Search Results for: DBSS

How much is that DBSS resale flat in the window?

$700,000. This is how much one of the first DBSS units to enter the resale market recently cost.

And this could very well set the trend for all the following DBSS resale units which enter the market. The Design, Build and Sell Scheme (DBSS) has been discontinued since 2011 when the public questioned the prices at which developers were selling the public housing units at. Centrale 8 at Tampines went for $880,000 in 2011, though developers lowered it to t$778, 000 thereafter.

The Premiere at Tampines

The Premiere at Tampines

But since units at the 2006-launched The Premiere at Tampines have gone on the resale market since most of its occupants have passed the 5-year minimum occupation period (MOP), all eyes are on how much these originally premium units will go for considering the current market situation.

Although lower than the highest asking price of $800,000 for units in Tampines, the average selling price is still about double of its original. A 5-room flat at The Preimiere @ Tampines originally cost $308,000 to $450,000. Recent sales figures showed a 2 units going for $699, 888 and $671,000. Comparing its age and size with other HDB flats nearby, they are considerably pricier. Most of the other HDB flats in this mature estate may however be larger, almost 109 sq m larger, but with less than 70 years left on the lease.

Centrale 8 in Tampines under the DBSS scheme. Image by Sim Lian Group Limited.

Centrale 8 in Tampines under the DBSS scheme. Image by Sim Lian Group Limited.

Should these young HDB flats cost more than its counterparts and will buyers buy into its premium private developer fittings qualifying for its higher prices even as resale units?

Married couples opt for HDB Parenthood Priority Scheme

It may or may not increase the likelihood of young Singaporean couples starting a family sooner, but more married couples are purchasing new HDB flats under the Parenthood Priority Scheme (PPS).

In the March sales launch alone, 32 per cent of Build-To-Order (BTO) flats were taken up by applicants under the PPS scheme. There is almost 100% possibility of all PPS applicants getting a flat. 3, 898 flats were launched in March in non-mature estates such as Sengkang, Punggol and Bukit Batok. A total of 12,000 applicants applied for BTO flats in the latest launch.

Compassvale Cape Mar2013

HDB’s next launch will be later this month, in Choa Chu Kang, Hougang, Jurong West, Sembawang and Woodlands. WIth 4, 850 new flats plus 3,000 balance flats from previous launches planned, response from PPS applicants may be even more than March’s 32 per cent. Other schemes which the HDB provides include the:

  • Multi-Generation Priority Scheme (MGPS)
  • Married Child Priority Scheme (MCPS)
  • Third-Child Priority (TCP) Scheme
  • Tenants Priority Scheme (TPS)
  • Ageing-in-Place Priority Scheme (APPS)
  • Studio Apartment Priority Scheme (SAPS)

It should be noted that for the hotly debated Executive Condominiums (EC), the priority schemes do not apply. And for previous Design Build and Sell developments, developers are required to give priority to buyers applying under the Married Child Priority (MCP) Scheme and the Third-Child Priority (TCP) Scheme.

Topiary Executive Condominium in Fernvale.

Topiary Executive Condominium in Fernvale.

Under the MCPS, applicants who are a first-time married couple and who have at least one child below the age of 16 qualify for up to 30% of BTO and 50% of SBF (sale of balance) flats in each launch. This scheme began in January 2013 and many have since successfully secured a HDB Flat by applying under this scheme. Whether this will help population growth and fertility rate remains to be seen, but at least it has helped Singaporean couples secure a home more quickly and without the pain of waiting endlessly.

Previously married couples had joined engaged couples applying under the Fiancee scheme. However unmarried couples made up close to 50% of the applicants under this scheme, which lessened the chances of those who are already married or already have a child securing a flat.

Not easy to keep the spirit of EC

What was the initial purpose of creating this particular hybrid property type? Wasn’t it to help the so-called “sandwich class”?  But now as property developers of new executive condominiums (ECs) are creating options which are comparable to private properties, does it still serve its original purpose? Who are the ones actually benefiting from the EC scheme?

Forestville EC in Woodlands

First up, one does need to be reminded that land sold under the Government Land Sales programme are priced cheaper than those for private properties. Considering that permanent residents (PRs) are the most avid buyers of resale executive condominiums, are the eligibility criteria too lax thus pushing the prices up as both property buyers and developers alike recognise the hidden value of ECs? And with the narrowing of the price gap between ECs and private properties, will this instead nudge the price tag of the latter even higher?

If you compare a penthouse in an EC at $1.7 million to one in the private market at more that $3 million, which would you go for? The answer is clear. Should ECs have penthouse units or should they belong in the private market altogether. Do you think the government should step in to manage this sector as they did the Design Build and Sell Scheme (DBSS)?

Executive Condominium prices = Private Condominium prices?

And it might be that way for a while more as new executive condominiums present luxe features, giving private mass market homes a run for their money. The current price gap is 17.2 per cent this year, down from 32.2 per cent in 2007′s property high. Executive condominiums are hot ticket property buys in the local real estate market.

Some of the pros of buying an executive condominium include:

1. The income ceiling for ECs has increased to $12, 000 per household, thus if you earn less than that, you are still eligible for a housing grant from HDB.

2. After the minimum occupation period (MOP) of 5 years, the EC unit can be sold to Singaporeans and Permanent Residents in the open private property market.

3. After 10 year, the EC unit can then be sold to foreigners.

Property buyers see a great deal of rising value in this particular property type. And it is usually the areas where EC units are limited that see the most active sales. Districts with the greatest number of resale ECs are usually those with the narrowest price gaps.  Areas such as Bishan and Ang Mo Kio, and Pasir Ris, Simei and Tampines, saw the narrowest price gap of 10 per cent whereas in Sengkang, Punggol and Hougang, the price gap was 22.4 per cent. Average psf of units at Bishan Loft and Nuovo in Ang Mo Kio is only $100,000 below the average price psf of private condominiums in the same district.

The recent EC launches, CityLife in Tampines for example, has pushed this market up a notch into the private property arena with its  luxury penthouse, infinity pool and sky terraces.

Is this narrowing of the price gap between public and private housing a true reflection of the housing situation in Singapore?  If the rise in prices continue, would the Executive Condominium market eventually suffer the same fate as the Design Build and Sell Scheme (DBSS)? In the end, the only question we are truly left with is, should it be that way?

More HDB Flats at lower prices

By the 20th year into the 21st century, Singapore’s largest property developer, the HDB, has made a promise to deliver cheaper HDB flats and quicker.

Depot Heights – New BTO Flats in one of HDB’s many sales launches throughout the year.

Tapping on the flourishing construction industry, the Senior Minister of State for National Development, Lee Yi Shyan has stated that they hope to increasingly rely on mechanisation to reduce on-site construction time. HDB has launched more that 52, 000 flats in the last 2 years, and 20, 000 more are expected within the next few. How will the quality and floor area of these new flats compare to the older ones and are we to expect any improvements?

What does this mean for the property market? Will it affect the private residential property sector and what does it signify about the population growth rate of the nation-state? Will the now-defunct Design-and-build scheme be reinstated as the demand for HDB flats is expected to increase by 2020? And as singles could possibly enter the playing field albeit with stipulated criteria, what changes are expected of Singapore’s real estate market by then?

Looking back on 2011: Key Property Highlights of the Year

As we ring in the New Year, iProperty.com takes a look back to remind you of the highlights of the real estate market over the last 12 action-packed months:

1. Cooling Measures 2011

The additional cooling measures introduced by MND (Ministry of National Development) was by far the most talked-about topics within the property industry this year. These included the increase of seller stamp duty rates to 4 to 16% for residential properties sold within four years of purchase, as well as the lowering of LTV (Loan-to-Value) limits from 70% to 60% per cent for buyers financing two or more properties.

In November 2011, MND also shocked the market by announcing the increase in Additional Buyer’s Stamp Duty of 10% for foreigners purchasing private residential property.

2. Relief for The Middle-Class Masses

Those in the “sandwiched middle-class” had much to rejoice about this year, when MND announced that the income ceiling for buyers of HDB flats would be raised from $8,000 to $10,000, and from $10,000 to $12,000 for buyers of ECs (Executive Condominiums).

Other measures included the release of large numbers of BTO (Build-To-Order) flats, accompanied by a SBF (Sale of Balance Flats) exercise in September earlier this year.

3. En-Bloc Schemes a Plenty

Rochor Centre, Redhill Close, East Coast Road and Clementi Avenue 5 were all examples of the areas which were ear-marked for SERS (Selective En bloc Redevelopment Scheme) this year. While the sentiment of residents affected was mixed, a good many were most concerned about compensation and replacement programs – with some even writing some (very public) letters to voice their unhappiness, contributing to the extensive media coverage on this topic.

4. DBSS Sticker-Shock

While high property prices in Singapore are nothing new, the price tag of $880,000 for a unit at Centrale 8, a DBSS (Design, Build & Sell) project in Tampines proved too much even for the locals to swallow.

Very quickly, petitions from the public led to MND stepping in to freeze all land sales under the DBSS program. However, prices of Centrale 8 were eventually lowered, and DBSS sales soon continued into the year, with projects such as Lake Vista @ Yuan Ching, the first DBSS project in western Singapore, launched at more affordable prices, from S$360,500 for the smallest unit to S$680,400 for the largest flat.

5. ECs: the Hot Property of 2011

ECs were in high demand in 2011, with notable launches including the Arc at Tampines –which commanded higher average PSFs as compared to Belysa, the previous EC launch in Pasir Ris earlier in the year.

ECs particularly appealed to home-buyers whose income was below the revised ceiling of $12,000, and who wanted accessibility to condo facilities such as 24-hour security, a swimming pool and tennis courts.

6. Record-Breaking PSFs

Developers certainly had reason to pop out the champagne at their annual company dinners this year. Earlier this month, more 80% of the freehold Charlton Residences was sold, even before its official launch. New benchmark prices were also set at the preview of Thomson Grand in Upper Thomson, with PSFs for apartments topping a jaw-dropping $1,600 psf. EC developers also had much to celebrate this year, as mass-market EC projects like Blossom Residences enjoyed strong consumer demand during the first weeks of their launch.

Home buyers in Singapore positive about prices of public housing

Survey results by iProperty.com.sg signal increased confidence in market stability

Recent government measures taken to address concerns surrounding the public housing market appear to have brought about some positive sentiments among home buyers, as demonstrated by a recent Poll conducted by iProperty.com.sg, Singapore’s number one property website.

The poll, conducted from August to November this year, asked respondents for their opinions on whether public housing prices will stabilise within the next three to five years – as mentioned by Minister for National Development Khaw Boon Wan earlier this year. 1,033 participants responded to the poll.

Key findings as follows:

1.   More than a third of respondents (36.9%) believe that three to five years is a fair assessment for public housing prices to stabilise.

2.   Trailing slightly behind are 31.9% of respondents who, on the other hand, think that prices will never stabilise and more radical measures need to be taken.

3.   19.9% of respondents think that the government is doing a stellar job and prices will stabilise over the next 1 to 2 years.

4.   11.3% thinks approximately 5 to 7 years is needed for prices to stabilise.

From the findings, it can be seen that a clear majority – 56.8% – are of the opinion that the government is either on track or will likely exceed expectations on their three-to-five year projection to cool the public housing market.

However, a significant minority – 43.2% – remain skeptical that public housing prices will stabilise in the timeframe put forward. Further to this, a large portion of this group – 31.9% of respondents – appear unconvinced of the current measures adopted by the government and feel further action needs to be taken.

Much of the positive sentiment can be attributed to the range of measures and plans the government had rolled out in the second half of the year. These measures include a series of new Built-to-Order (BTO) launches in July, September and November, injecting several thousand new units into the market. These include developments in highly-coveted mature estates such as Bedok, Yishun and Hougang. Complementing this were recent announcements made to enhance chances for repeat applicants bidding for new units, lifting of the income ceiling for Executive Condominiums, and for Barrier-Free Accessibility (BFA) features to be made available across all HDB estates by the end of December 2011.

“The findings of our Poll paint an encouraging picture, showing that measures taken by the government have borne some fruit,” said Shaun Di Gregorio, Chief Executive Officer of iProperty Group Limited. “However, as encouraging as these numbers are, we should also not forget that there is still a significant level of dissatisfaction still pervading the market.”

Referring in particular to the 31.9% of respondents who said that prices will never stabilise, Shaun Di Gregorio said that what the government does in the next six to 12 months will be crucial in winning over this group of skeptics. Key issues that may have contributed to this outlook include the pricing of units under the Design, Build and Sell Scheme (DBSS) and exceptionally high cash-over-valuation figures for some highly sought-after resale units.

“Affordability and lack of suitable options will continue to be the two most important factors for home buyers. While we are seeing a gradually-increasing level of positivity in the market, other concerns, such as the still-increasing price of property and fears of a potential economic downturn in 2012, will be key considerations that may mean the difference between a positive and less-than-positive 2012 for potential home buyers,” he added.

Lowdown on Singapore’s property market Q2 2011

The Urban Redevelopment Authority has released their Q2 real estate statistics. 2 major property agencies, CB Richard Ellis and PropNex, have responded with their views. What do the property veterans have to say?

URA's real estate statistics are available on their website.

In their second quarter real estate statistics released yesterday, the URA has pointed out that:

Prices and Rentals
- The rate of price increases continues to moderate. Prices of private residential properties increased by 2.0% in 2nd Quarter 2011, lower than the 2.2% increase in the previous quarter.
- Prices of non-landed properties in Rest of Central Region (RCR) and Outside Central Region (OCR) increased at a more moderated pace.
- Rentals of private residential properties4 increased by 1.3% in 2nd Quarter 2011, compared with the 1.2% increase in the previous quarter.

Supply in the Pipeline
- The supply of residential units in the pipeline continues to build up. As at the end of 2nd Quarter 2011, there was a total supply of 71,111 uncompleted private residential units from projects in the pipeline.
- Of the supply in the pipeline, 33,899 units remained unsold as at 2Q2011.
- The unsold units comprised 10,309 units in CCR, 7,610 units in RCR and 15,980 units in OCR.

Launches and Take-up
- A total of 4,802 uncompleted private residential units were launched for sale by developers in 2nd Quarter 2011, compared with 4,130 units in 1st Quarter 2011.
- At the same time, 4,325 uncompleted private residential units were sold by developers, compared with 3,430 units in 1st Quarter 2011. Developers also sold 119 completed private residential units in 2nd Quarter 2011.

Terrasse, one of the major projects in the Outside Central Region (OCR) which sold well in Q2.

How active have home buyers been?
In response to URA’s numbers, Mr Li Hiaw Ho, Executive Director, CB Richard Ellis has this to say, “The volumes of new and resale homes (excluding ECs) sold in Q2 2011 outnumbered the corresponding numbers in the first quarter by 23.6% and 12.0% respectively.

A total of 4,444 new homes were sold in Q2 2011, most of which were located in Outside Central Region (OCR) as developers actively pushed out their projects built on leasehold sites bought from the government land sales programme in 2010.”

Hedges Park in Flora Drive.

Of the 4,444 units sold in Q2 2011, 61.4% were located in OCR. Major projects in OCR that sold well include Eight Courtyards, Hedges Park and Terrasse. Small-format projects in Geylang area seemed to be popular as seen in the sell-out of Centra Heights, Melosa and Sims Edge. In the EC market, all the 315 units of Belysa were sold during the quarter as it was attractively priced at $670 psf.

Melosa condo project in Geylang

The strong activity in the primary market spilled over to the secondary market resulting in 3,945 resale homes and 670 sub-sales in Q2 2011. Despite the slightly higher number of sub-sales in Q2 2011, it represents only 7.4% of the total sales volume, showing that the property measures are effective in keeping speculative activity at bay.

Residential prices in Q2 2011 rose by 2.0% q-o-q according to preliminary estimates by the URA, a smaller increase than the 2.2% in the previous quarter. This shows that home prices are stabilising. Home rents moved up 1.3% q-o-q, a shade better than the 1.2% chalked up in Q1 2011. The rise in rents was led by rents in OCR in both quarters, which is possible as an increasing number of expatriates take up local packages without separate housing allowances.

Sims Edge condominium units are popular with expats.

Going forward, they expect the take-up in Q3 2011 to be lower than Q2 2011’s volume as uncertainty of the debt crisis of the European Union and the U.S. have somewhat dampened market sentiments. In addition, the record supply of public housing being released to the market as well as a possible tweaking of government policies in the coming months is likely to affect the demand of private suburban homes.

How much more will COV levels rise?
PropNex’s CEO, Mohamed Ismail, has other opinions on the property market and predicts a further rise in COV for resale HDB flats.

He says, “Those who took 1Q11 to understand the cooling measures have come back to buy on the resale market. However, there are still many owners who, due to the effects of the cooling measures—especially the lower 60% Loan-To-Value ratio and revised Minimum Occupation Periods, are reluctant to move or sell their flat, resulting in a supply crunch and driving median resale prices as well as COV levels up.”

According to data from PropNex data, which has a 25% market share in the HDB resale market, COV levels have risen.

 

Mr Ismail also noted that for the months of April, May and June—which constitutes 2Q11—PropNex data showed a 1%, 4% and 10% increase respectively in the number of HDB resale flats being transacted at COVs of $50,000 and above.“Home sellers must remain realistic about their COV demands,” pronounces Mr Ismail, “because if not, there will be resistance from the buyers.”His predictions? The overall median COV looks set to rise to $38,000 in the third quarter before plateauing in the beginning of next year.”Will the resale market be affected by the new BTO launches? HDB’s latest BTO flats launch in July 2011.

“In the latest Build-to-Order (BTO) exercise in which 3,556 flats were launched,” continues Mr Ismail, “the over subscription rate was between three to four times, which demonstrated a continued strong demand for public  housing.”

His sentiments are that some would-be upgraders are hanging on to their HDB flats because of the widening price gap between HDB resale flats and private property. As such, potential HDB upgraders could have found private property prices to be out of reach so they postponed their upgrading plans.

“In addition, those with existing home loans could be put off upgrading because of the rule that they cannot borrow more than 60% of the value of the property they want to buy,” continues Mr Ismail, “the 40% cash upfront is a substantial amount for those who are taking bank loans, which have a close to 25%, also means they would have to sell before getting another loan and have nowhere to stay in the interim.”

Source: Urban Redevelopment Authority (URA); Mr Li Hiaw Ho, Executive Director, CB Richard Ellis; PropNex.

Editor’s Commentary:
Now into the second half of 2011, 3 months after the stirring General Elections in May, the housing situation seems to be in a standstill despite HDB’s announcements that many more BTO flats are being built. The income ceiling and DBSS reviews are perhaps what the public is looking for? And what about resale HDB flat prices, will they fall when the new flats are ready?