Resale HDB flat market’s continued stabilisation

For 2 consecutive years now, the sales volume of resale HDB flats have been on the rise. Since 2014, the number of transactions recorded for resale HDB flats have been increasing, from 17,318 in 2014 to 19,306 in 2015 and then 20,813 last year.

ToaPayohHDBflatResale flat prices are showing signs of stabilisation, with only a 0.1 per cent fall in 2016 from the year before. Though last quarter’s transaction figures fell 9.1 per cent, it could be due to the usual year-end lull as most were away for the school holidays. Akin to buyers’ sentiments and reactions in the private property market, HDB flat buyers have also been increasingly keen on closing deals as prices have been falling steadily since 2013. Most consider the market currently nearing or at the bottom of the property cycle and are thus more confident or willing to make the purchase at what they consider lowest-possible prices.

Despite the government ramping up supply of new BTO (build-to-order) flats for young couples and families, even including singles in their bigger scheme of things by providing them the option to purchase 2-room units directly from HDB instead of previously restricting them to only units in the resale market, there are still those who will require a unit sooner rather than later or do not quite qualify for new flats. These buyers will be the ones who prop up the market, though with the current cooling measures still in place, prices are unlikely to rebound anytime soon.

ClementiHDBflatProperty analysts are however hopeful that the number of resale flats transacted this year will be closer to the 21,000 to 23,000 mark. Resale prices have fallen to a level at which young couple and families find attractive or affordable enough to commit. A large number of HDB flats and suburban condominiums will also reach completion this year, which could mean more HDB upgraders will be looking to sell their existing flat in the resale market. And as rents are expected to fall as well, for the same reasons, the most optimistic outlook could be a 1 to 2 per cent price increase by end 2017.

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.

Fewer new HDB Flats to be launched in 2017

sembawanghdb-flatMore applicants have been successful in securing a suitable and preferred unit from the Housing Board (HDB) directly since the authorities ramped up supply a few years back. Come 2017, the supply flow of new Build-to-order (BTO) flats will be reduced by 1,000 units from 18,000 this year to 17,000. Some of the latter launches this year, in particular those in non-mature estates such as Sembawang and Yishun, have already seen lower application rates and the 10,000-unit stock of balance flats from previous launches is also rather high.

81d36c494a88405a9dbd5dad5c28924aPart of the reason for the trim could also be the slowing economy and the reduced pace of family formation. But unlike the long 3- to 4-year wait typical of most BTO flats, these newer launches could be launched by 2018 and be ready for occupation by 2020. With the declining local populus, tighter immigration policies and a rapidly ageing population, the Singaporean government is feeling the increased urgency in encouraging millennials to form new family units.

Most of the younger generation of Singaporeans prioritise acquiring a home and having children in that order. Being able to provide them with a home quickly will no doubt be crucial in the push for Singapore’s birth rate. The National Development Minister, Lawrence Wong, has however promised that the supply of new BTO flats will continue, albeit being adjusted according to demand, across both non-mature and mature HDB estates to provide applicants with a range of choices.

HDB flat prices rise slightly in November

A 0.2% rise in resale HDB flat prices may bely the fall in sales volume in November due to a possible trickle-down effect from heightened activity in the new Build-to-order (BTO) flat segment.

bidadariNovember’s launch of BTO flats was the largest in the year, with flats in Kallang/Whampoa and Bidadari garnering the biggest response from applicants. With flats in these areas oversubscribed, some may have decided to skip the wait and go for resale flats instead. The overall buying sentiment in the HDB market may have also received a boost from the launch.

In a year-on-year comparison, prices are however 0.7 lower than that in November 2015 while resale volume is 7.1 per cent higher. The figures are not surprising since resale HDB flat prices have been stabilising over the past year while sales volume is largely dependent on demand and the option of new flats. Flats in mature estates continue to command high prices and in that, the property cooling measures may not have had that kept selling prices high and most sellers are not in a hurry to let go of their flats, until the time when keys to their new flats are ready for collection.

NorthwaveECPrivate property prices may have declined in single-digit percentages, and while that narrows the gap between smaller non-landed private property units and more expensive public housing options such as executive condominiums (EC), resale flat prices have budged only slightly which may not be sufficient for those who fall between these price segments. Prices of resale HDB flats are expected to have up to a 0.5 per cent price rise in 2017.

 

Raised income ceiling for HDB grants – Help or Hurt

The income ceiling for the application of HDB grants was raised last year, and till date, the policy change has helped more than 1,500 household secure new or resale HDB flats. Previously, the income cap was $12,000 for executive condominiums, $10,000 per household  or $5,000 for singles. Following the adjustment in August last year, the income cap is now $14,000, $12,000 and $6,000 respectively.

Westwood ResidencesThe Housing Board has cited rising income and an increased demand for public housing as push factors for the change. Some property experts however feel that the move has hurt the private property market as these are potential private property buyers whom the market may have lost out on and whom may have cost taxpayer’s more burden. However, these buyers could also have been sandwiched between the public and private housing markets, unable to afford the latter nor the former without a CPF housing grant.

From the 11,833 new HDB flats and 6,464 resale flats sold within the last year, about 5 per cent and 15 per cent of the purchases would not have been made prior to the income ceiling revisions. The last time the income ceiling was raised by $2,000 was 5 years ago in 2011. The question remains if it is a matter of eligibility or affordability of existing public housing units which detracts a possible remaining group or groups of buyers who may still be unable to purchase resale units despite securing all possible grants.

 

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.

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.