Rare landed public housing – HDB Terrace Houses

Who knew public housing was not always high-rise and towering 50-storey blocks.

HDB terrace houses are a rare commodity in modern Singapore and there are only 258 of these on the island. Two storeys, mostly in mature estates, and commanding high prices – most may not even have realised these gems were in their midst.

QueenstownHDBTerracePhoto credit: Queenstown.org.sg

A recent sale of a Jalan Bahagia HDB terrace house at $958,000 may rise eyebrows but considering the rarity and floor area of the unit (241 sq m), and recent sales of resale HDB units at the Pinnacle @ Duxton have already been closing on the $1 million mark, it is quite a steal indeed. It sold at a mere $370 psf and with 60 years or more left on its 99-year lease. In comparison, private properties in the vicinity sell at $2,200 psf. Earlier in the year, another such unit sold at $1.06 million. Previous sales include a 85 sq m unit which went for $760,000 in January; a 104 sq m unit at $875,000 in February and a 81 sq m unit for $708,000 in March.

Built decades ago by HDB’s predecessor, the Singapore Improvement Trust (SIT), these rare landed public housing units reside mostly in Jalan Bahagia in Whampoa, and Queenstown. Although the land can be taken back by the government anytime, and it is not a freehold private property (where the deed belongs to the home owner), these units are nevertheless much sought-after properties and provide the space and luxury of a private property at much less. Taking into consideration that there are an increasingly number of 99-leasehold private properties, being able to get your hands on one of these rare HDB terraced units is quite a coup indeed.

HDB resale prices – Upwards soon?

With property prices on the decline since almost a year ago, have HDB resale flat prices finally bottomed out?

Buyers seems to have caught on with the price drop and have been back on the hunt for units as the number of transactions in May this year indicated a 20 per cent rise compared to the same month last year. Prices have also shown a 0.2 per cent increase in March and have held steady in April.

Resale 5-room HDB flat on King George's Avenue with asking price of more than $700,000.

The property cooling measures rolled out by the government seem to have finally taken full effect since their implementation over the past couple of years. Since its peak in 2013, HDB flat prices have fallen 11 per cent.  Property analysts are expecting resale HDB flat prices to reach it’s bottom by the end of the year. Minister for National Development, Mr. Khaw Boon Wan, has previously mentioned a possible single digit fall in HDB flat prices this year.

How long the lower prices will be maintained is largely dependant on policy changes and buyers’ sentiments, but also on the private property market and the options made available to the buying public. It could be that the prices may remain stable for awhile with the number of sales transactions increasing as buyers take advantage of this window of opportunity.

 

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.

 

Resale private property prices dipped in April

Could it be that the competition from new properties are finally kicking in? Besides the property cooling measures such as loan limits and raised stamp duties, are buyers remaining cautious this year as they watch and wait?

NorthparkResidences2NorthparkResidences2Property analysts are expecting the property prices to remain mostly stable for the rest of the year, with buyers and investors beginning to suss out good deals and snapping up units. Further property cooling measures seem unlikely and any shifts in policy would probably be in favour of sellers. It goes without saying, this year might be the year of the buyer, but the next would be anyone’s guess.

In April, figures showed that buyers are no longer underpaying for properties and are purchasing them at market value. The biggest rebound came in District 16. The number of resale transactions, despite all the news about property prices and transactions falling, have been growing overall on a year-on-year basis. That itself is promising news for the industry and investors.

Thus the slight drop in resale private non-landed properties last month could be due to new launches such as that of Northpark Residences in Yishun. The relationship between new and resale, private properties and HDB flats, will always be symbiotic. But without a doubt, all will be tied to global and domestic economies and policy changes.

 

HDB Resale flats – More affordable now?

Have prices of resale HDB flats reached an acceptable level? Prices and sales volume have been falling, and with the time it has taken for the property cooling measures to sink in, are resale flats now more affordable?

As more executive condominiums (ECs) and Build-to-order (BTO) flats hit the market, owners of existing HDB flats who are upgrading or getting keys to their new flats, in particular second-timers, are pressured to sell their flats within a stipulated time period of 6 months. This, plus the fact that a substantial period of time of steady but gentle decline of resale flat prices may have instilled confidence in buyers who may either see the market as stabilising, with slight or no further chances of price drops.

Bellewaters ECHow much as price really dropped? In a year-on-year comparison, prices have dipped 6 per cent since April last year, and an 11 per cent drop when matched against the peak in 2013. Property analysts are expecting prices of resale flats in non-mature estates to fall a little further of 6 per cent whereas those in mature estates are expected to hold their own for the rest of the year. Three-room and four-room flats also saw a 0.3 per cent price rise while five-roomers and ECs fell 0.8 and 2 per cent respectively.

In the first quarter of the year, the rate of decline in HDB resale flat prices have been the lowest since the fall in 2013, at 1 per cent. This be a signifier of a stabilising market, though 2015 may be the year to watch in terms of future market trends. With the possible General Elections coming up next year, it could also be the calm just before the storm, whichever way the wind blows.

 

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

 

 

Slowing down of property market slowdown

The first quarter of 2015 has proved to be a slow one for the property industry. But the slowdown has lost some speed. Compared to the previous quarters, the decline for both private and public housing was at around 1 per cent for the past three months.

Property prices and sales have been slowing down since mid-2013. In the resale HDB flat market, prices have fallen for 7 consecutive quarters and private property prices have fallen 6 quarters in a row. What will the rest of the year hold for these market segments?

Northpark Residences1For the private property sector, property analysts are predicting:

  1.  A further dip in prices as the number of unsold units are on the rise.
  2. Continued fall in rental prices as more completed new homes enter the fold. The decline in the first quarter of the year was 1.7 per cent; rental prices fell 1 per cent in the last quarter of 2014.
  3. As interest rates rise, home owners and developers may be pushed to lower prices further to secure deals. The competition between resale and new properties may also heat up.
  4.  A 5 to 8 per cent fall in private home prices for the year as buyers delay their market entry, possibly waiting for prices to fall further before making a buy.

In the HDB resale flat market, the prospects seem slightly more positive:

  1. HDB resale prices are expected to fall at a slower pace of 4 to 7 per cent and perhaps even stabilise.
  2. But as more new BTO (build-to-order) flats and ECs (executive condominiums) are completed this year,  flat owners may feel the imminent pressure to sell their existing flats at lower prices in order to move into their new units.

A fall in home prices seem inevitable this year, but the good news may come in the form of increasing sales and reaching a balance between sellers and buyers in terms of home prices.