Moderation of HDB flat prices modest

HDB flat prices rose 50 per cent between 2009 and 2013. With the property curbs in the last 3 years, prices have fallen 10 per cent. The government are considering the decline moderate and have mentioned that it is not yet time to completely reverse the process and policies despite recent figures showing a stabilisation of resale flat prices and a rise in sales volume.

Yishun HDB

Photo: HDB flat in Yishun

The most effective cooling measures thus far have been the 2013 implementation of the mortgage servicing ratio limit. The loan amount home buyers were able to take to service a HDB flat loan was capped at 30 per cent of their gross income. On top of that, there was a 60 per cent Total Debt Servicing Ratio (TDSR) which was also introduced in 2013 to prevent borrowers from over stretching themselves with the number and amount of loans payments.

Industry experts are mostly in agreement about a sudden and drastic switch in policies which back backfire on the industry and property market. But some have felt that certain measures such as the ABSD (additional buyers’ stamp duty) could be lifted in phases to encourage property investment. The current rule requires foreign property buyers to pay an additional 15 per cent of the price of a property here while Singaporeans have to do the same but at 7 and 10 per cent for second and third subsequent properties.

The new National Development Minister Lawrence Wong has however mentioned that adjustments may be possible, depending on global and local economic situations.


Maxing the potential of HDB Housing Grants

The General Elections of 2015 have brought about some changes in the local housing and property scene. With raised income ceilings for new flats and executive condominiums, plus a series of other adjusted or new housing grants, more HDB flat applicants are able to now secure a unit and at less by making use of these new grants.

HDB flats 10The new Proximity Housing Grant provides singles and families who are buying a resale flat with or near their married children or parents, with a respective $10,000 and $20,000 grant. Since its implementation on 24 August, 684 families and 53 singles have applied for the grant. Income ceilings have also been raised to $12,000 (from $10,000) for families and $6,000 (from $5,000) for singles. This means more would qualify for a HDB flat and the respective grants, possibly allowing some applicants who may have previously fallen just short of the income ceiling to now successfully apply for a unit.

Indirectly, this move may have also helped to boost resale transactions. As applicants who wish to live near their parents or married children may not be able to find a new flat within close proximity, especially in more mature estates where new flats are rare, resale flats may be their next best choice. With a combination of the Proximity Housing Grant and other CPF housing grants, what they may finally have to pay for a resale flat may be much more palatable.

More BTO flats expected in 2016

2015 might have been the year the government slowed down the release of new BTO (Build-to-order) HDB flats to 15,000 as demand was deemed to have been fulfilled by the massive roll-out in the previous years; but 2016 might see a reversal as new National Development Minister Lawrence Wong announced last week that HDB will be building more new flats next year.

Clementi Crest HDB flat
Photo credit: HDB

Though the number of new flats will not be as massive in comparison to the 2011 to 2013 period when more than 22,000 flats were rolled out per year, the figure of just under 20,000 will still be considerable. This is largely to fulfil the increase demand that is expected to come with the recent policy changes. The income ceiling for BTO flat applicants have been increased from $10,000 to $12,000, which may mean that more families now qualify for a BTO flat. Add the new $20,000 Proximity Housing Grant which encourages families with parents or married children to live near to one another, and the numbers might increase significantly as well.

As the resale HDB flat market has only just stabilised after a year or so of declining prices, will this increase in HDB flat supply dampen the mood in the resale market? Probably not in the near future as demand for resale flats are still mostly in the mature estates, and most new flat owners are still serving out their 5-year MOP (minimum occupation period).

There will be a major sales launch of new BTO flats in November and the response to this will be used to temper the projection for next year.

HDB rolls out new smartphone app function

Taking a walk around a HDB estate and see a block you wouldn’t mind calling home? Now you can instantly call up relevant information and data such as resale prices by just using your smartphone.

Mobile@HDB Screen GrabThe Mobile@HDB app was launched in 2011, but has just recently had a revamp on 7 Oct. The mobile app is free and the latest augmented reality function uses GPS to identify blocks within a 200m radius to help users find out resale transaction details within a 2-year period. Although there is a 20m to 100m degree of error, property agents and home seekers will still no doubt benefit from this real-time app function.

HDB is hoping to make the home-seeking and purchasing process easier with their website and app revamps. Besides the augmented reality function, the Mobile@HDB app also has a concierge function which allows users to get a queue number remotely (as long as they are within the HDB vicinity, e.g. at the Toa Payoh MRT station which is near the HDB Hub) and even get a push notification when their number is called; and also check on their HDB appointments. Now more can be done without having to physically be at the HDB service centres.

Since its most recent update, the concierge function has been used 300 times and the augmented reality function 5,000 times. Users can look forward to an easier and breezier home search, and hopefully HDB will continue to improve on their customer service.

Photo credit: HDB


Sembawang – Quiet enclave bustling

It may be quite ironical that in such a small city-state like Singapore, there could still be areas considered “far-flung”. Sembawang used to considered one of these districts. But new condominiums, ECs (executive condominiums), landed homes  and HDB flats have sprouted in its midst within the last 10 years, injecting a comfortable buzz to the area. It still however holds its exclusiveness with some wonderful, untouched historic treasures and spots to call its own.

Sunway Avant PArc

Photo credit: Sunway Property

Near the Sembawang Road End region, in a quiet haven with its own sea-front view, sits a cluster of new 15 landed houses – Avant Parc. Owned by Sunway Developments, this 99-year leasehold development features 9 intermediate and 6 corner terraces each 3-storeys high and with up to 7 bedrooms, an attic, a basement and even a private lift. The estate is situated opposite the Sembawang Park, and just a short 6-minute drive away from Sembawang Shopping Centre and Sembawang MRT station. Some units have already been sold, and all have been completed and ready for immediate occupation.

Private condominiums have also been coming up in the district, including The Nautical which sits just next to Sembawang Shopping Centre and Canberra Residences. Public housing in the area include Skypark Residences, Parc Life EC and the latest Brownstone EC. Resale HDB flats are also becoming popular, with prices hovering between $390,000 and $460,000 on the average.

Sembawang is slowly being redeveloped but as one of the rare areas which yet still hold the rustic charm of old Singapore, it is a region with potential.


Property prices soften last quarter

Property market prices seemed to have fallen once again as Q3’s numbers show. Weaker market sentiments as well as a weakening rental market seem to have taken a toll on property prices and sales volume. Resale HDB flat prices were down 0.3 per cent and private property prices down 0.9 percent in Q3. In a year-on-year comparison, HDB resale prices have fallen 9.8 per cent and private property prices 8 percent since 2013. Property analysts have expected a drop in prices this year of between 4 to 6 per cent.

Queens Condo Stirling RoadWhile many private property owners may not yet be feeling the impact of the price decline, those who truly want to sell their property may be faced with the dilemma of dropping their asking price in order to close the deal. With more readily available industry information, buyers are now more aware of market prices and making more informed offers, which places the ball in their court.

The HDB resale flat market seems to be stabilising. Last month’s price decline is the smallest thus far, with the previous month seeing a 0.4 per cent drop. As most HDB flat buyers are able to service their loans using their property using Central Provident Funds (CPF), they may be less affected by a weakening economy and rising interest rates.

How the market fares moving ahead, will be largely dependent on the economy. The 1998 Asian financial crisis is a good reminder of how policies, jobs and industries are closely tied.


Will new housing policy changes raise HDB flat prices?

With the upcoming General Elections in play, the government as announced a number of changes in HDB housing grants and income ceilings. How will this change the resale HDB flat landscape? Will more be going for new HDB flats or be seeking out resale flats in mature estates to take advantage of the proximity grants?

A summary of the changes include:

The BrownstoneThough it may seem like buyers may be more keen to purchase resale flats especially in mature estates, property analysts are more prudent with their predictions, stating that as long as the cooling measures are in place, demand may maintain its current level. Sellers may be able to command slightly higher prices in more popular estates, but the rise in prices will be slow. Buyers are negotiating for prices closer to median prices or recent sale prices.

The number of flats sold last month had dropped by 6.8 per cent, partly due to the Hungry Ghost month when buyers hold off purchasing properties. Prices of four- and five-room HDB flats have however risen by 0.3 per cent while three-room HDB flat and EC prices dipped by 0.7 per cent.

Higher future demand for ECs?

Recent news of the income ceiling for new HDB and ECs (executive condominiums) flats possibly being raised have brought about a wave of questions from the market. Will this increase competition for new BTO flats? How will the resale HDB flat market be affected? Will the private property sector see lower or higher demand?

Since ECs and mass market private homes often go after the same pool of buyers, raising the income ceiling for ECs may mean increasing competition for the latter. With the higher income ceiling of $14,000, buyers who were previously ineligible for executive condominiums may now find themselves able to purchase these unique public-private hybrid properties, drawing them away from the private property market.

Sol AcresECs are considered public housing and buyers are able to take advantage of available housing grants for this property type. After 10 years, they become private property, which considerably ramps up their sale value. Buyers who have previously had to turn to private properties at much higher prices, and who are now eligible to apply for ECs will no doubt be in glee. The difference between an EC and a private property is about $300 psf and buyers comparing private homes and ECs in the same vicinity may come up with savings of up to $250,000. Not an amount to be scoffed at.

One recent EC offering, Sol Acres, have since sold 294 units. Upcoming EC launches are expected to give pricier private mass market homes without the calling cards of a good location, a run for their money. Prices of ECs usually stand at around $800 psf whereas private homes go from $1,000 psf and up.