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21 May

Hougang goes private

Being a mature HDB estate means Hougang could be saturated in its housing and population. But this gungho town is certainly not satisfied to wait by the sidelines, in many ways. Real estate-wise, private properties are inserting themselves in a big way in this area made up of mainly HDB flats. Opening up the path for home buyers hoping to live in the HDB town, private properties are entering a market which has probably been long waiting for new players.

Riversails condominium.

Riversails condominium.

New projects in the area is expected to bring 2, 319 additions to the 12, 457 private homes already in the area. Current private condominiums and executive condominiums (ECs) include recent launches such as Boathouse Residences, Riversails, Parc Vera and Heron Bay. Prices of condo units in Hougang range from $840 to $920 psf, a considerably manageable entry-level pricing for upgraders and investors. Besides, R’ST Research director Ong Kah Seng considers the existing pool of HDB upgraders within the estate itself a ready audience for new properties. Nearby Punggol is establishing itself as a hub for waterfront living, but the buyers it attracts are mainly those from far-flung estates.

Resale home transactions within Hougang itself has been steady since Q3 of 2011. It has not gone above 200 units in a quarter, and this could be because the accessibility and availability of schools and amenities in its vicinity have kept residents close to home. Resale prices were also maintained at a $835 to $1,000 psf constant.

Midtown Residences at Hougang.

Midtown Residences at Hougang.

With the rise of popularity with mixed-use developments, its no wonder the latest Midtown Residences launch has appealed to investors. This project is situated near the Hougang MRT station and bus interchange and prices were sold at a premium of $1, 220 and $1, 660 psf. Although quite a bit higher than the average resale home prices of properties in the proximity, the location means units will command higher rents. Following in the footsteps of other mixed-use projects like Bedok Residences, Watertown and The Hiller, and perhaps also King Albert Park Residences, could it be the era of these multi-purpose commercial-residential developments?

15 May

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.

6 May

No quick-fix to managing HDB flat prices

So says National Development Minister Khaw Boon Wan.

Ever since the Government announced that new HDB flats will come at a lower price, HDB flat owners have been expressing fears of losing their nest egg should prices of flats drop. But as new flats are limited to only certain groups and limited in terms of type and location, will there necessarily be a drastic drop in resale flat prices and are we worrying too early? Though the number of resale flat transactions have decreased, prices continue to remain high. And there will always be those who wish to choose a flat of their liking in a location they prefer, as opposed to trying perhaps numerous times in the HDB ballot queue.

HDB Flats THinkStockMr Khaw reassured Singaporeans that while prices of HDB flat will only drop “a few per cent over the next few years”, but in the same breath said that the prices of HDB flats cannot keep rising forever. “If housing prices keep rising,it won’t be good. When I came into the MND (Ministry of National Development) two years ago, that was my target”. And much has been done since then, with the ramp up of BTO flat supply, changes in income ceiling, limits on HDB flat sizes, increase in number of allocated flats for both first and second-timers, and even allowing singles to buy new HDB flats.

During the recent Our Singapore Conversation (OSC) dialogue, the idea of selling back new flats only to the Housing Board was faced with much opposition. Homeowners naturally worry that their homes will lose  their value and cut them off from the profit they can earn by selling it in the open market. Mr Khaw admits that resale flat prices are difficult to manage as they are largely subjected to the market demand. SLP International executive director Nicholas Mak speculates that one way of gently letting resale HDB flat prices drop is to decrease the prices of new HDB flats in the same estate.

Forestville Executive Condominium.

Forestville Executive Condominium.

Recent debate also surround the Executive Condominium (EC) scheme\. While some have said that those who can afford an EC should not receive subsidies from the Government, the scheme was specifically initiated to help those who may not qualify for other HDB subsidy schemes. Thus should ECs still be considered a value-added profit-making asset for their owners?

30 Apr

Changes to Exec Condo housing scheme?

2013 might be the year of housing policies shockwaves. Earlier in the year, news of singles being about to purchase new HDB flats directly from housing board stirred the market a little, then there were the limits placed on dual-key apartments which are now only available to multi-generational families. A cap was also put on the size of executive condominium (EC) units, at 160 sq m. ECs have been put under the microscope of late, with some questioning the amount of subsidies buyers are receiving from the government.

Forestville Executive Condominium.

Forestville Executive Condominium.

Certain members of public have questioned whether EC buyers should receive any government subsidies at all, since they are able to or willing to afford million-dollar units in both new and resale developments. The executive condominium scheme was initially set up by the government in 1996 to help families transit between public and private properties. But as the price gap between ECs and private properties now draw close, there has been a niggling thought about whether changes should be made to this scheme.

National Development Minister Khaw Boon Wan recently highlighted that there might soon be changes in the EC scheme and buyers and developers are poised to react. Forestville, the next EC to launch in June this year, might benefit from increased response since buyers might be leaping at what may very well be their last chance to secure a unit under the current conditions. EL Development‘s Lim Yew Soon has this to say: “Whenever policies change or are alikely to, the immediate launches will have the biggest benefits. There’s a good change that buyers may snap up existing ECs to ensure they still receive the grant.” Will resale ECs also benefit from this rush?

Should there be a drastic adjustment in government subsides, the most affected might be first-time buyers. Buyers and owners of existing ECs are imploring the authorities and public to see things from their point of view. Engineer Eddy Lau, 40, said, “It’s not right to just look at the profit we make. We also pay more in interest over the years for the EC. For us who are sandwiched, ECs are the only option to upgrade.”

Ultimately, the question that probably begets the Government is, what defines “sandwiched class” and what are the housing schemes actually meant to do. And perhaps only honest answers will help everyone fully understand and accept Singapore’s future housing situation.

26 Apr

The Battle of New and Resale ECs

Recent reports show that median prices of resale ECs have outperformed that of new executive condominiums. This is the first time resale EC prices have overtaken that of new EC units. Prices of executive condominiums across the board have risen over the past 2 1/2 years. Westmere EC in Jurong West has seen a rise of up to 40.6 per cent in median prices and Parc Oasis has increased 35.8 per cent in merely 2 years. There are 18 ECs in the whole of Singapore and 92,38 per cent of the 9,130 units available in the market has already been sold.

Parc Oasis condo in Jurong East

Parc Oasis condo in Jurong East

Surprising? Perhaps not. Property consultancy Jones Lang LaSalle proposes that the sheer number of new exec condo units being put up on sale in recent quarters have made pricing of new units more competitive. New units usually fetched a higher price as they had the maximum number of years left on the 99-year lease and everything came new and fresh.

What could be the reason for this recent takeover of interest on resale ECs? Location is the most likely factor. For example, Bishan Loft which is situated near the Bishan MRT station xceeded the $1,000 psf media price in Q1 this year. Another reason could be that new ECs cannot be sold until after the five-year minimum occupation period and thus have yet to enter the market.

Bishan Loft.

Bishan Loft.

Executive Condominiums (ECs) were a category of housing, a hybrid between private and public,  set up by the Government in 1996 to help the sandwiched class who neither qualified for public housing nor had sufficient money to enter the private property market. But perhaps the question we now need to consider is, where do the sandwiched class really lie? Can most of them now afford private, especially since there has been a considerable increase in the number of new units put on sale, and the line between private and executive condominiums are now sinking deeper and deeper into a grey pool or uncertainty?

17 Apr

The case of the shrinking condominiums

Unit size, that is. It used to be that a one-bedder in 2008 measured an average of 678 to 947 sq ft. From 2010, they measured 538 to 678 sq ft. When the minimum becomes the maximum, it may be the sign of times.

 

One of the latest new properties offered - Natura condominium at Hillview Terrace.

Natura condominium at Hillview Terrace.

Property developers have been shrinking condominium sizes to make them fit into the pockets of buyers. And these are not restricted by area, across the board, homes are getting smaller. Shoebox apartments have been the focus these past couple of years, but now, it’s not only the studio apartments which are put under the microscope. Two and three-bedroom units have also been getting the slice. For example, a three-bedder in Natura at Hillview Terrace measures 635 sq ft, that’s even smaller than the smallest one-bedder unit launched in 2008. And before 2008, the same would have gotten you 1,500 sq ft.

As Singapore’s population rises, the challenge to contain all in livable conditions fall not only in the hands of the Government, but also on private developers. High land costs, labour costs, material costs have all contributed to the situation. It’s either higher prices or smaller spaces. Or both. But does this mean buyers now pay less? As competition increase, property developers find themselves fighting for the same crowd of buyers, and trying to put out products which fit into their price points.

Midtown Condominium at Hougang.

Midtown Condominium at Hougang.

Most buyers are willing to fork out $1.5 million for their first or second home, especially since loan limits have been tightened in the most recent round of property curbs. But experts are less concerned about the small size of shoebox apartments than two and three-bedders. They have voiced their concern that while it is reasonable for one person to live in a 500 sq ft studio space, it may not be so for small families to live within 600 to 700 sq ft. And these not only apply to private condos, but also to ECs (executive condominiums).

The trend looks set to continue, but is there any more space left to shrink? What quantifies “livable” space and are Singaporeans getting the quality of life they need?

15 Apr

Executive Condominiums set for great heights

As new and resale condominiums, and prime and suburban apartments battle it out in the private property sector, the in-betweener is on a roll. A hybrid between private and public housing, Executive Condominiums look set to take lead in Singapore’s real estate market this year.

Twin Fountains Executive Condominium in Woodlands.

Twin Fountains Executive Condominium in Woodlands.

Starting us out is the Twin Fountains EC in Woodlands, launched last Wednesday. Units are priced between $580,000 for two-bedders and $1.26 million for a four-bedroom dual key unit. With 418 units across 8 blocks, each with 14 stories, Twin Fountain will be ready for occupation in 2016. It will be jointly developed by Frasers Centrepoint and Lum Chang.

With a substantial number of dual-key units available, response was naturally heated. 104 dual-key units will be built in this new EC development, and as the home buying trend goes, these are hot properties, aside from shoebox units in the private property sector and suburban non-landed residential properties preferred by most buyers and investors.

One has to take note that new rulings have recently been put in place for dual-key units in particular, to curb property speculation and making sure that the units go not to investors who are looking to rent out these two-entrances units with their potentially high-rental yield. Instead dual-key units will only go to multi-generational families. Frasers Centrepoint Homes chief executive Cheang Kok Kheong expects good response from the launch, especially since there has not been an EC launch in Woodlands since La Casa in 2005.

Forestville ECThe next Executive Condominium to look out for will be Forestville. Online applications for Twin Fountains will end on 21 April and successful applicants can look forward to booking their units on 10 May.

4 Apr

Executive Condominiums back in the fray

As the price gap between ECs and private condominiums continue to widen, more buyers are choosing the former. Why? It may not be because they are unable to afford a private condominium, but for the same price, they get more space in an executive condo. If you have $800,000 to spare, you can either get a 780 sq ft private condominium unit, or a 1, 100 sq ft EC unit almost the size of a 5-room HDB flat.

Heron Bay Executive Condominium in Upper Serangoon View.

Heron Bay Executive Condominium in Upper Serangoon View.

Current prices for private condominiums are above $1,000 psf. For ECs, they hover around $538 to $809 psf. At The Topiary in Fernvale, 185 EC units were sold for between $600 and $809 psf. Waterbay in Punggol went for slightly less at $538 and $73 psf. Heron Bay sold between $612 and $809 psf.

And what you get in an executive condominium may not necessarily be lesser than a private apartment. Ground-floot units, for example, at Heron Bay EC in Upper Serangoon have private pools with Jacuzzis. Sky terraces and many other fancy facilities are increasing the potential value and attractiveness of these public-private housing hybrids.

Topiary Executive Condominium in Fernvale.

Topiary Executive Condominium in Fernvale.

And not forgetting that ECs can be sold in the private property market after their Minimum Occupation Period of 5 years, why wouldn’t the competition in this sector be tough?The Government has already placed some  restrictions earlier this year, capping the size of EC units to 1, 722 sq ft and limiting the sale of Dual-key apartments (units with separate entrances) to multi-generational families. But will this be enough? Is this market something to watch for and will control be necessary? Will this trend result in an eventual increase the prices of executive condominiums or will it decrease the price of private condos?

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