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.

Properties up north gaining popularity

Up north in what was once woodlands is the growing township of well, Woodlands. The estate is groomed to be to the next Regional commercial and business hub where HDB flats, private condominiums and industrial buildings and regional offices reside, all in this area so close to our neighbouring Johor Bahru and where this rural outpost used to be densely populated with only rubber trees.

BellewoodsECTogether with the Seletar Regional Centre and the Punggol Creative Cluster, the Woodlands Regional Centre will form the North Coast Innovation Centre. The region will be efficiently serviced not only with the Woodlands MRT station and bus interchange, but also the upcoming Thomson-East Coast Line which is prepped for operation as early as 2019.

Some of the condominiums which have come up in Woodlands include Northoaks, The Woodsvale and the Bellewoods and Northwave executive condominiums (EC). The latter two being ECs, are rather prime properties as they hold the benefit of being both public and private housing,  Bellewoods EC, situated at the intersection of Woodlands Avenue 5 and 6, do not lack in the suite of amenities and facilities of any other private condominium. It has a clubhouse, indoor gym, tennis court, swimming pool, playground, jogging trail and waterside dining pavilion.

NorthwaveECAwarded the Highly Commended Best Executive Condo Development (Singapore) at the Southeast Asia Property Awards and with a TOP (temporary occupation permit) date of 2017, the 99-year leasehold EC consists of a mix of 2- to 5- bedders in all its 561 units. As it was launched prior to the resale levy rule implemented in December 2013, buyers who have previously purchased a subsidised HDB, DBSS or EC flat are also exempt from paying a resale levy which could be a huge plus as it could save them up to $55,000.

Resale HDB flat prices likely to remain at current level

After many consecutive quarters of market stagnation, buyers are coming to accept current resale HDB flat prices as the new norm.

solacresMany have remained in inertia as they waited for HDB flat prices to fall. But even with the introduction of massive new BTO flat supply, prices have not budged beyond the 11.3 per cent drop since the April 2013 peak. And property analysts are not expecting any further fall in prices, saying that the current resale flat prices are probably as low as they can get, especially as the government is closely monitoring the market in order to create some sort of balance between  individual profit and public housing provision.

Though the number of resale HDB units sold increased by 0.4 per cent in October, prices fell slightly by 0.1 per cent. Prices of the larger 5-room flats fell the most, at 0.9 per cent, though the rarer 3-room flats segment saw a 0.6 per cent rise and similarly a 0.8 per cent rise was reflected in the executive flat market as these units are in higher demand.

houganghdbThe past quarter has seen the resale HDB flat price index fluctuating within the 1 per cent range, with a fall in August likely due to the Hungry Ghost month, followed by some correction in September. In the months ahead, prices of HDB flats are not expected to swing either ways though the number of transactions may increase as buyers begin to realise that the numbers are unlikely to drop any further.

Home rental market softening

Rents for both HDB flats and private condominiums have been falling. The number of leases transacted per month have also dipped.

olina-lodgeThe weakening economic situation might be lengthening its stay as the job market remains soft and the hiring of expatriates is on the decline as well, indirectly affecting rental demand. The influx of new completed private condominium units and increase in number of HDB flats being sublet have also pushed rental prices and volume down in recent months.

In September, private non-landed property rental prices fell 0.6 per cent while HDB flat rents fell 0.3 per cent. In a year-on-year comparison, prices have fallen 4.6 and 4.5 per cent in the previously-mentioned property sectors respectively. Weak rental demand have also impacted property sales as resale private condominium prices have been reported to be shrinking, especially with added pressure from new completed units and new project launches.

hdb-flat-rentalStrangely however, core region property prices have increased despite the district leading the drop in condominium rents at 1.8 per cent. City fringe properties bucked the trend with a 0.2 per cent rise as the quantum rental might be more affordable to foreign tenants who also want to live in convenient and popular locales.

In the rest of 2016, the rental market may stagnant while in wait for the new year. As most of the completed projects were rolled out this year, 2017 may be the turning point for both the rental and resale markets. Property analysts are expecting rents to fall by a further 5 per cent before a possible rebound.

Government to strike a balance in HDB market

With the resale HDB flat market holding firm and prices of resale flats still high, the government has promised to look into shortening the wait for new HDB flats while monitoring the effect of exorbitantly-priced resale flats especially in the downtown areas.

Pinnacle DuxtonThe current wait for applicants of a new BTO (build-to-order) flat is now 3 to 4 years, with some having to wait as long as 6 years. But the wait may soon be shortened to 2 – 3 years, according to National Development Minister Lawrence Wong. For now, applicants who need a flat sooner are opting to ballot for units under the Sale of Balance Flats (SBF) scheme, usually from a pool of units in developments which are nearing completion but have yet to be sold.

Foreigners may be surprised by the high prices for public housing in Singapore (in most countries, public housing areas are rundown and hardly in demand). And while Singaporeans can be proud of a solid and stable public housing sector, the fact that prices were skyrocketing over the past decade, and could potentially happen again if not kept in check, has the government on their toes.

tampinesgreenhdbThe recent discussion about the high resale value and potential value-appreciation of HDB flats in downtown areas such as at Pinnacle@Duxton has resulted in proposals to have different resale market rules for these units – such as a longer MOP (minimum occupation period), higher resale levies and shorter lease periods. As of now, 18 resale units of the 174 transactions at Pinnacle@Duxton have been sold at $1 million or more.  Keeping the public housing system fair will take some skilful tweaking as the population and economic landscape of the future is vastly different from that of 40 years ago.

Hong Kong’s property market strong despite cooling measures

Unlike Singapore where the public housing sector is strong and almost 80 per cent of the population lives in a Housing Board (HDB) flat, in Hong Kong only 21 per cent live in a public housing unit and even then, it takes them a minimum of 3 years for a successful application. Though both cities have large population, the density is higher in Hong Kong where land restrictions are greater and unlike Singapore, they hardly have means of reclaiming land and expanding liveable space vertically is one of their only solutions. It comes as no surprise then, that unit sizes and liveable floor areas are shrinking.

hongkongpropertyMany could say that Hong Kong’s real estate fluctuations is very much like its undulating terrains, with steep climbs and equally slippery downhill slopes. Property cooling measures were rolled out in Hong Kong in 2012, around the same time as curbs were implemented in Singapore as well. But it still takes an average Hong Kong household 19 years to save up enough to purchase their own home compared to the 5 years for a Singaporean household.

Though property prices did fall in February, they rebounded to the levels comparable to 2015’s peak in September this year, possibly indicating renewed interest in Hong Kong real estate from mainland buyers. Numbers seem to show that more mainland Chinese are favouring Hong Kong properties over Singapore properties, possibly since Singapore’s property market has been seeing consecutive quarters of muted growth since last year.

 

Resale DBSS flats scoring high prices

Recent transactions of 3 DBSS (Design, Build and Sell Scheme) units at Park Central in Ang Mo Kio has almost reached the $1 million mark. For public housing, this is certainly a bit of a coup for the property situated near the Ang Mo Kio MRT station. But compared to normal 5-room HDB flats in Ang Mo Kio Ave 1 went for as much as $880,000, the $980,000 selling price for a 5-roomer at Park Central which just reached its 5-year MOP (minimum occupation period) in July this year sounds perfectly normal for this district.

parkcentralThe DBS Scheme was suspended in 2011 due to the soaring prices, culminating in Centrale 8 in Tampines, developers have been setting for these projects, which are privately developed though they are technically public housing. DBSS units can be sold once the 5-year MOP is reached. Some other DBSS projects which entered the resale market this year were City View @ Boon Keng, Natura Loft in Bishan and Parc Lumiere in Simei. A unit at the former was sold earlier this year at a record-breaking $1.1 million. One of the first DBSS projects which became eligible for resale in 2014 was The Premiere in Tampines.

Now could be the time for DBSS to take their time in the limelight as new HDB flats are incorporating more design features and condominium-like facilities and facades. Property analysts are expecting the DBSS gloss to lose its shine in about 10 years’ time.

 

Consumer awareness crucial for property industry

The local property industry landscape has been changing quite a bit over the past few years, in particular for the consumer. The authorities have been working on transparency and consumers now have more information at their finger tips, and perhaps even more as net prices of de-licensed projects’ will soon be available as well.

singapore-property-authoritiesCurrently, the Housing Development Board (HDB) and Urban Redevelopment Authority (URA) both provide property statistics and data on their websites. The Singapore Residential Price Index (SRPI) by the National University of Singapore (NUS) Institute of Real Estate also provides month-on-month transaction-based information for private non-landed residential properties.

ardmorethreeThere are however some caveats to take into consideration. URA’s quarterly price index for example, does not include the discounts and incentives which developers sometimes provide. Only the net-price will be recorded, thus consumers will do well to take this into consideration when viewing statistics and median monthly transaction prices. The change will take effect this month, which means the price index may have some downward pressure put on it as current figures may be inflated. De-licensed projects which have obtained their Certificate of Statutory Completion and thus do not come under the Housing Developers Rules, such as OUE Twin Peaks and Ardmore Three, are known to provide incentive schemes to their buyers such as 15% discounts and Additional Buyer’s Stamp Duty (ABSD) rebate.

A recent case of a property agent who handled and misappropriated cash handed to him by his client also brings to light that consumers may not be entirely aware of what they are entitled to or what their agents are allowed and disallowed to do. In brief, it is against the law for property agents to handle any cash on behalf of their clients.