Resale HDB flat prices fall in August

Photo credit: HDB

Photo credit: HDB

Rather than a market rebound, the HDB flat market may have to be content with stabilising prices and sales volume. August saw a 0.7 per cent dip in resale flat prices, led by a 1 per cent fall in 4-room flats, over the past 3 months after a slight rise in July. 3- and 5-room resale flat prices also inched down 0.6 per cent while executive condominium (EC) prices rose 0.8 per cent. The price drop is seen in both mature and non-mature HDB estates.

The Hungry Ghost month may also have had something to do with the drop in sales prices as buyers tend to hold off buying during that month though units with lower selling prices may have transacted hence pulling the average median prices down slightly. Since the market peak in April 2013, HDB resale flat prices have since fallen 11.5 per cent.

Photo credit: HDB

Photo credit: HDB

Property analysts predict a level market for the rest of the year, with price sustainability at best and as long as the economic forecast remains unclear and overall property market sentiment weak, any price rebound will be unlikely. Sales volume has however been rising, a promising sign, though as more new HDB flats reach completion within the next couple of years, more flat owners will be pushed to sell within a specified time period and competition may once again push prices down.

Sustainable and Community-focused projects win HDB Awards

Sustainability and community were the main drivers behind the winners of the Housing Board (HDB) Design and Construction Awards. 11 projects won for the HDB Design Award category and 12 Construction Awards were handed out to construction firms who had done well in the workmanship and structural works area.

Skyville@DawsonNotable winners included SkyVille@Dawson by WOHA Architects and Waterway Ridges by Surbana Jurong Consultants. SkyVille@Dawson features sky gardens for every 80 homes, that not only introduces greenery to the urban landscape, but also provides an area for community gatherings and exchanges. There is also a roof garden which links the 47th floor of each of the 3 blocks and even includes a 400m jogging track.

Waterway Ridges is a massive housing project near My Waterway@Punggol consisting of 7 blocks with a total of 832 units. The blocks are staggered in height and water is the main feature in the development. Harnessing the beauty of rainwater, 70 per cent of this natural resource will be channeled into the waterway by way of rain gardens, vegetated marsh areas and dry pathways.

Waterway RidgesA couple of this year’s winners upgrading projects from HDB’s Remaking Our Heartland scheme and the Neighbourhood Renewal Programme. The first are town centres in East Coast and the latter an upgrading project in Simei Street 1.

New HDB flats in non-mature estate prove popular

BuangkokWOods1Usually it’s the new HDB flats in matures estates which receive the most applications. But in Wednesday’s launch of 4,841 new Build-to-order (BTO) HDB flats, it were the units in Buangkok woods in Hougang which caught the most attention. In the same launch were units in the mature estate of Tampines and also in the non-mature estates of Sembawang and Yishun. The price difference between 3-room HDB flats in the 2 estates differ by about $20,000 with those in Tampines starting from $202,000 and $185,000 in Hougang.

The lower prices may have been the deciding factor for HDB flat seekers. Units in Yishun were starting from $156,000. As of Wednesday evening, the Hougang flats were already seeing 6 applicants for every 10 units while the 2 projects in Tampines had 2 to 3 applicants for every 10 units.

ValleySpringYishunHDBIncluded in the launch were 2-room flexi flats, which are much sought-after by singles who are now allowed to purchase new flats directly from HDB but only in non-mature estates. As per other HDB flats, they have 99-year leases or shorter ones for the elderly. These popular property-types were almost completely subscribed for within the first day of the launch.

For young families and couples looking for a flat in mature estates, the next launch might prove worthy of the wait, with 2,910 units in popular HDB towns of Bedok, Kallang/Whampoa and Bidadari. The last on the list will probably be of most interest to buyers.

Applications for the current launch will close on Tuesday, 23 August 2016.

High demand for bigger units in mature estates

Senja HeightsAccording to response from applicants for the latest HDB sales launch of BTO (build-to-order) and SBF (sale of balance) flats, bigger units in mature estates seemed to be most hotly contested.

3,770 BTO flats were rolled out in last week’s launch, with units available in Ang Mo Kio, Bedok, Bukit Panjang and Sembawang. In addition, 5,170 SBF flats were also available for selection across 29 HDB estates. The units in Bedok and Ang Mo Kio were most in demand as these mature estates have well-developed infrastructure and some buyers who have lived there most of their lives prefer to move within the estate.


Photo credit: HDB

Will this mean a corresponding demand for resale flats of similar size in the same estates? It is debatable as prices of larger resale flats have already been falling as demand waned. As the availability of new units direct from HDB, and options of going into the private property market beckons, HDB upgraders will have quite a few pros and cons to weigh. While private homes within the same price range may be quite a lot smaller, rental and future value appreciation of selected private properties may entice buyers. On the other hand, upgrading within the resale HDB flat market may get you a larger unit though not necessarily with future sale benefits. Rental demand however could still be high should the unit be near a MRT station, school or other amenities.

The A-Bi-Cs of mature HDB estates

Bishan and Bidadari. Both mature estates and both in popular demand. The only difference might be that Bishan is more established while Bidadari is a new foundling in the already-mature estate of Toa Payoh.

The recent buzz around the centralised Bidadari estate has prompted many to call it the “next Bishan”. How exactly do these 2 estates compare?

BidadariPhoto credit: HDB

As far as history goes, Bishan was one of the first model HDB towns 30 years back. And now Bidadari, which means “angel” or “fairy” in Malay, seems to be taking its place as the next big thing. Both B-word towns have good city-fringe locations and are built on land which were once cemeteries. Bidadari will have the luck of having Bishan run its course with the stigma of living on cemetery land. Buyers of today are no longer as affected by this fact.

Even though property agents and analysts say they are unsure how resale prices and infrastructure in this new estate will pan out, the initial response is very positive. Both its November 2015 and February 2016 launches were about 23 times oversubscribed despite the more expensive sales tags. Its proximity to the city centre plus the 3 MRT stations (Potong Pasir, Bartley and Woodleigh) serving it, Bishan makes up for the difference only by its direct access to its own shopping mall, park and amenities such as sports facilities, library, community centre, offices and business facilities. The Bishan MRT station is also an interchange station between the North-South and Circle MRT lines.

Bishan HDB estatePhoto credit: HDB

Resale HDB flats in Bishan can go up to $730,000 for a 5-room flat. While the new BTO flats in Bidadari were launched at prices between $544,000 and $625,000, they look set to reach possibly higher resale prices once they are available in the resale market.


HDB Flats – Mature vs Non-mature estates

Bukit Batok HDB - WestplainsThis year, in response to the high demand for new HDB flats in popular and mature estates, the Housing Board will be including more mature-estate-based BTO flats in their sales launch.

In February’s sales launch, they have already included some in Bidadari and Bukit Batok. Bidadari is considered a mature estate, part of Toa Payoh and the units in the previous launched have flown off the shelves because of its prime location. It is part of a mature estate yet holds the exclusivity and unique nature-friendly environment and freshness of a new estate. 1,594 new Bidadari BTO flats were offered up in this month’s launch and 1,655 more in Bukit Batok. 921 units were also available in Sengkang.

Alkaff Oasis Bidadari HDBAs per the response to last year’s Bidadari sales launch, the five-room and 3-Gen flats, with a starting price of $550,000, in this new estate received the most eyeballs.

Although mature estates often have a space constraint and are unable to absorb more new blocks, HDB is looking at allocating half of their 18,000 units to be launched this year to mature estates. In May’s launch, the public can look forward to new units in Ang Mo Kio, Bedok and Bukit Merah. Most will be 3- and 4-room flats, there in Ang Mo Kio, 2-room flexi and 3-generation units will also be available. This may be good news for smaller families or singles and senior citizens hoping to live near their parents or children.

Who’s the most expensive of them all?

Hong Kong. When it comes to housing affordability. According to Demographia, a United States-based urban planning research unit, Hong Kong has emerged as one of the most expensive cities out of 367 metropolitan areas in 9 countries. Second on the list was Sydney, followed by Vancouver, Melbourne and Auckland. Singapore was 5th on the list.

Hong Kong property

Photo: Apartment in Viking Garden, Hong Kong 

In Hong Kong, median home prices are almost 19 times the median annual gross household income. It is the largest year-to-year increase in pricing over the 12 years in which the research was conducted. A small shoebox apartment below 500 sq ft would cost almost US$75,000 (or S$1.1million) in Hong Kong. That is almost double the price of such an apartment unit in Singapore. In the United States, only 9 metropolitan registered highly affordable housing prices, with San Jose, San Francisco, Los Angeles and San Diego being some of them. 14 other cities in the United States remained under the affordable level, with Buffalo, Cincinnati, Cleveland and Rochester tied in first place.

SF FlatPhoto: San Francisco apartment

With the US interest rates rising this year however, property analysts are expecting some change in the global property markets. Hong Kong’s property bubble may burst should the authorities do good on their promise to meet housing supply demand.

In Singapore, housing prices are 5 times that of the median annual gross household income. Although still considered ‘severely unaffordable’ under Demographia’s rating scale, HDB has been making efforts in the last couple of years to increase supply and reduce demand for public housing. For now, the price of a new HDB flat is still $150,000 to $180,000 lesser than a resale unit in the same area.


Resale HDB flat prices stabilising

HDB resale flat prices fell a mere 1.5% last year, buoyed by a 0.2% rise in the last quarter of 2015.

Skyline Bukit Batok HDB BTO FlatPhoto credit: HDB

With the lowered prices of resale HDB flats, there may be an increase in sales volume this year as buyers have found many of these sans-COV (cash over valuation) resale units more affordable. Price-wise, property experts are looking at a 1 – 2 per cent movement, with prices staying quite stagnant this year. More young couples and upgraders may also be moving into the private property market as the total quantum prices of units have come down to a much more palatable level.

According to Minister for National Development Lawrence Wong, resale flats are mostly selling at market value, with prices comparable to that of 2011. Some of the property cooling measures which have been implemented since that which have taken effect, and which may continue to do so include the mortgage servicing cap of 30 per cent, the 25-year maximum loan tenure limit, and a 3-year waiting period for permanent residents before they are allowed to purchase resale HDB flats. Demand may also have waned as singles are now able to purchase new 2-room BTO flats directly from HDB and 18,000 new flats are to be rolled out this year with the first launch in February.

Though this may point to the market bottoming out by end of 2015, two consecutive quarters of price increase is required before a clear sign of a market rebound can be confirmed.