SINGAPORE - Depending on whom you ask, Rochor could be an arts and heritage district, a late-night supper spot or a pitstop on the way to the nearby Bugis area - what it won't be called is 'home'.

But the launch of Build-To-Order (BTO) flats in a coveted spot next to Jalan Besar MRT station means 960 households will be able to call the area just that once units are completed in 2028.

The highly anticipated Rochor BTO project - River Peaks I and II - is the first to come under a new prime location public housing model that imposes stricter buying and selling conditions on HDB flat owners.

Conditions include a 6 per cent subsidy clawback clause upon resale of the unit, a 10-year minimum occupation period and a limited pool of resale buyers whose combined monthly household income does not exceed the prevailing amount, now $14,000.

These are aimed at encouraging home ownership and reducing the "lottery effect", a major point of discontent in the resale market where some first-time buyers earn a handsome profit when selling their well-located flats.

Home seekers were seemingly undeterred by these conditions imposed on the Rochor BTO project, as the four-room flats, the biggest room type on offer, have drawn three times more applicants than units available just one day after the Housing Board put them on the market.

The fact that buyers will have to wait six years for these Rochor flats to be completed - significantly longer than the median 4.4 years - appears to have not dampened demand.

The estimated floor area of the units is also slightly smaller than other BTO flats in mature estates.

This begs the question: Are the stricter conditions under the prime location public housing model enough to curb the "lottery effect"?

The HDB's 6 per cent subsidy clawback is one of key measures in reducing windfall gains when owners sell their flats on the open market, but property analysts are split over the effectiveness of the clause as there is no direct comparison of such a clawback in Singapore's housing market.

All subsidies are factored in when units are launched as BTO flats.

One analyst said the 6 per cent amount is a "modest sum" considering the "potential capital appreciation" of the Rochor flats while another said it "seems reasonable".

But most concur that many sellers will likely factor in the 6 per cent subsidy recovery amount into their selling price.

For instance, if a four-room flat is sold for $1.2 million, the seller will have to return around $72,000 to the HDB but still pocket a profit of around $500,000, said Ms Christine Sun, senior vice-president of research and analytics at real estate firm OrangeTee & Tie.

She added that a $1.2 million price tag for a four-room unit in Rochor is a "conservative estimate" as some four-room resale units have been edging towards the $1 million mark in recent months.

Huttons Asia senior research director Lee Sze Teck suggested charting a hypothetical situation to look at the potential price gains by using the closest comparable BTO project, Telok Blangah Towers, launched in 2007.

The project is a stone's throw from the future Greater Southern Waterfront, where flats will come under the prime location public housing model. The project was completed in 2013 and reached its five-year minimum occupation period (MOP) in 2018 and began transacting on the open market.

HDB data notes that four-room resale flats ranged from $820,000 to $975,000 in the third quarter - a potential price gain of 2.4 to 2.6 times the price in 2007, said Mr Lee.

If a similar gain of 2.4 to 2.6 times is assumed for the Rochor four-room flats, owners would have to sell their units at $1.51 to $1.61 million, added Mr Lee.

In this hypothetical situation, after returning around $90,000 to $99,000 to the HDB, owners could still pocket a profit of around $900,000, he said.

But Mr Lee warned that it is hard to predict price gains with certainty as there is no precedent for such flats under the prime location housing model.

The long completion timeline is also another factor as the Rochor flats will only hit the resale market sometime in 2038, after factoring in the 10-year MOP.

Could another black swan event like the Covid-19 pandemic throw a spanner in the works in those intervening 17 years? Taking inflation into account, could million-dollar price tags for HDB units not raise eyebrows in 2038?

The prime location public housing model came on the back of all-time high HDB resale flat prices and a record number of million-dollar flat sales in a year, sparking concerns of home affordability for common folk.

This is particularly so as construction for BTO flats - the most affordable public housing options for Singaporeans -has been hit with delays of up to 10 months due to supply and manpower shortages arising from the pandemic.

But only time will tell if the stricter conditions under the prime location public housing model will dampen the "lottery effect" and make public housing more equitable.