Resale HDB flats in 2014

As the markets quieten down for the year end, one may wonder what the new year will bring. More new private homes? Or perhaps a revival of the resale HDB flat market which has seen less action especially in the last quarter of 2013?

For the first half of 2014 at least, sales transaction of resale HDB flats are not expected to soar. In fact, it might be the second year in a row, following 2013, with the least number of sales in the last five years. Usually the average number of transactions a year come up to between 24,000 and 37,000, but this year, the numbers may fall below the 20,000 mark.

HDB flatsOne of the main factors behind the dip could be the restrictions placed up PRs (permanent residents) buying HDB flats. Following their receipt of the PR status, they are now required to wait 3 years before being able to purchase a public housing unit from the resale market. But this may in turn drive up the rental demand, thus once again this may turn the market on its heels and redirect interest into the rental and private property market. Are more investing in private properties in order to ensure quick returns through rental yields? And could this be the trend for 2014?

As more new BTO flats are made available to first- and even second-time applicants, the lure of resale HDB flats may weaken even further. Location and space could the resale market’s plus points however. And as HDB holds back on its building schemes and reduces the number of launches next year, the buying crowd may once again consider resale flats more seriously. And industry players are more positive about H2 of 2014 as the low selling prices and COV (cash-over-valuation) attract buyers back into the market.

COV prices no more?

In fact, some sellers are even letting their HDB flats go at below valuation. Once a highly-debatable amount, these cash-over-valuation (COV) prices are now almost all gone, or miniscule at the least. Although these amounts are set by the seller, above the HDB valued selling price, it is usually a good indication of how popular a unit is, and whether the seller was looking to earn some bucks from the sale. But recent mortgage rules have affected the demand for resale HDB flats and according to HDB, in October alone 105 units were sold at less than their HDB appraised price. This is a significant number, especially as its a good 6.7 per cent more than the earlier half of the year. .

Book Lay View HDBThe mid-year announcements by MAS of stricter mortgage terms such as the introduction of the TDSR (total debt servicing ratio) and shorter loan periods have left many buyers reconsidering their property purchase more carefully. In addition, Singapore permanent residents now have a 3-year wait before being able to purchase a resale HDB flat. In January, the median COV stood at $35, 000. In October, it has fallen to $12, 000. Many sellers who have held on to their COV asking prices, have had a long wait, and some have given up and reduced their COV prices.

Areas where a larger amount of new HDB flats are being launched, such as Punggol, Sengkang and Chao Chu Kang, are harder hit as the buyers of resale flats in these areas will be diverted. BTO (build-to-order) flats are considerably cheaper than their resale companion. As singles and young couples are now hampered by a lower loan percentages, 30 per cent of their gross monthly income, many are no longer able to afford high COVs, even if they truly liked the unit. And as the building of new HDB flats are happening in quicker cycles, many BTO flats which are now eligible to be placed on the resale market after their 5-year MOP (minimum occupation period) tenure, will have to compete with more new flats nearby. As some families are keen to move to be near their children’s schools or because of family situations, there may be more resale flats going at or below valuation. How does this impact the HDB flat market in 2014?

HDB’s 3Gen Flats – More opt to live with parents

Married children usually choose to move out of their parental homes, preferring to build a new home of their own. But now with HDB introducing 3-Generation flats which aim to promote multi-generational living, the trend might veer the other way.

Although the offering is limited, with HDB only rolling out 84 such flats in Yishun to test the waters, they might consider bringing more to the table in the effort to promote the continuation of multi-generation households. These 3Gen HDB flats are about 5 sq m larger than the usual 5-room flat offerings put out by HDB, and they have four bedrooms and three bathrooms.

Saraca Breeze Yishun HDB flat2The September launch saw 1, 152 applications for these 5-room HDB flats, with one third coming from multi-generation households. Although the HDB previously has a Married Child Priority scheme, only 3 per cent of applicants chose to buy HDB flats under this scheme. In fact second-timers made up bulk of the applicants, a strong indication that preference is for more mouths living under a bigger roof.

As Singapore’s population heads towards saturation, and at the same time, age significantly, HDB might have to think of new schemes or new types of flats to suit different households and a large variety of needs. Will such flexibility be possible or will it take a toil on the authorities and also the taxpayers?

Rethink Resale

The foothold resale HDB flats has on the real estate market here, may now be a little shaky. HDB’s resale price index has indicated a 0.7 per cent fall in Q3.

Earlier this year, rules for Permanent Residents (PRs) purchasing HDB flats were changed. They now have to wait 3 years from the time they receive their permanent residency status before being able to buy a resale HDB flat. This may have cut off quite a substantial number of potential transactions in the resale HDB flat sector, but may also have pushed up sales volume in the private property market.

Saracca  Yishun BTO flatFor HDB flat sellers, maybe not such good news. HDB flat transactions have dropped to a 16-year low. The introduction of a new scheme where singles are now able to purchase new 2-room flats in non-mature estates directly from HDB, could also have been a contributing factor to the dip.  But perhaps smaller flats are still finding interest. The bigger, well-located flats may be more difficult on the pockets of potential buyers, especially with the recent loan curbs. Money is now not as easy to come by, and that could have posed restrictive on buying ability. COVs for these larger units have fallen to around $18, 000. The average in January this year was $35, 000.

What does this show and is it a sign of positive times to come? What will become of the resale HDB flat market in 2014 and will this dip continue as more new BTO flats continue to be launched?

HDB flats median COV lowest in 4 years

Not too long ago, COV (cash-over-valuation) prices of resale HDB flats were the talk of the town. Red hot and almost scorching. Burning holes in the pockets of buyers.

But now, median COV prices have dropped $2,000 from the previous average of $20, 000 in July. In January this year, it was at a thundering $35,000. And since April, resale HDB flat prices have also fallen 4 months in a row. It is speculated that most of the drop is due to January’s loan curbs which restricted the percentage of monthly income which could be used to pay off home mortgages.

Waterwoods Punggol ECIn addition, starting from July, singles were able to apply for new BTO flats directly from HDB and from the overwhelming response to the initial launch, many may have withdrawn from the resale HDB flat market. The lowest COV prices were for bigger HDB flats in the outside-of-central HDB estates. An executive condominium (EC) which was put for sale in the resale market in Punggol only had a $13,000 COV premium. At the other end of the spectrum, popular mature estates such as Bishan and Queenstown continue to command high COV prices. One of the highest recorded COV prices for a bishan flat was at $120, 000.

As the number of resale HDB flats being sold dip, the market is kept on its toes about whether COV prices will continue to drop as the supply of new flats and private properties continue to enter the market or will the potential resurgence of home prices once again cause a peak in COV prices as resale HDB flats seem the more advisable option?

HDB Goes Big

With 3 upcoming projects. Waterfront living. Integrated hubs. Sandy beaches. Regional hubs. These are but a few of the amenities which will await new HDB flat owners in Bidadari, Tampines North and Punggol Matilda.

Future Homes Better Lives35, 000 public housing units and 5, 000 private ones will be released over the next 10 to 15 years. That’s quite a bit to consider if you’re planning for the long-term and if you can afford the waiting time. Much of the focus of these new estates is on healthy living.

Here’s a quick look at what each new HDB project will potentially provide:

Bidadari :

  • 10, 000 new HDB flats
  • Man-made lake
  • 10-hectare park
  • Pedestrian walkway with canopy of preserved heritage trees

Tampines North:

  • 17, 000 new HDB flats
  • New integrated shopping mall cum  bus interchange
  • 2 new parks
  • Pond with sandy beach

Punggol Matilda:

  • 8,000 new HDB flats
  • Elevated landscaped deck with verandahs, colonnades and pavilion modeled after the iconic Matilda-House
  • New waterfront shopping mall

MND BTO HDB flat exhibitionAnd to boost community bonding, each estate will have a number of community gardens which will also promote healthy living where residents can grow their own produce. Carrying the green thumb message even further, cycling pathways, separate recycling chutes and energy efficiency features will connect the dots in HDB’s plans for new and improved future estates.

Already 500 units at Punggol Matilda will be available in September’s BTO launch. More will go on sale at Tampines North in 2014, followed by those in Bidadari in 2015.

Me, Myself and My HDB

Born and raise in an average income family in Singapore, I have never stayed in one of those nice big bungalow like some of my friends but I always thought to myself – if given a chance would I do that?

Hefner MansionWe all know it’s all cool and posh to stay at a nice big place where it’s away from the city where you can enjoy nice view and spacious area for your friends to join you, throw some party and have some crazy nights and all but isn’t cleaning or traveling in and out a little trouble?

Starks PlaceAnd it doesn’t really makes a lot of sense if you don’t like crowd and not many of your friends drop by no?

Wayne PLaceAnd looking back in my life I’ve always been living with my family in this small cosy local specialty call HDB and I enjoyed it a lot!

Punggol HDB SMith BLogI’ve heard some of my friends from overseas calling it a pigeon hole where a family of 4-5 squeeze within but it still gives us enough space and we are always a happy family so it doesn’t really matter as long as everyone under the roof is happy right?

I grew up in a 3 room flat at Chai Chee area where I shared a room with my brother. We spent a lot of time together in the room play toys, watch TV and doing our home work(which we try to avoid.) Although we do not have our own rooms, I very much enjoyed the company of my brother especially on nights where we couldn’t fall  a sleep.

We shifted into a 4 room flat soon after our younger sister arrived. My brother got his own room while I share my room with my baby sister. This place is the at Tampines where my mum is still staying. I had lot of good memories of that place. It is a very nice place as we have Macdonalds, super market and more within 3 mins walking distance.

Apart from this, I like the whole neighbourhood feeling where we get to know our neighbours and make friends. Although not as amazing as some of the stories I heard about the “Kampong Spirit”, I still did make a number of friends who stayed around the area.

I remember my childhood friend who stayed 2 units away from me. We do not study at the same school and in fact we have almost nothing in common besides the fact that we stayed side by side. I would look forward to the playtime when school is over. We would sit along the corridor and show off our newest toys or run around the corridor playing our water gun. And his mum is always so nice and hospitable. She will invite me to her place in case such as me not bringing my keys and my mum is out. HAHA.

Although I’m currently staying with my wife, cats and dog, I really miss those days where I stayed with my mum, dad, brother and sister. No doubt it gives us a lot of privacy but I miss having my family under one roof! But erm.. not the part where my mum nags non-stop. haha.

Smith PlaceEverybody wish to have their “dream” home. It may be a big place, it might end up being a small place. Regardless of whatever type of place you are looking for, I am very sure there is a suitable one for you at!
Singapore is the country’s leading property website. They have the largest database of listings that cover hdb flat, property for rent, private apartments, condos, landed property, commercial property, newly launched projects and even overseas property. Ultimately, they are a smart search engine for property.

So here is my HDB Story. What about yours? Share with us your HDB story here and you get to win something too!! And if you dont’ have, you know where to find yours!

Mr.Smith, I LOVE MY HDB! Maybe not the loan. LOL.

This post was written by Smith and originally published at Smith’s blog.

2-room HDB flats for singles ?

Came across this article while reading news on the internet.

HDB launches 2-room flats in non-mature estates for eligible singles
An old news, i guess many would have already read it. It reported that for those singels who earn up to S$5,000 per month and are 35 years and above, can buy a 2 room flat, non-mature estates!

If i am not married by then, i might want to get one 2 room flat, plant some plants at the corridor.
I can watch them grow everyday..

Come to think of it, times and rules keep changing nowadays (if you notice..)

There are still a few things, that i truly miss.

I am missing the Dragon Playground near my current void deck, i am sure many would, and the younger people, might not even have a chance to see it, anymore.

Credits to photographer HERE.

Also still trying to find the Primary School friend who was staying few blocks away from me, and we used to send each other Christmas Cards, (Without using stamps, save money!!) through each others’ post letter box.

Next, the much often Pasar Malam or Night Market, happening at the void decks.
The nice food, cheap things you can buy… and of course, the famous 燕窝水 (Bird Nest Drink).

This one lah, you got drink before ?? =)

It was even much large scale (Uncle Ringo style) kind of events many years ago.. with the mini rides and mini games…

Nowadays, where got such pasar malam ? Soon it might just die off in Singapore, i predict.

I missed the old HDB kind of life, and events.

So much to miss, but life still have to move on.

Someday, i will also have my own house.
If i do, i wish i can have a big big house, would love my room to look like this!!

And my very own, movie room. ^^

If only, i have the MONEY.

Want to share your HDB story too ? Please do so !! =)

This post was written by Hong Wei and originally published at Soh Hong Wei’s blog.