First-time HDB flat applicants to get BTO flats sooner

For first-time home buyers who need a permanent roof over their heads may now get to live their dreams sooner.

PunggolBTOflatThe Housing Development Board (HDB) has committed to setting aside 1,000 Build-to-order (BTO) flats in non-mature estates for first-time applicants. These flats will be constructed regardless of whether HDB receives the optimum number of applicants, which means they will be ready in 2 and a half years, much sooner than the 3 to 4 years it usually takes.

BukitBatokHDBFlatThis new scheme was implemented together with a few other changes announced in the latest Singapore Budget 2017 which will elevate the home-seeking process for young families or couples looking to start a family. Prior to the change, the only other option they had was to look for one in the resale HDB flat market. The CPF Housing Grant has also been raised from $30,000 to $50,000 for 4-room and smaller resale flats, and to $40,000 for 5-room and larger flats.

The authorities have mentioned that these flats, though are to be ready sooner, will not be costlier than other BTO flats. In addition, a new common pool of flats that remain unsold after a Sale of Balance Flats (SBF) exercise will be put aside and sold at regular intervals with priority given to first-time households.

Budget 2017: Will higher CPF Housing grant lead to higher resale prices?

With a new budget comes a boost to resale HDB housing grants. In a Budget Statement last week, Minister for Finance, Mr Heng Swee Keat, announced an increase in CPF housing grant for first-timers applying for a resale flat.

Toa Payoh HDBThe increase is considerable, double that of the existing grant amounts in fact. First-timer families can now get up to $20,000 in grants, and first-timer singles up to $10,000. Previously grant amounts for both categories of applicants were at $10,000 and $5,000 respectively. Buyers are however worried that sellers may leverage on this fact and raise resale flat prices. Though it is possible that sellers may indirectly appropriate the differences in grant monies by raising selling prices, property analysts say the worry may be unfounded as the scale is still tilted towards buyers, at least for now.

And as the property curbs are unlikely to go anytime soon, plus many sellers and upgraders will have to let go of their flats within a specified period of time and many new public and private projects are reaching completion this and next year, raising the prices just to earn half the grant amount may mean the sellers are missing out on closing deals. And often in the property business, timing is everything.

SengkangHDBThe demand for resale flats is however on the rise, and the average period of time sellers take to find a buyer is narrowing to about 3 months. Prices may rise this year, but minimally, at a predicted 0.3 per cent. Sales volume however may rise as buyers begin to realise that prices are unlikely to fall any further. Industry experts foresee a 10 per cent increase in transaction volume, crossing the 22,000-unit mark.

 

Fresh Start Housing Scheme helps families start afresh

A new Housing board programme has been rolled out last December to help families own a HDB flat.

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Photo credit: Ministry of National Development

Aptly named the Fresh Start Housing Scheme, it is aimed at helping families who have once lived in subsidised housing and are now living in rental flats. They can now apply for 2-room flexi flats with shorter leases of 45 to 65 years, which means they pay less than the usual 99-year leasehold HDB flats secured directly from the housing board.

These will be a boost for lower-income families or those wanting to move on and up from the rental schemes. But as these rare 2-room flexi units are also made available to singles and senior citizens, they are one of the most popular unit types in the board’s latest BTO (build-to-order) sales launch. 713 such 2-room units were put up for ballot and the subscription rate was almost four times that with 2,894 applicants. First-time home buyers are also allowed to apply for grants of up to $35,000.

PunggolBTOFlat

Photo credit: HDB

There are however clauses in the Fresh Start Housing Scheme that limit qualifying applicants. Households applying under this scheme must have at least 1 citizen parent, 1 citizen child under the age of 16 and at least 1 family member must have had a stable employment for the last 12 months. The Ministry of Social and Family Development will also need to assess applicants and they must not have accumulated more than 3 months in arrears on their rental units.

Resale HDB flat prices dip in January

Though resale HDB flat prices fell by 0.3 per cent in January and is 0.1 per cent lower in comparison with the same month last year, industry players remain confident of a stabilising market for the rest of the year.

PunggolHDBFlatResale flat prices have already fallen 11.2 per cent since its peak in 2013, though prior to that, prices have already risen considerably within 3 years. Straining from the continued price decline were the 5-room and executive flats segments, in which prices rose 0.4 and 0.9 per cent respectively. And again moving in the opposite direction, while 3-room and 4-room flat prices were expected to remain mostly flat, they have fallen 0.6 and 0.5 per cent respectively.

Resale flat prices in mature estates also fell 0.7 per cent, which comes as a little of a surprise since they have always maintained their demand despite falling numbers. Could the fall be due to the government ramping up the supply of new build-to-order (BTO) flats in mature estates over the past few years? Possibly. The trickle-down effect works just as well in both private and public property sectors.

BellewatersECAs the price gaps between private and public homes close, the pool of options for property buyers becomes bigger and while some HDB owners are holding on to their units in wait of better times, some may be forced to sell as they move on to their new BTO units or to private properties they are upgrading to. The increase in resale units may put some pressure on prices and sales volume. Already the volume of resale units have fallen 13.9 per cent from last December. Tampines and Geylang registered the highest number of resale transactions closed with above-market prices of $4000 and $5,500 respectively.

 

2017’s first BTO Launch expected to be over subscribed

Could it be a sign that the Housing Board’s first Build-to-order (BTO) launch this year was on Valentine’s Day and that this launch is also the first time families can apply under the Fresh Start Housing Scheme? Perhaps the parallels are pushing it, but the 4,065 new flats in Clementi, Tampines and Punggol will no doubt provide a good start for couples hoping to start a family.

CLementiHDBPhoto credit: HDB

Out of the 4000 plus units, 1,603 will be in Clementi, 638 in Tampines and 1,815 in Punggol. This latest launch will also feature a number of 2-room flexi units which are popular with singles who are now allowed to purchase selected flats directly from HDB, and senior citizens. In fact, these were the most heavily subscribed units in the current launch.

Units in Clementi are expected to garner the most interest, with its proximity to the upcoming Jurong Lake District and schools such as NUS High School of Math and Science, UniSIM, Ngee Ann Polytechnic and the National University of Singapore. Four-room flats in Clementi are expected to start at $432,000. In comparison, prices of 4-room HDB flats in Tampines are considered affordable considering its mature estate status with four-room flats starting at $299,000 (before grants are applied).

TampinesHDBPhoto credit: HDB

Application closes today and analysts are expecting a four to five times take-up rate for units in Clementi and Tampines while Punggol might be twice oversubscribed. There are 731 two-room flexi units offered in Punggol and the projected subscription for these units is 5 times that number. Despite it’s isolated locale, Punggol is growing to be a busy business and lifestyle cluster, and thus more appealing to singles and senior citizens choosing to live close to their married children.

Fall of private home rents put dampener on market

Hana CondoFor the 6th month in a row, private home rental rates have fallen with an even sharper 1.3 per cent drop last month. In the HDB market, rental prices have however edged up by 0.2 per cent. The overall decline in rents is smaller in this market, at 3.7 per cent for the entire year of 2016. In the private property market however, for the whole of last year, rents have fallen 6.2 per cent and in a year-on-year comparison with January 2013, almost 20 per cent.

Not in particular good news for those who have been counting on rental yields to help with their multiple property mortgages. Plus a probable interest rates hike this year, the market could be looking at more sellers putting their property in auction sales or banks being more active in their mortgage auction sales. This could however work in the favour of buyers who have been looking for a home to live in. The closing price gap between private housing and higher-end resale public housing may also cause some contention and competition, with location and floor area possibly being the deciding factor for many.

KatongRegencyNot only has rental rates fallen, so has leasing volume. The number of condominium apartment leases fell to 3,691 last month, down 2.2 per cent from November’s 3,775 units. Last December’s leasing volume however is 17.1 per cent higher than in the same period in 2015. Overall, the rental market is weakening and investors can no only rely on rental yields to help tide them over.

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.