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.

February’s dip in resale flat prices points to market stabilisation

February was a little slow for the resale HDB flat market as prices fell by 0.3% and transactions by 8.5%. This was following a promising start to the year. But industry experts are not too quick to dismiss the possibilities for the sector as the year moves ahead.

ClementiHDBflatThe slight dip last month was most likely due to the post Chinese New year lull which is a common occurence. Rather than being indicative of a falling resale flat market, the decline simply points at a stabilizing  market enironment. Though resale flat buyers paid about $2,000 less than market value across  the board, some HDB estates continued to clock more than 10 transactions and at prices above market value

In Bedok, some buyers paid $10,000 and more for their resale flats while in Clementi, some transactions closed at $4,000 above market value. That comes as no surprise as these are mature HDB estates where demand is high. There were also some recent private property launches in the vicinity, for example the Clement Canopy, which may have had some residual effect on the resale HDB  flat market.

Aerial view of HDB flats in Ang Mo Kio

Aerial view of HDB flats in Ang Mo Kio

There were however a couple of HDB towns which did not post as promising figures despite being popular locations for flat seekers. In Queenstown, the lowest below-market prices were clocked at $12,500,  followed by $10,000 in Ang Mo Kio. Prices of 3-room flats rose by 0.2% while executive flat prices fell by 1.7%. Overall, prices of resale flats in mature estates rose by 1.1%.

 

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.

 

Property cooling measures to stay put

National Development Ministry Lawrence Wong has recently mentioned that the curbs placed on the property industry are here to stay as demand for property not declined.

HillsTwoOneThough property prices may have fallen, the dip has been gradual and slow. Coupled with the fertile bedrock of low interest rate and affordable quantum pricing of residential properties, the authorities may be afraid of a sudden and unmanageable spike in demand from investors should the curbs be lifted anytime soon.

And their fears may not be entirely unfounded as the market has been showing budding signs of recovery in the past couple of months. Demand, in particular for smaller units in well-located properties, from local and foreign investors alike, have been on the rise while prices are beginning to hold steady. Pent-up demand from previous quarters of muted activity have meant a rise in sales volume.

SignatureECYishunBigger Central Provident Fund housing grants will be included in the upcoming Budget talks, which may sustain resale HDB flat volume as more buyers qualify for subsidies. Resale volume for the public housing sector has already risen 7.8 per cent last year. As demand for resale flat increases, so will pricing and sales volume. A stabilising resale flat market could also mean an increase in the number of HDB upgraders who are buying off the private property market, in turn boosting sales in the private housing sector as well.

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.

January 2017 – New HDB subletting rules kicks in

A new regulation in the subletting of HDB flats has kicked in, allowing non-Malaysian work permit holders from the manufacturing industry to only rent rooms and not entire HDB units. In force since the first of January this year, the rule may impact not only the workers, but also employers, companies and HDB flat owners who are leasing their units. The impact may be beneficial to some, and not so much to others as the government hopes that this move will push employers to provide better workers’ living quarters and also move them to purpose-built dormitories where their needs can be catered to more efficiently.

BukitBatokHDBAn estimated 3.5 per cent of HDB households will be affected by the rule-change though those currently renting a unit are allowed to continue with their current living arrangements until their leases expire. This is not the first time a change was implemented in terms of the leasing of HDB flats. In 2006, the same rule was first implemented with regards to non-Malaysian work permit holders from the construction industry, and again in 2015 to the marine and process sectors. Malaysian work permit holders are still able to lease entire flats or rooms.

Service sector non-Malayisian work permit holders are however still allowed to sublet entire HDB flats and the government will continue to monitor the balance between landlords and sub-tenants closely in order to make further adjustments when and if required.

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.