BTO Flats in less mature estates sold for more

Punggol Northshore, one of the latest BTO (Build-to-order) HDB flat offerings in Punggol, proved popular with young families and couples. The response may have been surprising 10 years ago, when the area was still underdeveloped and considered far-flung. But now, as the amenities have built up over the years, those who have bought units in Punggol and Sengkang in the earlier years are reaping the ripe profits.

Punggol HDB EstateMost of the resale HDB flats which sold in these 2 HDB estates have tripled their original purchase prices. Four-room flats in Sengkang once cost $205,000 but now they can sell for as much as $566,880 in average on the resale HDB flat market. The lowest recorded sale was $410,000, double its original price tag. Property analysts have placed the HDB price index at a 90-per-cent increase since the launch of the system in 2002.

Once costing buyers $178,000 at its highest in 2003, prices of these BTO flats have since appreciated over the past 10 years. Most BTO flats take 4 years to be completed, and buyers have to fulfil a 5-year MOP (minimum occupation period) before being allowed to list their flat in the resale market.

It was once thought that older flats in mature estates were able to fetch higher prices, but these newer BTO flats are beating them at their odds; mostly due to the young age of the flats which means they will also be in relatively better condition, have more years left in their lease, and possess a higher potential for growth in terms of property prices once the less mature township is developed.

Reduced BTO flats = Increased resale flat demand?

The number was 16,900 and now it is 15,000. The Housing Board has revised the number of new BTO (build-to-order) flats to be offered this year as the resale HDB flat market has shown signs of stabilising.

In the previous year or two, the increased supply of BTO flats has meant that more who qualify to apply for a flat directly from HDB have been able to secure one fairly successfully, which has reduced the demand for resale flats. Recent launches have even been undersubscribed for some segments – three-room flats in Sembawang and four-room flats in Bukit Batok. Second-timers have also been more successful in securing units in this year’s BTO launches and the pool of available units in the Sale of Balance Flats (SBF) has been growing.

BIdadari HDB

Photo credit: HDB

Prices of resale HDB flats have fallen 7.4 to 12.4 per cent since its peak in 2013. But the last quarter has indicated once more, a rising demand  for resale HDB flats, partly due to the lowered prices and the sense of the market bottoming out.

The next HDB BTO sales launch will be later this year in September, with 4,860 flats up for offer in Bidadari and Punggol Northshore, both of which are increasingly popular spots for young couples and families.

 

More go for Clementi HDB flats

HDB launches in mature estates have always been popular with applicants. And in their May launch this year, applicants are heading straight for the new BTO flats in Clementi. The application rate for 5-room flats in this HDB estate was at 13.1 per unit. 2,047 buyers vied for just 156 units. All this despite the Clementi flats being the priciest ones of the entire launch. 5-room units had price tags starting from $566,000. Property analysts have however expected such fervent response as the new flats were situated close to the MRT station and other amenities.

ClementiCrestHDB

Photo credit: HDB

But waterfront units at Punggol Northshore received quite a bit of attention as well, as the new town sees more development and potential growth. These flats featured the latest products by HDB – smart-technology HDB homes. Although not quite reaching the 13.1 rate for the Clementi flats, the 2.8 application rate for the Punggol flats (double the 1.3 rate for the last Punggol flat launch) already showed an marked increase in interest for flats in this area.

Overall, the recent launch had an application rate of 3.7 per cent, making it the most oversubscribed launch since July last year. Since HDB has reduced the number of launches this year, could future launches have similar reactions? How will that change the demand for resale HDB flats in the areas or estates surrounding the launch?

More singles going for new BTO flats

With a major sales launch by the HDB putting out more than 9,000 new BTO flats yesterday, the response from applicants has been strong, especially for 2-room flats and units in specific HDB estates.

ClementiCrestSince July last year, when singles became eligible for new BTO flats, albeit with restrictions, the demand for new 2-room HDB flats has been overwhelming. This may have pushed the authorities to release more 2-room flats this round. For flats in Punggol, where HDB launched their new smart-tech flats, there were 1.4 applicants for each 2-room unit. In Sembawang, the response was even more fervent with 2.1 applicants for every 2-room unit.

Over at Clementi Crest, the only new launch in a mature estate, the response was understandably higher with 2.5 applicants for every 5-room unit. There were only 156 units available. The main attraction could be its proximity to the Clementi town centre and Clementi MRT station.

Will the policy shifts eventually change the landscape for resale HDB flats, in particular the 3- and 4-room flats? Previously, demand for these smaller units could be said to have come mainly from singles and smaller families as well as Permanent residents. Resale flats selling under HDB’s sale of balance flats scheme were not as popular as before, with only 19 applicants for 127 units in the popular mature estate of Queenstown and 29 applicants for 3-room flats in Toa Payoh.

The next new BTO flats launch will be in August, at Punggol Northshore and Bidadari.

 

Smart and kind HDB homes?

HDB is launching a new type of high-tech flats or smart flats at Punggol Northshore. And they are rather kind on the pockets too, with prices starting at $28,000 for a 2-room flat (after subsidies).

These 2-, 3-, 4- and 5-room flats at Punggol Northshore will be launched tomorrow and will feature the infrastructure to install smart systems such as energy consumption monitoring systems or alarm and alert systems for the elderly.

Punggol-northshore.jpg;wae44a5d811a611cfaPhoto credit: HDB

The smaller, and markedly lower-priced 2-roomers may be just the thing for singles and the elderly living alone. Sized at 36 sq to 45 sq m, singles who apply for one alone qualify for the Additional Housing Grant of up to $20,000 and Special Housing Grant of $10,000. That’s a total of $30,000 off the $88,000 price tag of a new 2-room HDB flat at Punggol Northshore. Previous launches at Sembawang and Yishun consisted of even cheaper 2-room flats starting from $10,000 and $15,000 after grants have been applied.

But these new smart-tech HDB flats could be the new way to go for future HDB flats moving forward. And the launch at Punggol Northshore is situated near the waterfront and boasts of a seamless connection to the LRT, these coupled with the fact that the 4- and 5-room HDB flats are cheaper than resale flats nearby at $130,000 and $170,000; the response for this launch could be more than positive.

 

Resale and New HDB Flats – Price gap narrowing?

Have the price tag on new BTO HDB flats truly gone down, as the Minister of National Development, Mr Khaw Boon Wan has promised? Or are prices of new flats still considered high? What about resale flats?

WestRockHDB flatA recent survey has shown that most still think new HDB flats cost between $300,000 and $400,000 for a four-room unit. That is almost $100,000 more than the actual average of $295,000 for a new flat. Resale four-room HDB flats can easily range between $320,000 to more than $500,000 depending on location and floor area.

The average price of a new 3-room HDB flat currently stands at $186,000. But perhaps buyers have been using resale HDB flats as a gauge of value and have been expecting new BTO flats to cost between $200,000 to $300,000.

Since most of the individuals surveyed were willing to pay about 20% more than the actual prices of new HDB flats, what does this indicate about the resale HDB flat market? Are buyers getting used to the higher prices of public housing? Should the authorities work to keep new and resale flat prices as what they are? Is public housing truly affordable and has enough been done to keep the market just so?

Photo credit: HDB

 

 

Resale HDB flats in prime locations command high prices

Even though the resale HDB flat market seems to be following the general downhill trend of the property market over the last year or so, bigger and newer units in the town’s hottest locations are still bringing in big bucks.

Of the 20 five-room HDB flats which sold at over $900,000 this year, as compared to just one in the same period last year, 14 were from the lauded Pinnacle @ Duxton. The other sales came from units in Bukit Merah and Queenstown.

View from PInnacleAs units at the Pinncale@Duxton were only recently released into the market, after their statutory five-year MOP (minimum occupation period), part of the increase in sales could be accounted for by these units. At their time of launch in 2004, five-room units were only priced between $345, 100 to $439, 400. Prices have since more than doubled. With their astounding views (for a public housing facility) and close proximity to the CBD (Central Business District), chinatown and city centre, the reasons for their expensive price tags could hardly be disputed.

Most of the other flats which sold in Strathmore Avenue and Holland Drive, were also newer ones which came under the Selective En Bloc Redevelopment Scheme (SERS). These flats were newly built in order to house owners of older flats nearby which were scheduled to be demolished. Many of these owners were luckily enough to secure a new flat at almost no additional cost, and now are able to sell at a profit.

Other areas with a higher ratio of newer resale flats include the less mature estates such as Punggol and Sengkang. Here, the units may not command as high a price due to their far flung location and higher number of sellers. But that said, it could be early days yet and in years to come, another tune may be sung.

Yishun no backwater town

A somewhat laid back atmosphere that speaks of a slow and nature-filled life with occasional bursts of activity and energy describes the fringe township of Yishun. This HDB estate once was called “Ulu” (a Singaporean slang for being out-of-the-way and backward), but it has progressed nicely into the genteel gem it is today.

It seems to live life just the edge, growing and filling in a gap that straddles bustling and slow. Latest news of the redevelopment of the Yishun Central, with Frasers Centrepoint Homes taking the lead in building a mixed-use condominium and mall development, Northpoint City, in the vicinity, the Yishun area may be seeing a revival of sorts.

The EstuaryStretching out in a large area between Chong Pang, Sembawang and Yio Chu Kang, it has quite the space for development and expansion. Some of the current private properties already in its midst include Orchid Park, Lilydale and The Estuary. Newer residential developments include Nine Residences, Symphony Suites and the recently launched Northpark Residences.

There are a considerable number of HDB flats in the area as well, and property prices are considered reasonable and affordable. For now. New BTO (Build-to-Order) flats were also introduced into the mix starting from 2013, putting a good 9,500 units in the estate, including Yishun Greenwalk, DBSS ADora Green and Vista Spring.

From kampung to new town. The kampung spirit remains strong.