Maxing the potential of HDB Housing Grants

The General Elections of 2015 have brought about some changes in the local housing and property scene. With raised income ceilings for new flats and executive condominiums, plus a series of other adjusted or new housing grants, more HDB flat applicants are able to now secure a unit and at less by making use of these new grants.

HDB flats 10The new Proximity Housing Grant provides singles and families who are buying a resale flat with or near their married children or parents, with a respective $10,000 and $20,000 grant. Since its implementation on 24 August, 684 families and 53 singles have applied for the grant. Income ceilings have also been raised to $12,000 (from $10,000) for families and $6,000 (from $5,000) for singles. This means more would qualify for a HDB flat and the respective grants, possibly allowing some applicants who may have previously fallen just short of the income ceiling to now successfully apply for a unit.

Indirectly, this move may have also helped to boost resale transactions. As applicants who wish to live near their parents or married children may not be able to find a new flat within close proximity, especially in more mature estates where new flats are rare, resale flats may be their next best choice. With a combination of the Proximity Housing Grant and other CPF housing grants, what they may finally have to pay for a resale flat may be much more palatable.

Demand for EC units slowing down

The Executive Condominium (EC) market seems to be facing some resistance from buyers. The pricing sweet spot in recent launches of Signature @ Yishun and The Criterion seem to be around  $750 to $780 psf respectively.

The most recent public housing policy changes include a higher income ceiling of $14,000, up $2,000 from the previous $12,000 for ECs. This may have an effect on the crossover pool of buyers who may well be able to afford private condominiums and may weigh in their options between both housing types. 20 per cent of the buyers for Signature @ Yishun fell within those with monthly household income above $12,000. Though more significant impact probably comes from the Mortgage Servicing Ratio and other loan restrictions.

Signature@YIshunThe Criterion is a 505-unit development built by City Developments and Signature at Yishun, a 525-unit project by JBE Holdings. That may also have thinned out the demand a little, as both are situated in Yishun and there are many points for comparison. Buyers may also be holding out in wait for the massive 12,000-unit BTO launch in November.

Although the sales may not be as fast and furious as before, with units being sold out within the launch period as buyers now tend to take their time in making comparisons and coming to a decision, the response will still be comparable.

Upcoming EC launches buyers can look forward to include Wandervale in Choa Chu Kang Drive and Parc Life in Sembawang.

The Criterion EC in Yishun

One of the latest executive condominium (EC) offerings certainly meets quite a lot of criteria for a good property. The Criterion EC in Yishun, jointly developed by City Development Limited and TID private limited, is set to yield 505 residential units by 2018.

TheCriterionThis new EC will feature units will range from two- to five-bedders and exclusive penthouses which offer scenic views of the golf course at Orchid Country Club or the Lower Seletar Reservoir. This new development will also offer flexi-units which allow buyers to select a room configuration that best suits their needs. Plus, a high percentage of the units will also have the optimal north-south facing orientation which most home owners look for to avoid the heat from the rising and setting sun and also allows for natural ventilation.

Its location also puts it in close proximity to the Yishun MRT station and bus interchange, the up-and-coming Northpoint City and a good number of schools, not to mention the Yishun Sports stadium and Sports Hall. Medical facilities in the vicinity include the Khoo Teck Puat Hospital and Yishun Community Hospital.

Buyers looking to book a unit can first view the show flat daily from 10am to 7pm, located near at the end of Miltonia Close. They will also be interested to know that The Criterion is the first EC to offer a microbubble spa from Japan aside from the range of more than 50 facilities promoting varied lifestyle activities such as yoga, cycling, swimming, starlight dining and community farming. How’s that for a modern living microcosm for you?

More launches ahead in the North-West

August proved to be a slow month for the private property market as the lack of new launches and the Hungry Ghost month made a tiny bump numbers-wise.

The number of homes sold were similar in a year-on-year comparison with 2014, and while it is comforting to know that the numbers are level, the overall primary sales figure of 7,400 units sold last year is below the ideal 10,000 to 12,000 units per year primary sales volume. The resale private property market is largely dependent on the primary sales market thus home sellers as well as developers are all hoping for more vibrant sales of new properties.

PrincipalGardenThe last quarter of the year may be more promising as there are a number of new launches coming up. This includes Principal Garden in Prince Charles Cresent, and a slew of executive condominiums (ECs) in the North and North-west, namely: Signature @ Yishun , Wandervale in Choa Chu Kang, The Criterion in Yishun and Parc Life in Sembawang.

The most recent EC launch was Sol Acres in Choa Chu Kang. So far, 259  units have been sold at approximately $787 psf. Despite the recently-announced increase in income ceiling for EC applicants from $12,000 to $14,000, the uptake for EC units seemed to have stalled somewhat, with an increasing number of units unsold.

Property analysts are chalking this up to a lull month, the location of the properties, tightening loan limits and the developers’ track records. But will the upcoming EC launches fare better?

Signature @ Yishun – New Executive Condominium launch

With crowds flocking to the show flat of the new executive condominium (EC), Signature at Yishun, it could be sign Yishun will be seeing a potential rejuvenation. This district will already have a new private condominium Northpark Residences, interconnected with the Northpoint Shopping Centre and bus terminal ready by 2018.

With the recently announced raise in income ceiling to $14,000 for EC applicants, it will not be surprising if this new launch, the first EC to be launched after the change, draws a high number of applications. Applications are open till September 20.

Signature@YIshunPhoto credit: 

Situated in Yishun Street 51, the 525-unit Signature @ Yishun EC will be quite near the Orchid Country Club and Lower Seletar Reservoir. Developed by JBE Holdings, which also has The Amore and SkyPark Residences executive condominiums under their belt, the new Signature EC will feature three- and four-bedroom units ranging from 764 to 1,302 sq ft. If prices of their previous EC launches were anything to go by, pricing of units at Signature will be around $800 psf or higher. Just next to this new EC project, another plot of land will also feature an EC by City Developments which has yet to be announced.

Yishun truly looks like it will see quite a bit of activity in the next decade or so. Will HDB flats in the district also enjoy the spillover benefits?

Waterfront living in public housing 

Not only do exclusive private mansions, bungalows, landed properties and condominium apartments or penthouses have waterfront views, public housing now offers such options, especially in the form of executive condominiums (ECs).

These hybrid property types begin their journey as public housing eligible for application under the Housing Development Board (HDB), and after 10 years, they become private condominium apartments, enjoying the benefits and price tags of private properties in the market. When they come with waterfront views and lifestyles, all the better.

Bellewaters ECA few of these EC properties include Bellewaters, and one in Punggol aptly named Waterwoods. Both situated in the new towns of Sengkang and Punggol, they seem targeted at young families and families who are looking to relocate or upgrade. With a projected temporary occupation permit (TOP) acquirement date of 2017, and now the raised income ceiling from $12,000 to $14,000 for ECs, it could be the prime time to seek out a good unit in potential EC developments. A bonus point for Bellewaters is that it was launched before 2013, thus the resale levy which is levied on home buyers who have previously bought a HDB flat or have taken a CPF housing grant does not apply here.

Waterwoods Punggol ECThere are big things planned for the Sengkang and Punggol HDB estates in the next couple of decades, including a North Coast Innovation Corridor with the Seletar Regional Centre and Seletar Aerospace Park in its midst, as well as the Punggol Creative Cluster and Learning Corridor which includes The Singapore Institute of Technology and links to the Punggol waterfront. The Punggol Waterway is also set to be a hub of commercial, retail and recreational activity.

Transport, though slightly lacking for now, will no doubt improve in time to come, and the new townships will have immense potential for growth.

Higher future demand for ECs?

Recent news of the income ceiling for new HDB and ECs (executive condominiums) flats possibly being raised have brought about a wave of questions from the market. Will this increase competition for new BTO flats? How will the resale HDB flat market be affected? Will the private property sector see lower or higher demand?

Since ECs and mass market private homes often go after the same pool of buyers, raising the income ceiling for ECs may mean increasing competition for the latter. With the higher income ceiling of $14,000, buyers who were previously ineligible for executive condominiums may now find themselves able to purchase these unique public-private hybrid properties, drawing them away from the private property market.

Sol AcresECs are considered public housing and buyers are able to take advantage of available housing grants for this property type. After 10 years, they become private property, which considerably ramps up their sale value. Buyers who have previously had to turn to private properties at much higher prices, and who are now eligible to apply for ECs will no doubt be in glee. The difference between an EC and a private property is about $300 psf and buyers comparing private homes and ECs in the same vicinity may come up with savings of up to $250,000. Not an amount to be scoffed at.

One recent EC offering, Sol Acres, have since sold 294 units. Upcoming EC launches are expected to give pricier private mass market homes without the calling cards of a good location, a run for their money. Prices of ECs usually stand at around $800 psf whereas private homes go from $1,000 psf and up.


Raised Income ceilings for HDB and EC flats

In the months ahead, the HDB market may see some significant changes.

In his National Day Rally speech on Sunday, Prime Minister Lee Hsien Loong announced a raise in income ceilings for new HDB flats as well as ECs (executive condominiums). The income ceiling for HDB flats could be raised from $10,000 to $12,000 and for executive condominiums, from $12,000 to $14,000. Just four years a, the income ceiling for ECs was raised to $12,000 but apparently income levels have risen since then. The government are also making it easier for lower-income households to purchase 2-room flats. The Special Housing Grant (SHG) will be raised from $20,000 to $40,000, giving them the financial support they truly need.

Forestville Executive Condominium.

Forestville Executive Condominium.

And to promote stronger familial ties plus cater to the growing group of young families who prefer to live near their parents, a new Proximity Housing Grant will help buyers who wish to live near their parents or married children secure their new flat.

This could be good news for buyers and home-seekers, as more applicants may then find themselves eligible for a new BTO flat or EC. But will there be more applicants now vying for available units. And how will this move  possibly affect the resale HDB flat market?