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.

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.

Offers galore in blossoming EC market

Executive condominium launches in the recent months haev proved attractive to the buying crowd, especially after years of quiet on the ground.

But with 7 more launches planned for the later part of the year, will the market be poised for a saturation point? Or will buyers welcome the competition and options? Most of the new launches will be near existing EC sites in the North and North-east regions, which could mean stiffer competition for the developers.

Westwood ResidencesOne project which may however prove promising is the Westwood Residences in Boon Lay. Together with Lake Life EC, they could the only 2 executive condominiums in Jurong since 2010. The rarity, coupled with the pent-up demand could means buyers may be willing to pay slightly higher than average prices for units here as compared to ECs elsewhere. Property experts are expecting the median prices for ECs launched later this year to hover between $750 to $770 psf.

Currently, the average selling prices for ECs are at around $800 psf. But buyers have not been particularly responsive to this pricing level and with the introduction of thousands of new units over this and next year could bring the competition higher and prices lower. The dip in resale HDB and private condominium prices since the high in 2013, would also mean that ECs have to priced realistically in order to entice HDB upgraders and buyers.

As the market segments react to one another, the EC being hybrid between private and public properties, may also find themselves having to price themselves appropriately between these two market segments.

 

Resale HDB flats – Sales go up as prices do down?

2014 saw a record low number of HDB resale flats exchanging hands. It could be due to the effects of the property cooling measures, in particular the TDSR (Total Debt Servicing Ratio) framework set by the Monetary Authority of Singapore,  just starting to kick in. Buyers were more wary and more careful in weighing their options while sellers were still unwilling to lower prices. The tussle was just beginning.

SeaHorizonECBut this year, it seems one side is starting to give, slightly; especially for those who need to sell their current flat within the stipulated time of collecting the keys to their new flat, or face forfeiting their deposit. Prices of resale HDB flats have dropped 0.8 per cent in March this year, and the number of transactions increase from 1,148 to 1,349., As the number of new BTO (Build-to-order) HDB flats which will be launched this year decrease, buyers may also begin turning to resale flats to fulfil their needs. Prices of four- and five-room flats fell the most at 1.1 per cent and prices have been dropping since a year ago.

Property experts continued to stick to their forecast of a 5 to 6 per cent drop in resale flat prices this year, and hope for a higher sales volume than last year. It all depends on how the market fares from now till June, just before the traditional lull period of the Hungry Ghost Month.

Prices of rare HDB flats such as ECs (executive condominiums) remained high however, in fact showing a rise of 1 per cent last month.