Exists
The newer 5-room flats nearby tell a very different story. At 88 Telok Blangah Heights, which was completed around 2000, past 5-room transactions reached up to about S$1.07 million. At 85 Telok Blangah Heights, completed around 2001, past transactions reached up to about S$1.02 million, while current asking prices range from about S$895,000 to S$1.10 million.
This is important because these are not brand-new flats. They are already about 25 years old. If resale buyers are willing to pay above S$1 million for older 5-room flats in the area, then a brand-new 5-room BTO at Berlayar Rise, with a fresh 99-year lease and Prime location attributes, could plausibly be priced close to or above S$1 million before grants.
HDB May Also Be Managing Future Windfall Gains
Another possible reason for limiting larger units in Prime projects is subsidy management. A brand-new 5-room flat in Berlayar would likely receive a substantial market discount compared with its theoretical resale value. Even with Prime restrictions, subsidy recovery and a longer minimum occupation period, the absolute future resale value of a larger unit could still be significant.
Larger flats in prime locations tend to produce larger absolute capital gains because the total quantum is higher. By focusing on smaller flat types, HDB can still provide access to prime locations while moderating the size of potential future windfalls. This is especially relevant in an area linked to the Greater Southern Waterfront, where long-term transformation may support stronger future resale demand.
The Article Still Raises a Valid Policy Gap
At the same time, the article is right to highlight a genuine concern. Larger families, including households with three or more children or those living with elderly parents, may find 4-room flats insufficient. If Prime BTO projects do not include 5-room flats, these families may have to turn to resale flats, executive condominiums or private homes.
That creates an affordability issue. Smaller households may get access to new subsidised flats in central locations, while larger families may be pushed into the resale market where suitable newer 5-room flats can already cost close to or above S$1 million. This outcome may not fully align with broader family-supportive housing objectives.
A More Balanced Approach May Be Needed
A possible middle ground is not to include a large number of 5-room flats in every Prime project, but to set aside a small proportion of units for larger households. For example, selected Prime projects could include a limited number of 5-room flats, with priority given to families with more children or genuine multigenerational housing needs.
This would allow HDB to support larger families without materially reducing total housing supply. It would also avoid turning every Prime project into a high-quantum market, while still recognising that family size should matter in flat-type planning.
HDB’s Planning Seems To Be Focused On Serving As Many Households As Possible
HDB is probably not excluding 5-room flats at Berlayar Rise solely to avoid crossing the S$1 million BTO threshold. That pricing concern is real, especially when nearby newer 5-room resale flats have already transacted above S$1 million. However, the broader explanation is likely a combination of land-use efficiency, demand profiling, affordability management and future subsidy control.
In practical terms, Berlayar Rise appears to have been planned to serve as many households as possible in a scarce prime location, rather than to provide the largest possible range of flat types. This makes sense from a supply and affordability perspective. However, it also leaves a gap for larger families who want new flats in central locations but may not want or be able to pay resale prices for larger homes nearby.
Disclaimer: This article is intended for informational and educational purposes only and reflects the author’s independent analysis and opinions based on publicly available information, HDB policies, market data, and surrounding resale transaction trends at the time of writing. Any views regarding HDB’s planning rationale, pricing strategy, demand considerations or future policy direction are speculative and should not be interpreted as official statements or positions of the Housing & Development Board (HDB) or any government agency. Property prices, regulations and market conditions may change over time. Readers should conduct their own due diligence and seek professional advice before making any property or financial decisions.
Article contributed by Jerry Wong.
Jerry Wong is a realtor at Propnex Realty, bringing a rich background in interior and lighting design to his work. He loves exploring diverse spaces and observing the transformative power of real estate. Beyond his professional role, Jerry finds his greatest fulfillment in connecting people with the right properties, gaining immense satisfaction from helping clients achieve their dreams.
