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.

Consumer awareness crucial for property industry

The local property industry landscape has been changing quite a bit over the past few years, in particular for the consumer. The authorities have been working on transparency and consumers now have more information at their finger tips, and perhaps even more as net prices of de-licensed projects’ will soon be available as well.

singapore-property-authoritiesCurrently, the Housing Development Board (HDB) and Urban Redevelopment Authority (URA) both provide property statistics and data on their websites. The Singapore Residential Price Index (SRPI) by the National University of Singapore (NUS) Institute of Real Estate also provides month-on-month transaction-based information for private non-landed residential properties.

ardmorethreeThere are however some caveats to take into consideration. URA’s quarterly price index for example, does not include the discounts and incentives which developers sometimes provide. Only the net-price will be recorded, thus consumers will do well to take this into consideration when viewing statistics and median monthly transaction prices. The change will take effect this month, which means the price index may have some downward pressure put on it as current figures may be inflated. De-licensed projects which have obtained their Certificate of Statutory Completion and thus do not come under the Housing Developers Rules, such as OUE Twin Peaks and Ardmore Three, are known to provide incentive schemes to their buyers such as 15% discounts and Additional Buyer’s Stamp Duty (ABSD) rebate.

A recent case of a property agent who handled and misappropriated cash handed to him by his client also brings to light that consumers may not be entirely aware of what they are entitled to or what their agents are allowed and disallowed to do. In brief, it is against the law for property agents to handle any cash on behalf of their clients.

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.

Resale HDB flat prices down 0.1%

March saw a very slight 0.1 per cent fall in prices for the resale HDB flat market, mainly for 3-room and 4-room flats. This is following a 0.2 per cent rise in February and a year of stagnant prices.

Analysts are not expecting resale flat prices to go anywhere anytime soon as the slowing economy and continued property cooling curbs continue. Buyers seem to be favouring slightly smaller 4-room flats over 5-room units and any spike in the price index could be occasional and non-indicative of the overall market outlook.

21c0a7bf81e440299d0bd4b956642daaResale flats in mature estates have always been  popular with buyers, but even this market segment has been hampered by global and local uncertainties. There is good news however. Sales volume of resale HDB flats have risen in March despite the fall in prices. There were 451 more units sold in March than the 1,200 in February. The launch of new BTO (build-to-order) flats in February may have also taken some attention away from the resale market, though the latter will always find a place in the consumers’ radar as some buyers may not be willing or able to wait for new flats to be built or they may prefer living in locations other than those in which new flats are being launched or built.

The A-Bi-Cs of mature HDB estates

Bishan and Bidadari. Both mature estates and both in popular demand. The only difference might be that Bishan is more established while Bidadari is a new foundling in the already-mature estate of Toa Payoh.

The recent buzz around the centralised Bidadari estate has prompted many to call it the “next Bishan”. How exactly do these 2 estates compare?

BidadariPhoto credit: HDB

As far as history goes, Bishan was one of the first model HDB towns 30 years back. And now Bidadari, which means “angel” or “fairy” in Malay, seems to be taking its place as the next big thing. Both B-word towns have good city-fringe locations and are built on land which were once cemeteries. Bidadari will have the luck of having Bishan run its course with the stigma of living on cemetery land. Buyers of today are no longer as affected by this fact.

Even though property agents and analysts say they are unsure how resale prices and infrastructure in this new estate will pan out, the initial response is very positive. Both its November 2015 and February 2016 launches were about 23 times oversubscribed despite the more expensive sales tags. Its proximity to the city centre plus the 3 MRT stations (Potong Pasir, Bartley and Woodleigh) serving it, Bishan makes up for the difference only by its direct access to its own shopping mall, park and amenities such as sports facilities, library, community centre, offices and business facilities. The Bishan MRT station is also an interchange station between the North-South and Circle MRT lines.

Bishan HDB estatePhoto credit: HDB

Resale HDB flats in Bishan can go up to $730,000 for a 5-room flat. While the new BTO flats in Bidadari were launched at prices between $544,000 and $625,000, they look set to reach possibly higher resale prices once they are available in the resale market.


How deep is the property market well?

Property prices in Singapore have been falling since 2014, 10 consecutive quarters to be exact. In the first quarter of this year, HDB flat prices have stabilised at 0.1 per cent while private property prices have dipped 0.7 per cent. In 2015, HDB flat and private property prices fell an average of 0.4 and 0.9 per cent respectively.

Kingsford WaterbayPhoto: Kingsford Waterbay condominium 

HDB flat prices have begun to stabilise of late, though some property analysts are still expecting a further drop in the second half of the year as 25,000 new BTO flats reach completion this year. A good 30 per cent of these new-flat buyers are upgraders and home owners, not investors, which means they will be looking to sell their existing HDB flat in order to finance their new flat. This will bring a new slew of units into the resale HDB flat market. Though the demand for resale flats has not waned much, the rise in supply may put the ball in the buyers’ court.

 Photo: Clementi Gateway BTO flats

Similarly in the private property and EC (executive condominium) market, buyers will need to time their upgrading manoeuvre in order to manage cash flow, thus some may be in a rush to let go of their existing unit which could put further pressure on the market which will be seeing 21,906 new private condominium and 4,561 EC units enter its midst this year. How will the property sector perform in this crucial second quarter of 2016?