Category Archives: HDB

Big drop in HDB resale deals as new rules bite

The number of Housing Board resale flats changing hands dropped drastically last month – a sign that the new cooling measures announced at the start of the year are beginning to kick in.
There were around 750 resale deals last month, the lowest activity in any month since the Singapore Real Estate Exchange (SRX) started tracking prices in 2007. This is less than half the 1,740 transactions in February last year.
The data also showed that overall median resale prices of Housing Board flats have dipped slightly, reversing the rising trend in the final quarter of last year.
While the Chinese New Year period usually sees a slowdown, property analysts also attributed last month’s dip to the market adjusting to January’s measures – especially the new rules governing loans for Housing Board flats.
That has made it harder to purchase larger units, limiting choice.
To prevent buyers from overstretching their finances, the Government capped mortgage payments to banks at 30 per cent of a borrower’s monthly income, and 35 per cent if they took a Housing Board loan.
Previously, there were no caps for bank loans, which saw some borrowers spend as much as 60 per cent of their monthly pay on mortgages.
The new cap affected those looking for larger properties more.
For example, a couple with a combined income of $8,000 who opt for a 30-year-loan would only be able to borrow around $570,000, given an interest rate of 3 per cent. This is half of what they could borrow in the past.
This couple may then have difficulty getting a centrally located five-room unit, which costs around $800,000, not including the cash premium paid above the flat’s valuation.
ERA Realty key executive officer Eugene Lim highlighted another factor – the 5 per cent additional buyer’s stamp duty for permanent residents (PRs) purchasing their first home.
PRs did not have to pay this surcharge before January’s announcements, which also disallowed them from subletting their whole flat after five years.
“This has resulted in many PRs, who make up 20 per cent of the market, sitting on the sidelines,” Mr Lim said.
According to SRX, overall median resale prices of Housing Board flats fell from $460,000 in December last year, to $450,000 now.
The Government has pledged to offer at least 23,000 new flats this year. Prices in the last BTO offering ranged from $140,000 for a three-room unit in Choa Chu Kang to $575,000 for a five-room unit in Ang Mo Kio.
Source: The Straits Times –8 March 2013

Suburban flat rents on the rise

Mass market apartments in the east and north-east part of the island were the star performers on the rental front in the fourth quarter last year.
Median monthly rents rose 2.9 per cent to $3.13 per sq ft (psf) in the three months to Dec 31.
Apartments in western areas such as Jurong managed rental increases of 2 per cent to $2.96 psf while suburbs in the north such as Woodlands saw a 1 per cent dip to $2.72 psf.
Over a longer period, homes in the west posted the strongest quarterly average rental growth of 2.2 per cent since the second quarter of 2010.
This is a touch higher than the 2.1 per cent average lodged by homes in the east and north-east and the 2 per cent by homes in the northern part of the island.
Experts say homes close to international schools and MRT stations are doing better with tenants.
But they point out that suburban rents are also rising as there is an increasing number of smaller-sized homes being built. Smaller units tend to be priced higher on a psf basis.
Thenmedian overall rents in suburban areas such as District 28 – which comprises Seletar and Yio Chu Kang – have been rising. Median rents for flats there rose 3 per cent to $3,200 a month in the fourth quarter from $3,100 in the previous three-month period.
Landlords also enjoyed rental gains in District 21, which includes Clementi and Upper Bukit Timah, and District 19, home to Hougang, Punggol and Sengkang. Median monthly rents in the fourth quarter last year were $3,450 in District 21, up from $3,400 in the third quarter. They averaged $3,400 in District 19, up from $3,350 in the previous three months.
Yishun Emerald was the top-yielding suburban project in the fourth quarter.
Completed in 2002, the 436-unit development had an average sale price of $697 psf and a median rent of $2.92 psf per month. This works out to a gross rental yield of 5 per cent. A three-bedroom unit of between 1,100 and 1,200 sq ft fetched a monthly rent of $3,600 in a lease inked in January.
Other high-return projects included Rivervale Crest in Sengkang, which had a rental yield of 4.6 per cent.
Source: The Straits Times –2 March 2013

HDB upgraders propel private home sales

Private residence purchases rose in 2012 primarily due to increased demand from public-housing dwellers, according to data from the Urban Redevelopment Authority.
17,590 of the 36,887 private residence transactions across all markets last year, or 48 per cent, involved buyers with HDB addresses. This marked a sharp increase of 17 per cent from the number of such transactions in 2011.
The increase in transactions largely took place on the primary market. The primary market was the only market to see both quarter-on-quarter and year-on-year sales growth, of 12 and 20.7 per cent respectively.
The number of transactions rose despite cooling measures last October that capped mortgage loan terms.
The popularity of private homes was driven largely by low interest rates and housing aspiration led.
Looking forward to the private housing market in 2013, the studies predicted that transaction volume would likely fall in the short term, due to cooling measures introduced in January this year.
A higher additional buyer’s stamp duty (ABSD) and tighter financing restrictions might cause buyers to adopt a wait-and-see attitude before committing to any purchases.
If anything, measures such as the increased ABSD would have the greatest impact on the prime segment of the market.
The more suburban and mass-market properties should remain affordable.
However, rental yields for private properties, especially condominiums, are less secure.
Source: Business Times –28 February 2013

More resale flats sold at close to $1 million mark

A new record has been set for Housing Board resale flats, with a 1,750 sq ft executive maisonette in Bishan changing hands for $1.01 million last month. It broke the previous record of $1 million, set by a 1,615 sq ft executive apartment in Queenstown last year.
Fresh data from the Singapore Real Estate Exchange (SRX), which collects transaction information from larger property firms, also revealed that such sky-high prices are not one-offs.
While only one resale flat transaction breached the $900,000 mark in 2011, there were 18 last year. This year, even before two months have gone, the number has already reached 18.
Property analysts said these flats, mostly in established estates, are still value for money on a per sq ft (psf) basis when compared to private homes.
They expect resale records to be broken when choice units like those at the Pinnacle@Duxton hit the market in the next two years.
The price of the 26-year-old unit on the upper floors of Block 194 in Bishan Street 13 is about $580 psf. A private property in the same area could cost between $1,200 and $1,600 psf.
According to the SRX, the overall median cash paid above a flat’s valuation is now about $34,000.
. Among the 18 transactions above $900,000 this year is a five-year-old, 1,180 sq ft, five-room flat in Jalan Membina.
The $925,000 price tag works out to be about $780 psf.
Most home buyers said they would not pay that much for public housing.
In response to the surging property market, the Government has pledged to offer at least 23,000 new flats this year, with National Development Minister Khaw Boon Wan promising to keep new flats affordable by unpegging their prices from resale flats.
In the latest Build-To-Order launch last month, prices ranged from $140,000 for a three-room unit in Chua Chu Kang to $575,000 for a five-room unit in Ang Mo Kio.
Source: The Straits Times –21 February 2013

More holding on to their HDB flats

A higher percentage of home owners are holding on to their Housing Board flats, reversing a trend that had been rising in the past four years.
According to data from the Housing Board yesterday, the percentage of home owners who sold their property within the year after it hit the five-year minimum occupation period (MOP) was 11.8 per cent last year.
It had been climbing steadily, from 4.3 per cent in 2008 to 18.3 per cent in 2011.
These figures are for flats bought directly from the HDB.
Property analysts say the drop can be attributed to various factors, chief among them being sky-high private property prices that deter HDB upgraders, and restrictions incurred after selling a flat.
Resale HDB flat prices went up 6.6 per cent last year, while private home prices increased by 2.8 per cent.
Since August 2010, private property owners have been required to sell their existing property if they wanted to buy an HDB resale flat.
But HDB owners who have fulfilled their MOP are allowed to purchase a private property and hold on to both at the same time.
That round of measures in 2010 also revised the MOP for letting out a flat from three years to five years.
In tandem, the number of flats being sublet out also dipped last year, according to the HDB.
Some 3.1 per cent of home owners let out their flats last year, compared with 4.8 per cent in the year before.
Source: The Straits Times –18 February 2013

Buyers home in on larger flats in mature towns

Larger flats in mature estates have once again drawn the most interest in the latest Build-To-Order (BTO) exercise, a trend that is likely to continue along with the promise of rising resale values.
When the most recent exercise closed last night, there were 12 applicants for every five-room flat on offer in Ang Mo Kio and six for every four-room unit there.
In Tampines, each four-room flat drew about seven bids.
With the Government’s promise to keep prices of new flats affordable, bigger units offer top prospects for price appreciation amid rising resale prices, analysts noted.
Last week, National Development Minister Khaw Boon Wan made it clear that he had delinked prices of new flats from that of resale units to keep them affordable for first-time buyers.
He had implemented the change since taking over the housing portfolio 18 months ago, and would continue to do so, so long as “property remains hot”.
For instance, prices of four-room units in Tampines start from $293,000 in the latest exercise, similar to last September’s BTO rollout where prices started from $305,000. Prices for resale counterparts in the area range from $440,000 to $481,000, according to the Housing Board’s website.
HDB resale flat prices have been climbing steadily after a slight dip in 2009 due to the financial crisis..
The overall application rate for the first exercise of the year, which offered 3,346 flats in six towns, is 3.5. The overall rates for the past three years, from 2010 to last year, had been 5.7, 3.8 and 2.9 respectively.
One reason could be the implementation of a priority scheme for married couples with children younger than 16, although the application rate for this group was not made known.
Now, 30 per cent of the BTO-flat supply is reserved for them.
In the past, they had to vie with other first-timers, including engaged couples.
Among the non-mature towns, Choa Chu Kang emerged as the poorest performer due to its location, while Hougang attracted the most bids as it was considered developed by many buyers.
Those who have yet to apply for a flat said they are assured that there is a strong supply in the pipeline.
HDB has promised to launch at least 23,000 flats this year.
Source: The Straits Times –5 February 2013