RESALE prices for HDB flats have smashed records for the eighth straight quarter with a surge of 4.1 per cent in the April to June period. Prices passed the 1996 peak back in 2008 and have not looked back since. And the march shows no sign of letting up, with median cash over valuation (COV) at a record $30,000 in the second quarter.

This is 20 per cent ahead of the $25,000 in the January to March quarter.

COV is the cash paid upfront by a buyer over a flat’s valuation, and is often an indication of demand levels. The HDB figures out yesterday show resale prices are almost 18 per cent above the previous peak in the last quarter of 1996. Meanwhile, the HDB said yesterday it launched almost 9,000 new flats in the first half – equal to last year’s total supply – and will launch another 7,200 in the second half to meet demand.

It will launch 1,000 new flats in Jurong West and Bukit Panjang this month. The total home supply will be complemented by 4,700 new homes under HDB’s design, build and sell scheme (DBSS) and recently sold executive condo sites. Despite this, resale activity keeps growing. Transactions hit 9,114 in the second quarter, up about 7 per cent on the first. Nearly all deals involved cash paid upfront. The percentage of resale transactions done above valuation increased to 96 per cent, up from 93 per cent in the previous quarter.

The pace being set by buyers and sellers has also prompted fresh concerns on whether the market is overheating. In estates like Queenstown the median resale price for an executive flat was an eye-popping $781,500 in the second quarter and $685,500 in Bishan. The median resale price for five-roomers was $682,500 in Marine Parade and $675,000 for Queenstown.

Associate Professor Sing Tien Foo of the National University of Singapore’s real estate department noted that apart from the price index surpassing the 1996 peak, it has also increased by more than 60 per cent compared with 2003 prices. He said that price increases appear to be supported by strong economic fundamentals for now, with demand coming from upgraders, downgraders, PRs and home buyers who cannot wait three years for new HDB flats.

As government policies on resale flats discourage speculation, this price growth is unlikely to be a housing bubble, observed ERA Asia-Pacific associate director Eugene Lim. Prof Sing added: ‘But if price rises continue unabated, we should be concerned. When deviations from fundamentals are too large, some corrections in prices could occur.’

Mr Lim noted that the robust resale market is having a spillover effect on private property as HDB owners can upgrade thanks to the relatively high prices they can get for their flats.
Values in the private property market rose 5.3 per cent in the second quarter over the first despite slowing sales. But as private property prices inch up, some buyers in that market could turn to the HDB resale sector, adding to demand, said PropNex chief executive Mohamed Ismail.

Some analysts believe prices have reached a new era. ‘Property prices move in cycles and prices will go up and down. But generally, it will move in an uptrend due to scarcity of land in Singapore,’ said Mr Lim. ‘Even if prices come down, I think it’ll still be higher than five years ago. It is unlikely we will go back to that level.’

While property agents say home buyers – especially first-timers – are getting increasingly disgruntled about blazing resale prices, some estates are still selling at levels below the 1996 peak.
PropNex agent Steven Ng, who recently helped a couple in their 50s sell a five-room Bishan flat for $615,000 – $70,000 above valuation – said the sellers were happy as they bought it at less than half that amount more than 10 years ago. ‘But some sellers in Bishan who bought at 1996 peak have still yet to see price levels at the price they paid,’ he said.

Source : Straits Times – 24 July 2010

new HDB flats

I imagine that, like many of you reading this, the only thing I really knew about the good people of the Economic Development Board (EDB) was that it was their job to persuade big business to set up shop in Singapore.

So I was incredibly impressed to discover the EDB had expanded its role to helping make sure the city’s next generation of public housing is among the best in the world.

It wants ordinary citizens to benefit from a strategy of inviting global firms to Singapore to develop and test-run new products that will eventually form the component parts of new HDB flats.

The statutory board is providing companies with space and resources in the form of “living laboratories”, EDB managing director Dr Beh Swan Gin told me when we met up recently.

It wants to create experimental spaces so co-innovation between the private and public sectors can flourish, he said.

These spaces are available to all kinds of businesses but special priority has been given to firms which can create products that will go towards the next generation of homes for ordinary people.

This might sound as if the agency whose role it is to pinpoint and pioneer economic opportunities for Singapore is crossing into Housing Board territory.

Not so.

The EDB’s mission comes hand in glove with the latest growth strategy of turning Singapore into a working model for new ideas and products that could shape the world’s future.

Dr Beh’s enthusiasm at the prospect of new technologies for future public housing is infectious and you can’t help but be struck by the EDB’s thinking.

It would surely also benefit the over 80 per cent of Singaporeans who live in public housing. What is also striking is that as they look to the future, Dr Beh and his team are clearly referencing the high points of HDB design over the past 50 years.

“When you think of HDB housing, it has always been progressive,” he told me.

“The way ventilation was created with the vortex system for maximum air flow to the design of public areas which were developed to foster neighbourly relations, our public housing was ahead of its time from day one.

“Our hope is that the next generation of housing will be just as innovative and we are looking to companies from all over the world to provide planning solutions in terms of design, energy efficiency and issues like the reduction of heat retention.”

Cherry-pick best ideas

Dr Beh was quick to point out the scheme’s other benefits. “Singapore gets to cherry- pick the best of the new products developed here. Whether it is a new design for housing, cladding for the outside of the building or technologies for inside the property, contracts for the next wave of HDB housing will be put out to tender with all these different companies competing.

“And should any of them not be successful then it has not been a waste of time. The chances are they will go on to sell their new products to other countries, like China or in Europe.” What’s great about the concept is that it is just as likely to open the door to local business as it is to produce investment from abroad.

Urban solutions is very much the buzz word for governments and businesses at the moment, as seen at the recently concluded World Cities Summit and Expo held here.

The inaugural Lee Kuan Yew World City Prize also saw the Spanish city of Bilbao recognised for its remarkable transformation in recent years. Bilbao demonstrated just what can be achieved when clear and fresh thinking is combined with a stop-at-nothing determination to cut through bureaucratic red tape and get things done.

The very fact that Singapore organised the event shows how much stock the Government here puts into innovative town planning.

Coming from the United Kingdom, where cities are crumbling because of failing leadership on town councils, I find the process here both refreshing and exciting.

Dr Beh admits Singapore does not have a monopoly on good ideas but admits that the living laboratory scheme is Singapore’s best hope of “overcoming challenges” and “maintaining the edge”.

One of the early successes of the project has been the development and trialing of solar panels on the rooftops of HDB blocks.

The $31-million trial will see solar panels attached to the rooftops of 28 existing HDB precincts and two new areas by 2015 in the biggest trial of its kind in Singapore.

Public housing, as managed by the HDB since the 1960s, has been one of Singapore’s greatest success stories. And after talking to Dr Beh and his team at the EDB, I cannot wait to see what the future holds for the next generation of affordable accommodation.

Some analysts expect demand to continue to rise in the next few months but said cash premiums are unlikely to go much higher than the current median of S$25,000.

The official figures confirm estimates released earlier this month.

Resale transactions have dipped by about five per cent while median cash premiums, or COVs, have risen at a much slower pace than in previous quarters.

They went up S$1,000 in the last three months compared to the jump of S$12,000 between the third and fourth quarters last year.

They now stand at S$25,000, with flats in Bishan fetching the highest COVs, of about S$32,000.

Strong demand for newer estates has also translated into high premiums.

Towns like Punggol and Sengkang are seeing premiums of about S$30,000.

Eugene Lim, associate director, ERA Asia Pacific, said: “If you compare Punggol, Sengkang prices vis-a-vis mature HDB estates, they are still cheaper. Even though with high COVs of around S$30,000, you find that S$30,000 actually is the average COV nowadays for most flats. So, if you’re paying thereabouts, why not get something newer versus something older?”

Analysts said measures to cool the market have worked including the launch of more HDB projects.

Other measures include restricting the cash portion of the second concessionary home loan, channeling the loan through the buyer’s CPF account.

Moving forward, ERA’a Eugene Lim said the government may consider further measures to ease demand.

And while some observers say possible interest rate increases later this year will hit buyers’ pockets, others disagree.

Jeffrey Hong, executive director, HSR International Realtors, said: “In general they don’t look at, ‘At the end of 30 years of loan, how much do I actually pay for my flat?’ The first-time buyers are more concerned about how much they pay on a monthly basis. So if the increase in the interest is not much, the increment of the monthly payment is probably S$20 to S$50 a month more.”

In the rental market, demand between January and March increased sharply, with transactions up 69 per cent over the previous quarter.

The HDB said subletting transactions went up from 3,902 in the last three months of 2009, to 6,606 cases.

Analysts said this is partly driven by foreigners returning to Singapore to work as the economy improves.

However, rents remain relatively stable, with median prices for four- and five-room flats hovering just under S$2,000 a month.

Analysts said this is partly driven by foreigners returning to Singapore to work as the economy improves while the HDB said the spike is also due to an increase in renewals of rental flats.

In the last three months, 2,323 flatowners applied to continue renting their flats, 19 per cent more than the previous quarter.

The HDB added that more homeowners are also aware that they have to apply to the HDB for approval which could add to the increase.

However, rents remain relatively stable with median prices for four- and five-room flats hovering just under S$2,000 a month.

ERA’s Eugene Lim said strong demand will not likely translate into escalating rents because the supply of flats that can be subletted is high.

Under HDB rules, flats can be sublet after a minimum of three years.

But analysts said there is no similar jump in demand in the private rental market, suggesting that rental budgets remain low.

In the private residential market, prices were up 5.6 per cent, marginally higher than the 5.1 percent hike initially estimated.

Source:Channel News Asia

Between January and March, the median COV for executive flats there was a negative $6,000, meaning a buyer paid below valuation – a far cry from the $50,000 median COV for the same flat type in the same area, in the preceding quarter.

But the first-quarter median COV for executive flats in Toa Payoh was a staggering $63,500. This was the highest COV sum in the Housing and Development Board’s list released on Friday, which broke down flat prices for the first quarter. In all three instances, HDB noted, the figures should not be taken as representative as there were fewer than 20 resale transactions in those towns for those flat types.

Indeed, overall, the median COV for the first three months of the year stabilised at $25,000 after a marginal increase of just $1,000 – compared to the fourth quarter of last year which saw the COV double.
And the HDB’s resale price index rose more slowly as well, by 2.8 per cent, as the number of resale transactions slipped 5 per cent – in large part, some analysts noted, due to the huge cash-out-of-pocket sums being demanded by sellers.

Generally, resale flats in Bishan attracted the highest median COV of $32,000, followed by those in Punggol ($31,000) and Marine Parade, Central and Sengkang ($30,000).

The COV rose for three-, four- and five-room flat types in Kallang/Whampoa, where a five-room unit which previously drew a $16,600 COV now commanded $40,000. The trend was similar in Clementi.

“It could be that market is playing catch-up and that that people have bought flats in anticipation of the Circle Line,” said Ngee Ann Polytechnic real estate lecturer Nicholas Mak.

In general, “COVs are still going up but at a much slower pace and they might be starting to reach a ceiling”, he noted. But prices overall would continue to rise as “the valuation of resale flats will also rise”.
For those short on cash, Woodlands, Pasir Ris and Geylang were their best bets, with the median COV ranging from $20,000 to $22,000.

To meet demand, HDB said it plans to launch about 12,300 new Build-To-Order (BTO) flats by September, with 1,100 to be offered next month in Yishun and Jurong West. In addition, a Punggol executive condominium site on the Government’s Reserve List will be put up for tender early next month.

Source : Today – 24 Apr 2010

The Government has already spent SG$3.4 billion in some form of upgrading for 150,000 public flats in these towns which include Ang Mo Kio, Bishan, Toa Payoh, Queenstown and Bukit Merah.

Wong, who is also Home Affairs Minister, said: “I can assure you that as long as we have the financial resources, the Government will continue to extend upgrading to all other households eligible for upgrading.”

These eight towns in the Central Zone have a total of 250,000 flats or a quarter of all HDB units in the country. Wong also took the occasion to remind HDB flat owners to be careful when selling off their homes for a tidy profit and that they should sell only after they have found a new place to live in.

“In today’s brisk market, some of us may be tempted to sell our flat for a profit,” he said. “Your HDB flat is meant for you to keep for the long term. It is a key source of financial security upon your retirement.”

Without elaborating, he added that there are various ways for home owners to monetize the value of their HDB flats when they are ready to do so.

Wong’s comments came weeks after a Bishan Street 24 penthouse maisonette became the most expensive HDB flat ever sold at a price of S$900,000.

Property prices have been on a high in recent times, and even resale prices of public flats are fetching previously unseen prices.

Long-time Bishan resident, Lee Ker Hwa, 49, who has lived in her five-room flat in Street 13 with her three sisters since 1987, is not planning to sell.

Lee added that her flat, which she bought for about S$99,000 back then, is now worth more than S$500,000. “Location is very important to me so I still would not sell my flat. It’s near to town and amenities are all nearby.”

Wong also said in his speech that HDB has gone beyond just providing mere physical buildings and structures to ensuring that policies and programs in estates enhance family and social ties.

SOURCE: The China Post

FOUR plum residential sites which will yield almost 2,000 new homes are being released for tender by the Government in a move to ramp up supply in Singapore’s hot property market.

They include Punggol’s first executive condominium (EC) site, to boast 615 homes, which will be released for tender early next month as a developer has already made a minimum bid of $147.7 million.

In stark contrast, when a Punggol EC site was launched in September 2008, there were no takers among developers.

The other three sites are for another EC – at Sengkang – and two private development sites at Sembawang and Yishun.

This is the latest round in a slew of sites being released by the authorities to inject fresh supply into the market.

Developers have been snapping up land to replenish landbanks as they scramble to meet dizzying levels of demand for new homes.

Sengkang HDB Flats

It also put two other sites in Punggol and Yishun on the reserve list for public tender early next month.

They are expected to yield about 1,970 dwelling units. About 60 per cent or about 1,215 are Executive Condominium (EC) units.

Market watchers told Channel NewsAsia that this supply of ECs will give the “sandwiched” class more room to choose.

Situated at Sembawang Road/Canberra Drive), the land parcel in Sembawang sits in an established private residential area.

It’s near Sembawang MRT Station and the bus interchange. It’s also close to neighbourhood shopping malls and schools such as the Singapore Sports School and Republic Polytechnic.

The site can be developed for landed housing, condominiums or flats, and can yield about 290 units. The tender for this site will close on June 8.

The land parcel in Sengkang (Sengkang East Avenue/Buangkok Drive), near Punggol Park, is accessible by LRT and two expressways.

The HDB has proposed about 465 EC units.

New EC units are sold with initial eligibility and ownership restrictions similar to public housing and will be fully converted to private housing after 10 years.

The minimum offer price for this site is S$103,800,000. The tender for this site will close on 25 May.

Next month, two more sites will be up for public tender at Punggol for ECs and in Yishun for condominiums.

The lease term for these sites is 99 years.

The HDB said the total potential supply quantum of 10,550 units from the Confirmed List and Reserve List for the first half of the 2010 Government Land Sales Programme is the highest in the history of the programme.

Besides the GLS programme, there is also supply from projects in the pipeline, which have been initiated earlier, both from the government and private land sources.

As at the fourth quarter of 2009, there were about 60,500 private residential units in the pipeline which would be completed over the next few years.

Of these 60,500 private residential units, there was also an inventory of about 34,200 private housing units which have not been sold yet, and can be made available for sale within the year if the developers choose to do so.

The HDB said the potential supply of land together with the supply from projects in the pipeline will be more than sufficient to meet the demand for private housing.

The government will continue to monitor the market and ensure that there’s sufficient supply.

If necessary, more supply can be injected via the second half of the 2010 GLS Programme.

Chief executive officer of PropNex, Mohd Ismail, said those who have been feeling the squeeze will find some relief from the new supply of Exceutive Condominiums.

“There’s been a fair bit of concern about this ’sandwiched class’ not being able to afford private property because of the increasing prices of the private property as well as rising prices of the HDB resale market. As such, the ECs will come in very handy,” he said.

Ngee Ann Polytechnic real estate lecturer, Nicholas Mak, said interest from developers will be high.

He expects more than 10 bids for each site.

“Some of these sites are actually in established residential areas, and one or two or them are even fairly near to MRT lines or LRT lines,” he said.

Mr Mak added that pricing for ECs typically ranges from S$250 to S$320 per square foot.

New ECs are usually about 25 per cent lower than new private condos. –

SOURCE: CNA/vm

The Housing Development Board (HDB) gave its flash estimate for the Q1 2010 Resale Price Index (RPI) at 154.9 today. This represents an increase of 2.7% for Q1 2010, compared to the 3.9% increase in Q4 2009.

Yet, resale volume has trended downwards. The estimated number of resale transactions for the past quarter is about 8,500. This is about 5% lower compared to Q4 2009 which registered 8,926 transactions.

The median Cash-Over Valuation (COV) amount for Q1 2010 has stabilised at $25,000, an increase of $1,000 over Q4 2009. In contrast, the median COV doubled from $12,000 in Q3 2009 to $24,000 in Q4 2009.

PropNex CEO Mohamed Ismail thinks the price index will go up further. “As long as COV levels, fuelled by strong demand, remain high, the RPI will continue to go up. The latest figure would be in line with our forecast of an overall 5 – 8% growth in the RPI for 2010,” he said.

He also pointed out that the first quarter is traditionally the quietest quarter for property sales and that a dip in sales volume was to be expected. In fact, Ismail feels that the dip was relatively small and was another reflection of the public housing demand.

SOURCE: iProperty.com

Hefty price tags have not dented the market, with buyers flocking to pre-construction sales offering blank cheques to reserve condominium units which they expect to rise sharply in value after the projects are finished.

All 202 units at a private condominium in the central business district — costing 1.2 million-2.0 million Singapore dollars (870,000-1.4 million US) — were snapped up in just one day at a preview in March, agents said.

About 25 percent of the 56 multi-million-dollar units offered at an invitation-only event at an exclusive waterfront development, The Residences at W Singapore Sentosa Cove, were bought in just one weekend preview.

Waterfront homes boasting unobstructed sea views, marketed as the ultimate experience in lifestyle living, have been prime among the recent launches.

“The market is driven by confidence fuelled by the recovering economy and employment market, and supported by low interest rates,” Tay Huey Ying, director for research and advisory at property consultancy Colliers International, told AFP.

“Market optimism is also riding high on the anticipated potential for Singapore to rise in prominence in the investment radar of foreigners, particularly the high net-worth individuals and high-rollers, as a result of the opening of the two integrated (casino) resorts in 2010.”

Singapore in February opened its first casino resort complex, which includes Southeast Asia’s first Universal Studios theme park. A second casino built by Las Vegas Sands will open next month.

The city-state, a regional financial centre, is also promoting itself as a hub where the world’s growing ranks of multi-millionaires can park their money safely.

Warning of a possible bubble that could derail the economic rebound, the government in February imposed new regulations to stem property prices, and warned it was prepared to take further measures if necessary.

But the move, designed to discourage investors who buy and sell for a quick profit, appears to have had limited impact.

Private home prices rose 5.1 percent in the first quarter from the previous three months, government figures showed.

Although this was slower than the 7.4 percent rise in the previous quarter, property analysts said prices are expected to continue going up for the rest of the year.

“Barring unforeseen circumstances and further cooling measures, the residential sector is expected to continue to lead the property market in price movement in 2010,” Tay said.

Singapore’s economy is expected to grow up to 6.5 percent this year after contracting 2.0 percent in 2009 due to the global financial crisis.

Even prices for government-built residential highrises, which do not have security guards, swimming pools and other luxuries offered by private condominiums, are heating up.

They rose 2.7 percent to a fresh record in the first quarter compared to the previous three months, according to official data.

Tay said foreigners, including permanent residents, accounted for 28 percent of all private home transactions between January and March 16, surpassing the 26 percent seen at the market’s peak in the first half of 2008.

Desmond Sim, Jones Lang LaSalle’s associate director for research and consultancy, added: “More foreign buyers are looking to the Singapore residential market as the properties offer further potential for gains given the country’s long-term positive economic growth prospects and stable political climate.”

Analysts said the government may introduce more measures if home prices risked forming a bubble.

“The fundamental concern is overt asset prices that could destabilise economic recovery and affect home affordability,” said Sim.

But Justin Chiu, executive director of Hong Kong’s Cheung Kong (Holdings), was unapologetic at the recent launch of his company’s latest development in Singapore.

“I like bubbles. It’s my religion… If there is some bubble, people will be more enticed to go into the market,” he said.