1 in 5 first-time HDB Flat buyers opt for resale

CLementiHDBIt has become easier for first-time HDB flat buyers to secure a new flat directly from the Housing Board (HDB) but some are still opting for one in the resale market. 95 per cent of new Build-to-order (BTO) units are now reserved for first-time buyers. But yet figures have shown that 1 in 5 first-time HDB flat buyers are still choosing to buy a unit from the resale flat market instead of applying for a new one.

The decline in resale flat prices, the growing pool of available resale flats on sale in mature estates and the fact that more young buyers are willing to pay dearly for older flats to get the space and location they desire could all be reasons for the high numbers of first-time buyers choosing to buy resale.  Younger families prefer homes in better locations, perhaps also to be closer to their extended families, and they now have more available stock to choose from. For buyers buying a flat near their parents, they can also receive a $20,000 housing grant.

ClementiHDBflat3,441 Singaporean families purchased a resale flat with the aid of housing grants last year – that is almost 20 per cent of the flat purchases made by first-time buyers. The remaining 80 per cent applied for 14,273 subsidised units directly from HDB. Young couples who are eager to start a family may also choose to purchase from the resale market in order to skip the waiting period of 3 to 4 years which comes with the acquisition of a new BTO flat. The now-enhanced CPF Housing Grants also mean first-time buyers can get up to to $50,000 in subsidies.

Will this then mean that resale flat sellers can price up as demand does not seem to have waned? Not necessarily so, as the option of new flats are very much available to first-time buyers. There have however been recent transactions in popular areas where records were set for resale units – such as $1.04 million for a 118 sq m resale flat on the 39th floor of Clementi Towers.

The would-be Woodlands

The Woodlands of the future could very well be the “Star Destination of the North” and home to 10,000 more new units as part of the Housing board’s (HDB) Remaking the Heartland (ROH) programme.
HDB Woodlands
Photo credit: HDB
There are 2 components to building the new Woodlands and the entire redevelopment is scheduled to take between 5 to 10 years. The remake will include Woodlands Central which will integrate commercial and community units at Woodlands Central and Woodlands North Coast public housing development. It is yet undecided if the residential units at Woodlands Central will be public or private ones though they are likely to be popular as the site is situated near Woodlands MRT station.
The Woodlands North Coast Land parcel will also house a business park, the first cluster in the North. The new commercial cluster will also provide ample spaces for small and medium-sized businesses. The Woodlands Regional Centre will also be revamped and expanded upon, structuring it to become a new hub for Malaysian and Asean-linked businesses.
Woodlands is in the third batch under the ROH scheme to undergo redevelopment, after Toa Payoh and Pasir Ris. It is set to change the landscape in the Northern region quite extensively with 3 new MRT stations coming up under the Thomson East Coast Line, a new Healthcare complex which includes a new acute care hospital, community hospital and nursing home, and the North South Expressway scheduled for completion by 2026.

Paying more for older resale flats – Aye or nay?

National Housing Minister Lawrence Wong has recently raised concerns about transactions of resale flats with less than 60-years on their lease for above-market values.

The increasing number of such transactions in the resale HDB flat market seem to indicate that buyers are putting aside factors such as age of the flat (HDB flats have a 99-year lease) and favouring others such as location, size of the flat and even the possibility of the blocks qualifying for the Selective En Bloc Redevelopment Scheme (Sers). Under Sers, certain blocks of flats built on or around sites where land has yet to be fully utilised or developed are acquired by the government and demolished. The residents are granted a fixed sum of $15,000 for singles and $30,000 for families in the form of a Sers grant and also guaranteed a replacement flat in new blocks with a full 99-year lease.

KallangWhampoaHDBflat

But the authorities are warning against paying too much for flats which are older than 30 years, or with less than 60 years left on the lease, especially for younger couples.  Many buyers may be under the impression that the value of the bigger resale flats, some in locations which are becoming more developed and hip, will increase as time goes by. Some have purchased rare terraced units such as those in Whampoa or Queenstown and are confident of flipping them within the next half a decade for more. There will be those who will are counting on location to be the prime draw when they finally sell. Older resale flats are usually in mature estates with well-established amenities, schools and transport available immediately. Some buyers could also be in urgent need of a flat and are unable to wait for the ballot and construction wait involved with new Build-to-order (BTO) flats.

February’s dip in resale flat prices points to market stabilisation

February was a little slow for the resale HDB flat market as prices fell by 0.3% and transactions by 8.5%. This was following a promising start to the year. But industry experts are not too quick to dismiss the possibilities for the sector as the year moves ahead.

ClementiHDBflatThe slight dip last month was most likely due to the post Chinese New year lull which is a common occurence. Rather than being indicative of a falling resale flat market, the decline simply points at a stabilizing  market enironment. Though resale flat buyers paid about $2,000 less than market value across  the board, some HDB estates continued to clock more than 10 transactions and at prices above market value

In Bedok, some buyers paid $10,000 and more for their resale flats while in Clementi, some transactions closed at $4,000 above market value. That comes as no surprise as these are mature HDB estates where demand is high. There were also some recent private property launches in the vicinity, for example the Clement Canopy, which may have had some residual effect on the resale HDB  flat market.

Aerial view of HDB flats in Ang Mo Kio

Aerial view of HDB flats in Ang Mo Kio

There were however a couple of HDB towns which did not post as promising figures despite being popular locations for flat seekers. In Queenstown, the lowest below-market prices were clocked at $12,500,  followed by $10,000 in Ang Mo Kio. Prices of 3-room flats rose by 0.2% while executive flat prices fell by 1.7%. Overall, prices of resale flats in mature estates rose by 1.1%.

 

Plans for 6,000 new HDB units along East Coast Park

The new private condominium, Seaside Residences, and her sea views may have competition yet from the public housing sector in the form of new Build-to-order (BTO) flats along East Coast Park.

MarineParadeHDBflatThe authorities are looking at building 6,000 new BTO flats in the Bayshore district. The last public housing flats to be built here were in the 1970s – the current ones in Marine Parade which are wildly popular in the resale market likely for its proximity to many schools and the city centre, the sea views and the many transport options and amenities offered by this mature estate. With the upcoming Thomson-East Coast Line, properties in the area may become even more in demand with property buyers and investors. Resale HDB flats in Marine Parade have been known to fetch up to $900,000 in recent months.

In a 60 hectare plot bounded by Bayshore Road, East Coast Parkway, Bedok camp and Upper East Coast road, the Urban Redevelopment Authority (URA) has called for master plan pitches for the Bayshore district which will also include land area put aside for 6,500 private homes. The authorities are looking at developing the area into a residential, car-lite district. There has been concerns raised about the influx of population which might put a strain on transport networks, amenities and the Changi General Hospital in Simei. The future 12,500 new homes may possibly change the idyllic atmosphere this area is specifically known for.

Resale HDB market looking at a year of stabilisation

Transaction volume and prices of resale HDB flats dipped once more last month, following a rise in November. Prices of resale HDB units fell 0.3 per cent in December and 13.9 per cent fewer transactions were recorded in midst of the usual year-end quiet. A total of 1,364 resale flats were sold last month.

bishanloftecLarger units such as the executive flats and 5-room flats saw a bigger price decline of 0.9 and 1 per cent respectively. Prices of rarer 3-room and 4-room units dipped only 0.1 and 0.2 per cent. The steeper decline for the bigger flats could be due to declining private property prices, which may steer some buyers towards that direction. Smaller HDB flats are priced much lower than the same in the private property sector, thus the pool of buyers for these units are considerably more stable though now that singles can apply for 2-room flats directly from HDB, the pool could have diminished slightly.

5-roomhdbPrices of resale HDB units in non-mature estates fell the hardest at 1.2 per cent year on year, possibly due to competition from the rising number of private residences in the suburbs. In mature estates on the other hand, prices have risen 1 per cent. Overall, with prices fluctuation within the 1 to 2 per cent range, analysts consider the market stabilised after years of gradual decline since 2013. The market could be reaching a zero per cent change soon and with the current market levels remaining unchanged, buyers are beginning to take the opportunity to snap up units in the resale market when a suitable deal comes up. Resale transactions may rise up to 15 per cent this year.

Resale HDB flat market remains stagnant in November

Resale HDB flat prices have remained stagnant for the past couple of years, indicating that the market has stabilised. Though prices have increased by 0.2 per cent last month, sales volume has gone the opposite direction with a 5.3 per cent drop. The minimal rise is likely to be caused by buyers ready to complete transactions before the quiet festive year-end holiday season.

hdb-flat-rentalBetween permanent residents having a longer wait before they can purchase HDB flats and a closing gap between private non-landed homes and resale flats, the market is not looking a rebound anytime soon. As more new flats are being completed and more HDB flat owners receive keys to their new units and demand remains quiet, the scale between sellers and buyers may tip towards the latter.

Sellers of HDB flats in mature estates may fare better as prices here have increased 0.8 per cent in November. Location and proximity to schools, transport nodes and amenities remain the crucial factors in sealing deals. 1,585 resale flats were sold in November, down from 1,673 in October. In a year-on-year comparison however, 18,005 units have been sold, up from 2014’s 17,318 and likely to be comparable to 2015’s 19,306 units. The market stagnation is expected to continue well into 2017, especially as the authorities have not shown any signs of lifting the property cooling measures.

Last BTO flat launch of 2016 brings over 10,000 new units

Photo credit: HDB

Photo credit: HDB

Bringing 2016 to a close, the Housing Board (HDB) has truly brought in the goods with their last and biggest BTO and SBF flats launch this year with over 10,000 units.

The flats in this launch are expected to be particularly popular with applicants as they are in the popular up-and-coming Bidadari estate and also the mature estate of Bedok and Kallang/Whampoa. 5,110 new BTO units will be spread out between these 2 estates while the remaining 2,194 will be in Punggol. Close to 3,000 flats unsold from previous launches will also be put up for sale this time round. This includes executive flats and 2-room flexi units.

Photo credit: HDB

Photo credit: HDB

Earlier launches this year have included units in mature estates such as Ang Mo Kio and Tampines as well. Units in Bidadari have been favoured by young couples and families as it is in a good location in the city fringes, well-served by public transport and near a few schools. The Bidadari development, though new, will be considered a matured one as it is essentially part of the larger Toa Payoh estate. Although singles are now allowed to apply for new flats directly from HDB, they are restricted to only 2-room flats in non-mature estates.

Photo credit: HDB

Photo credit: HDB

Prices of the new BTO flats in the current launch range between $135,000 for a 2-room flat in Bedok to $503,00 for a 5-roomer in the same estate. A 4-room unit in Kallang is priced at $497,000. Prices stated are before the application of grants or subsidies.

The application deadline for this launch will be at 2359 hours on Monday, November 28. The next launch is scheduled for February.