Complete Property Market Updates of Singapore

August 7, 2008

HDB upgraders hold key to property market turnaround

Filed under: General,HBD Reviews — Propertymarketupdates @ 3:33 am

Squeezed out of private home market for some years, they see their share rise again

HDB upgraders could once again provide the base for a recovery in private home buying, just like they did in 1998, property consultancy group DTZ argues, based on its latest analysis of caveats data which show an increase in these upgraders’ share of private homes bought in Q1 this year.

HDB upgraders accounted for 28 per cent of all private homes purchased in Q1 2008, up from a 22 per cent share in the preceding three months. Their Q1 share was also the highest in seven quarters, according to DTZ’s analysis of caveats released to BT.

‘This is in line with the current profile of private home buyers we’ve been seeing amidst a quieter market; they’re buying more for owner occupation rather than for investment.’ DTZ executive director Ong Choon Fah says.

‘HDB upgraders are price sensitive and very careful with their purchase. They’re waiting for the right opportunity,’ she added.

Mrs Ong compares the growing share of HDB upgraders in the private home-buying pie in Q1 2008 to the surge seen in 1998, at the trough of the last big property slump during the Asian financial crisis. In that year, HDB upgraders made up a whopping 60 per cent of caveats lodged for private home sales, up from a 42 per cent share in 1997 and 34 per cent share in 1996.

Another surge in HDB upgraders’ share of private home buying was seen in 2002, when it hit 59 per cent, after private home prices fell during the 2001 economic slowdown. Since 2002, HDB upgraders’ share has been slipping, hitting a low of 22 per cent last year. The falling share of HDB upgraders over the past few years has come in tandem with rising property prices – which squeezed them out of the market – and the emergence of more foreign buyers, industry watchers said. The first quarter of this year saw their share rise again.

DTZ’s Mrs Ong reckons HDB upgraders’ share of private home purchases should continue to rise in the coming quarters but this will also be a function of the type of projects developers launch. Typically, HDB upgraders go for mass-market developments in the suburbs.

‘They’re pretty comfortable living in their HDB flats and face no pressing need to upgrade to a private home. So upgrading is quite an aspirational thing; they’re not satisfying a need, but a want. They will buy selectively; it has to be a project that suits their lifestyle but it must also be priced attractively,’ Mrs Ong stresses.

‘Part of the reason developers have not been selling many homes lately is that they are not offering many mass-market projects at attractive price-points. They have not re-priced existing projects. It’s only for their new launches that prices are being set at the lower end of, or below, earlier market expectations,’ she added.

Agreeing, Knight Frank executive director Peter Ow noted that the level of activity in the HDB resale market is still healthy. ‘So mass-market condos that are reasonably priced should appeal to HDB dwellers aspiring to upgrade to private housing. These buyers are very price sensitive though,’ he said.

DTZ’s analysis, based on caveats captured by Urban Redevelopment Authority’s Realis system, showed that the total number of caveats lodged for private home purchases fell 40 per cent quarter-on-quarter to 3,066 in Q1 this year.

Amid the slower home sales, the number of private homes bought by those with HDB addresses also fell 25.8 per cent, from 1,145 units in Q4 2007 to 850 units in Q1 2008.

However, this decline was lower than a 44.4 per cent slide in the number of private homes bought by those who already have a private home address over the same period. As a result, the share of private homes bought by HDB upgraders rose in the first three months of this year.

Districts 15, 9 and 16 were the top picks for HDB upgraders who bought private apartments/condos from developers in Q1 2008. The most sought-after projects included Waterfront Waves in the Bedok area (District 16), Wilkie 80 (District 9) and Zenith in the Zion Road location (District 10).

Landed properties made up 13 per cent or 111 of the total 850 caveats lodged for private home purchases in Q1 2008.

Source : Business Times – 12 Jun 2008


HDB pricing policy limits impact of rising costs

Filed under: Construction News,General,HBD Reviews — Propertymarketupdates @ 3:19 am

Board trying to contain cost by simplifying some projects

CONSTRUCTION costs for Housing & Development Board (HDB) flats have increased but the impact on buyers is likely to be limited, due to HDB’s pricing policy and cost-control measures.

Speaking to the media at HDB yesterday, National Development Minister Mah Bow Tan said that ‘construction costs have gone up significantly both for the building of private as well as public housing’. According to him, construction costs may have risen 20 to 30 per cent in general.

‘HDB is trying to contain the cost as much as it can,’ he added. One way is to simplify some of its projects. The government is also withholding some projects to ease pressures on the construction sector.

Asked how much of the increase in construction costs would go to buyers, he said that ‘for new flats, it should not feed directly through to the buyers, but it will probably feed through indirectly as the market price of flats goes up’.

In a forum reply last year, HDB mentioned that the prices of new flats are based on the market prices of resale HDB flats, not on construction costs. ‘In order to provide affordable housing to Singaporean families, new HDB flats are priced below their equivalent market values,’ said the reply.

Mr Mah assured that the prices of public housing will remain affordable.

The squeeze in the construction sector is not likely to delay the integrated resort projects. Progress is ‘on track’, he said.

Mr Mah also expects demand for HDB flats to strengthen if Singapore’s population grows as it has over the last few years. ‘We are monitoring the situation, and as the demand grows, we are also increasing the supply.’

He pointed out, however, that ‘we must also always be careful that we do not overbuild.’

HDB yesterday launched 382 flats for sale at Straits Vista @ Marsiling under the Build-To-Order (BTO) system. The first HDB project in Woodlands town in recent years, Straits Vista forms part of the total BTO supply of 8,400 units planned for this year. The project will comprise 50 three-room units with an indicative price range of $116,000 to $164,000, and 332 four-room units from $184,000 to $257,000.

HDB will receive the United Nations Public Service Award for its home ownership programme on June 23 and Mr Mah was at the agency to celebrate the win. There are more than 800,000 HDB flats in Singapore, housing more than 80 per cent of the resident population. About 95 per cent of HDB households own their homes.

Source : Business Times – 11 Jun 2008

HDB’s challenge: low-cost housing, condo-like flats

Filed under: General,HBD Reviews — Propertymarketupdates @ 3:17 am

Board has to find ways to cater to the poor as well as those better-off, says Mah

AS THE population grows and becomes more diverse, the Housing Board will have to find creative ways to keep its flats affordable for low-income families but attractive for the better-off.

As it tackles this task, one concern is rising construction costs, said National Development Minister Mah Bow Tan yesterday.

He said costs are estimated to jump a further 20 per cent this year and they could start pushing up the prices of HDB flats. ‘Construction costs have gone up significantly…HDB is trying to contain the cost as much as it can.’

These higher costs will not directly affect the selling prices of flats, as the Board prices flats at a discount to market prices rather than based on cost, Mr Mah said.

But building costs will boost the market prices of flats, so ‘there will be some feed through’ to HDB prices.

‘We cannot escape that. But the important thing is, as salaries go up and prices are fixed at a discount to the market, flats will continue to remain affordable,’ added Mr Mah, who made a special visit to the HDB Hub in Toa Payoh yesterday to congratulate staff on winning a United Nations (UN) Public Service Award.

The HDB’s 44-year-old Home Ownership Programme was honoured for improving transparency, accountability and responsiveness in the public service. HDB chairman James Koh Cher Siang and chief executive Tay Kim Poh will accept the award at a ceremony held at the UN headquarters in New York on June 23.

Mr Mah praised the agency for its success over the past 48 years in moving Singaporeans out of slums into clean and modern flats. In its first five years, HDB built 50,000 flats; now there are 900,000, housing more than 80 per cent of the population.

He also pointed out the new challenges the Board is facing, including the key issue of helping more low-income families buy a flat rather than rent one.

‘Those with income of $1,000 to $1,500 a month, although they are eligible to rent a flat, I much rather they own a flat because from there they can build a base and own some assets,’ he said.

The cheaper two-room flats the Government has been building over the past few years will be ready soon, with construction to be ramped up, he added.

For those who cannot afford to buy even the cheapest flats, HDB will make available 20 per cent more rental flats over the next three years, Mr Mah said.

On the other end of the spectrum, better-off Singaporeans should also get to enjoy the ‘HDB experience’. To this end, condo-like flats are being built under the Design, Build & Sell Scheme in areas such as Boon Keng and Bishan.

HDB also launched a new Build-To-Order project at Marsiling yesterday. Straits Vista @ Marsiling is near Woodlands Regional Centre and is the first new public housing estate in Woodlands in recent years. It will offer 50 three- room and 332 four-room flats.

Applications can be made until June 23.

Source : Straits Times – 11 Jun 2008

July 24, 2008

Road Ahead for HDB: Meeting diverse needs of S’pore’s population

Filed under: General,HBD Reviews — Propertymarketupdates @ 3:08 am

THE road ahead for the Housing Board (HDB) is to meet the housing needs of a growing population with increasingly different needs and aspirations, said National Development Minister Mah Bow Tan on Tuesday.

HDB will also have to make the flats attractive for the more educated and more well-off Singaporeans, so that they too can go through the HDB experience. — ST PHOTO: ALBERT SIM

As Singapore welcomes a larger and more diverse population into its fold, he said the challenge for HDB is to find innovative ways to accommodate everyone in a comfortable way, without compromising our living environment and social cohesion.

‘Globalisation and the changing economic environment have also led to such issues as structural unemployment and a widening income gap. We will need to ensure that public housing can help achieve the twin objectives of meeting the housing needs of the majority of the population, as well as providing a social safety net for lower income Singaporeans,’ said Mr Mah during his visit to the HDB Hub on Tuesday morning to celebrate the UN public service award won by the Board for its home ownership programme.

As Singapore’s population ages, the minister said the HDB will need to focus on meeting the housing needs of the more vulnerable groups, such as the elderly and the lower-income, so that they can level up with the rest of the population.

At the other end of the spectrum, it will also have to make HDB flats attractive for the more educated and more well-off Singaporeans, so that they too can go through the HDB experience.

‘This shared experience of HDB living will become all the more important, as we strive to develop a collective Singapore identity,’ said the minister.

Mr Mah referred to a recent marriage and parenthood survey by the Ministry of Community Development, Youths and Sports, which revealed that the purchase of an HDB flat is a rite of passage for most Singaporeans.

It showed that 89 per cent of singles preferred to live in their own homes after marriage. For most, this would mean setting up their first home in a new or resale HDB flat.

‘The challenges for public housing today are different, but no less formidable than what we faced in the early days. Today’s environment is far more complex, with a more diverse group of flat buyers that have varying aspirations and income levels,’ added the minister. ‘In response, HDB builds flats to suit different budgets and preferences, with a range of flat types, designs, and locations to choose from.’

Upgrading aging flats in old estates

He also identified the upgrading and rejuvenation of older housing estates as another key challenge for the HDB.

With nearly a-third of the flats built before the 1980s, there will be more flats reaching 40 to 50 years old within the next 10 years.

Mr Mah said new, middle-aged and old HDB estates will be transformed into vibrant homes for Singaporeans under the HDB’s ‘Remaking Our Heartland’ programme.

‘Giving our HDB heartlands a major makeover is a key part of the Government’s plan to develop and reshape the Singapore of tomorrow. In the next 10 to 20 years, HDB will be embarking on plans to build a new generation of public housing,’ he said.

‘The urban regeneration of HDB estates will go beyond the current upgrading programmes in terms of scale and scope. It will transform the existing public housing estates and mark a new milestone in Singapore’s public housing programme.’

Source : Straits Times – 10 Jun 2008

HDB launches 382 BTO flats for sale at Marsiling

Filed under: General,HBD Reviews — Propertymarketupdates @ 3:04 am

THE Housing Board offered 382 flats for sale at Marsiling under the Build-To-Order (BTO) scheme on Tuesday.

The flats at Straits Vista @ Marsiling, near Woodlands Regional Centre, comprise 50 three-room and 332 four-room units.

Residents can also enjoy easy access to other amenities such as shops, parks, schools and a sports/swimming complex. — PHOTO: HDB

The three-room flats, with floor area of between 67 and 69 sq metres, are priced from $116,000 to $164,000, while the four-room units, with floor area of 93 to 95 sqm, will be sold at between $184,000 and $257,000.

They are expected to be ready by May 2012.

The HDB said the Marsiling flats are part of the 8,400 units planned for this year under the BTO scheme and are the first HDB project in Woodlands town in recent years.

‘It will help to meet the strong demand for flats in the northern part of Singapore, although the bulk of the new BTO flats will continue to be offered in Punggol and Sengkang,’ said the board in a statement on Tuesday.

The project is well served by Woodlands MRT Station and a bus interchange. Residents can also enjoy easy access to other amenities such as shops, parks, schools and a sports/swimming complex. It is just a 5-minute drive to the Bukit Timah and Seletar Expressways.

As BTO flats typically require a few years to complete, the HDB advises buyers to plan ahead for their housing needs.

Applications for the new flats can be submitted from June 10 to 23.

Wide range of affordable resale flats available

Buyers with more immediate housing needs can get a resale HDB flat, with eligible first-timers given a CPF housing grant of $30,000 to $40,000, as well as the additional CPF grant of up to $30,000.

The HDB says there is still a wide range of affordable resale flats available to meet the budget of most flat buyers.

Its records show that in the first quarter, 14 per cent of the resale transactions were conducted at or below market valuation.

Source : Straits Times – 10 Jun 2008

Chip Eng Seng unit bags $123.5m HDB contract

Filed under: Construction News,General,HBD Reviews — Propertymarketupdates @ 2:23 am

CHIP Eng Seng Corporation’s wholly owned subsidiary Chip Eng Seng Contractors (198 has been awarded a $123.5 million contract by the Housing and Development Board (HDB).

The contract is for the construction of five 25-storey residential blocks in Sengkang. The contract includes the construction of a multi-storey carpark with future community facility on the first storey, and a precinct pavilion. Work is expected to begin this month, with completion slated for 2011.

The contract is not expected to have any material impact on the group’s net tangible assets and earnings per share for the current financial year ending Dec 31.

This is the company’s second HDB construction contract this year. In January it announced a contract to build 1,394 housing units in Queenstown. The company has also undertaken two other HDB housing projects, one in Sembawang and the other being Pinnacle @ Duxton.

The group’s construction order book now stands at about $755 million. Said executive chairman Lim Tiam Seng: ‘With increasing demand for construction, we are confident of our prospects for the rest of 2008.’

Mr Lim further believes that the group’s construction division will continue to have a busy year ahead with tenders and construction work.

Source : Business Times – 10 Jun 2008

On the market – HDB Flats in Bishan

Filed under: General,HBD Reviews,Market Watch — Propertymarketupdates @ 1:47 am

IN THIS weekly column, we bring you a sampling of properties up for sale. In the spotlight this week: HDB flats in Bishan

#19-231, Blk 190 Bishan Street 13
What it is: An executive maisonette, 163 sq m
Price: $730,000, or $80,000 above valuation

A big open-air terrace makes this breezy four-bedroom flat a rare find.

It comes with a storeroom, maid’s room and family room, as well as built-in shoe and kitchen cabinets. The flat, which is about 21 years old and five minutes’ walk from Bishan MRT station, was fully renovated last January for $50,000.

#17-31, Block 290 Bishan Street 24
What it is: A five-room flat, 123 sq m
Price: $660,000, or $60,000 above estimated valuation

The owners of this 11-year-old flat put in false ceilings and combined two bedrooms. The flat gets morning sun in the living room and is less than 10 minutes’ walk to the Bishan MRT Station.

#23-96, Blk 286 Bishan Street 24
What it is: An executive maisonette, 149 sq m
Price: $700,000, or $80,000 above estimated valuation

This flat has just been renovated. The owners spent $80,000 to improve the lighting, wiring and toilets, and combined the two bedrooms upstairs to make a master bedroom with a study.

Source : Sunday Times – 8 Jun 2008

July 10, 2008

New HDB flats still below market rates

Filed under: Community Voices,General,HBD Reviews — Propertymarketupdates @ 4:02 am

I REFER to Monday’s letter, ‘New HDB flats priced too high’ by Mr Ho Koon Woei.

In pricing new HDB flats, the Housing Board’s main consideration is the prevailing market condition at the time of offer. Resale HDB prices have climbed in the past two to three years, in tandem with the overall upturn in the property market. Notwithstanding these increases, all new HDB flats are priced below their equivalent market prices, so buyers enjoy a generous housing subsidy.

The HDB also takes into consideration flat attributes such as location and design enhancements in pricing new flats. The $329,000 to $396,000 price range of the five-room flats in Punggol Sapphire reflects their superior design standards and prime location, and is net of the market subsidy given by the Government. Similar flats in Punggol go for about $375,000 to $430,000 in the resale market.

From the figures cited by Mr Ho, he is likely to be comparing flats under the recent Build-To-Order (BTO) launch in Punggol, with unsold flats re-offered in 2005 and 2006 under the Walk-In-Selection (WIS) for Punggol. The flats offered under WIS were balance units from earlier BTO projects. They might have less favourable attributes such as low floor units and those located further away from the town centre or MRT. In contrast, Punggol Sapphire is a premium project sited near Punggol Town Centre and MRT station. It comes with enhanced architectural designs, landscaping and better internal finishes. Most of the flats are also provided with features such as green balconies, planters and bay windows.

The HDB is committed to providing affordable public housing to Singaporeans, and will continue to offer a variety of flats of different sizes and designs in various locations to meet the diverse housing needs of its flat buyers.

Kee Lay Cheng (Ms)
Deputy Director (Marketing and Projects)
for Director (Estate Administration and Property)
Housing and Development Board

Source : Straits Times – 7 Jun 2008

July 8, 2008

Time-wasters steer clear of BTO projects

Filed under: General,HBD Reviews — Propertymarketupdates @ 4:48 am

HDB’s two new projects still oversubscribed but at half the level seen before change of rules

IT LOOKS like the time-wasters have got the message after the Housing Board tightened rules for flat applications.

The launch of 1,485 premium flats in Punggol and Sengkang closed on Wednesday with 4,050 applications – still oversubscribed but at about half the level seen before the new rules kicked in.

Some sales launches had become free-for-alls, with thousands of people who had no real intention of buying still lodging applications just to keep options open.

This was evident in the actual take-up rate for flats, which was sharply lower than the number of applicants.

Apart from creating an administrative headache for the HDB, such frivolous applicants also meant deserving buyers were pushed further back in the queue.

Now, a first-timer who twice rejects an offer to buy a flat at a build-to-order (BTO) or balloting sales exercise will lose his first-timer priorities for a year.

In other words, he will be sent to the back of the queue with the second-timers.

The shake-up has certainly made first-time buyers like Ms Lynne Huang, a 25-year-old teacher, more cautious.

‘The new rule is quite harsh, so home buyers like me really have to think twice before applying for any project,’ she said.

‘If I apply, it’s likely that I will buy a unit unless it’s on a very low floor.’

The amended regulations have raised fears that buyers offered leftover flats would be penalised, but the HDB has said it could be flexible if applicants at the back of the queue have good reasons for rejecting available homes.

HDB’s new rules had their first try-out in two new projects – Compassvale Pearl in Sengkang and Punggol Sapphire.

They were offered under the BTO system where flats are built once a certain level of demand is reached.

Compassvale Pearl received 977 applications for the 420 flats on offer, and Punggol Sapphire attracted 3,073 bids for 1,065 flats.

That put the ratio of applications to flats at 2.3 in Compassvale Pearl and 2.9 in Punggol Sapphire – roughly half the figure for projects launched earlier this year.

Applications for the Punggol Spring sale in February and Jade Spring @ Yishun Phase 2 in March were about five times the number of flats offered – or five would-be buyers for every home.

Punggol Spring received 2,765 applications for 494 flats, and Jade Spring @ Yishun Phase2 had 2,828 bidders for 576 flats, the HDB told The Straits Times.

Housing experts had anticipated the dip in applications following the rule change, but they still expect the take-up rate to remain strong due to real demand in the market.

PropNex chief executive Mohamed Ismail said buyers are now showing discretion in their applications.

‘But I think the more interesting thing to watch is the actual take-up rate, if demand continues to meet the supply,’ he said.

Mr Colin Tan, head of research and consultancy at Chesterton International, believes there is ‘a lot of pent-up demand’ in the market and it was likely the HDB could even see higher take-up rates from more serious buyers.

In the second half of last year, buyers took up about 54 to 72 per cent of flats in new HDB projects in Punggol, Sengkang and Bukit Panjang.

Unsold stock has reached an all-time low of 1,200 flats – a stark contrast to the 25,000 unsold flats at its peak.

HDB is ramping up supply to about 8,400 units this year – 40 per cent more than last year’s new supply.

Source : Straits Times – 6 Jun 2008

Fickle flat buyers diverting HDB’s time, resources

Filed under: Community Voices,General,HBD Reviews — Propertymarketupdates @ 4:44 am

WE WOULD like to thank Ms Tan Ai Li, Mr Adrian Bek, Mr Chua Chern Pin and Mr Adry Zamani for their comments and feedback on HDB’s new application process (May 24 and 28).

In recent sales exercises, HDB had seen significant over-subscription for new flats. However, some of the applicants did not book a flat when their turn was due, resulting in many flats being left unsold at the end of the exercises.

Many of such applicants had applied repeatedly for new flats in numerous sale exercises but declined to make a booking when called up. Processing their applications diverts HDB’s time and resources away from those with more urgent housing needs. HDB has, therefore, revised the application process to reduce the repeated non-selection of HDB flats in sales exercises.

In revising the flat application process, HDB analysed feedback from applicants who did not select a flat when their turn was due. Many of them indicated that the flat of their choice was not available, that they wanted to participate in other HDB sales exercises or switch to buying resale flats, or were not financially ready. This was despite HDB making available beforehand information such as the location, design, estimated completion dates and price ranges for flat buyers’ consideration.

The revised application process will encourage applicants to think through their housing plans and options carefully before they apply for a flat. Those with specific flat requirements in mind can also consider resale flats where a CPF Housing Grant of $30,000 to $40,000 is available for eligible flat buyers.

HDB will continue to monitor and review the flat application process regularly to meet the needs of HDB flat buyers.

Kee Lay Cheng (Ms)
Deputy Director (Marketing and Projects)
for Director (Estate Administration and Property)
Housing and Development Board

Source : Straits Times – 6 Jun 2008

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