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.


Tengah – HDB’s future model estate

There was Punggol, then Bidadari, and now Tengah. It looks ike HDB has big plans for the decade ahead and with 30,000 new BTO flats and 12,000 private homes in the pipelines, this new HDB town estimated to be the size of Bishan, will be setting new heights for future HDB estates. Though the new flats here will reach only a maximum of 15 storeys due to its proximity to the Tengah military airbase.


Photo credit: HDB

HDB is developing Tengah according to the government’s green and sustainable-living dictum, with a 700ha forest fringe surrounding the estate and a 5 kilometre forest corridor linking the town to the island’s western and central catchment areas. Living with nature will be the focus of this new township, it will also feature a host of community fairways, gardens, green play areas, walking and cycling paths and a car-free town centre.

hdb-bto-flats-roh-programmePhoto credit: HDB

The first of the Tengah flats to be launched will be in 2018 and transport-wise, the Jurong Region Line which is to be completed within the next decade, will be the town’s main connection to the rest of the island. The eco-friendly township will consist of 5 districts, namely – Park District, Plantation District, Garden District, Brickland District and Forest Hill District. Each district will be differentiated distinctively while still incorporating green features. The idea behind this is integration instead of replacement – keeping the identity of the current scrubland that Tengah is, spanning Jurong East, Choa Chu Kang and Bukit Batok.

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.

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.

Resale HDB flat prices rise in July

Resale HDB flat prices have been stabilising for sometime now, and last month showed a 0.7 per cent rise in prices despite a fall in sales volume. Most buyers were in the market to take advantage of the lower prices, perhaps before an official market price-rise occurs. Three-room flat prices rose the most at 0.6 per cent, with five-roomers following at 0.5 per cent and 0.4 per cent for four-room flats.

HDB flat Jurong WestThe public housing market may be seeing some changes in August as 4,800 Build-to-order (BTO) flats are made available for application in Hougang, Sembawang, Yishun and Tampines which could direct buyers’ attention away from the resale segment. Buyers were mostly those looking for good market deals, and home occupiers might be more interested in the new HDB flats instead. The new executive condominium flats coming into the market may have also diluted interest for similar resale units as prices in this segment fell 0.4 per cent.

HDB SERS West CoastHDB is also revving up its Selective En Bloc Redevelopment Scheme (SERS) where 8 blocks in West Coast Road will be the next recipient of the scheme. Residents will be relocated to surrounding blocks and mature HDB estates will see improvements such as upgrading of toilets, lifts and installation of elderly-friendly features.

Property analysts are expecting the number of resale flat transactions to fall this month as the Hungry Ghost Festival begins, but prices are expected to remain level for the rest of the year.

Fewer resale flats entering HDB market

A good number of new HDB flats have reached or will soon reach the end of the minimum occupation period (MOP), and despite the expected slew of relatively new resale HDB flats entering the market, the situation is contrary.

CIty View Boon KengPhoto: City view @ Boon Keng (credit: Hoi Hup Realty Pte Ltd)

Some units in prime locations and prime developments such as the Pinnacle @ Duxton and City View @ Boon Keng may have fetched record prices, but most owners are not in a rush to put their units up for sale as the resale market is currently slow.

In 2010, 1,338 units were sold within a year of reaching their MOP, about 13.7% of the number of newly eligible flats. By last year, there were only 388 such transactions, at about 6%. Though private property prices have fallen, the gap between public and private housing remains considerable; and with a slowing market, resale flats may not be able to command the prices of before.

Pinnacle @ Duxton was awarded the 2011 Urban Land Institute (ULI) Global Awards for Excellence. Image by HDB.

Pinnacle @ Duxton. Image by HDB.

The upperhand-tussle between buyers and sellers have been ongoing for the past 4 to 5 years, and the undercurrent uncertainty of late have not aided the situation. It may be a matter of “who blinks first” as buyers and sellers both wait out this iffy period. More flat owners are instead beginning to sublet their flats after meeting the MOP. The next big move which might shake things up would be possible changes to the property cooling measures.

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.