Source: Channel NewsAsia

Prices of resale HDB flats went up for the fifth consecutive quarter to surpass the 1996 peak by nearly 18%.

HDB’s flash estimate for the second quarter showed the Resale Price Index (RPI) rise 3.8% on-quarter to 160.9, surpassing the 1996 peak of 136.9 points.

Some analysts said the second quarter tends to see the strongest activity as many home buyers leave their flat purchases till after the Lunar New Year.

But others didn’t expect resale prices to rise so quickly, because of the government’s aggressive launch of new flats this year.

The government on Wednesday announced its single largest launch of HDB flats and said if demand continues it will add more units for sale, bringing the total to 16,000 for the whole of this year.

Analysts said this will help assure home buyers there are enough flats to go around, and will in the long-term, moderate prices of resale flats.

But over the next few months, they do not expect any let-up either in resale demand or price.

Nicholas Mak, real estate lecturer at Ngee Ann Polytechnic, said: “In the HDB market, although the slowdown might be more in terms of the Cash Over Valuation, or the seller’s expectations, the buyers, I think, are fairly bullish because in a way, the HDB public housing market forms the very base, the cheapest form of housing to anyone in Singapore.”

Furthermore, analysts said mass market condominiums are still out of the reach of most buyers.

Despite a slowdown in sales in recent months, private home prices have remained firm, increasing at 5.2 percent in the second quarter.

This is slightly smaller than the 5.6 percent rise in the first three months of this year.

It is also one of the smallest rate of increases in the last 12 months.

ERA Asia Pacific’s Associate Director Eugene Lim added that developers “are not likely to cut prices to move sales, as most of them have strong balance sheets.”

Chris Koh, Director of Dennis Wee Group, estimated that private home transactions have gone down by about 20 percent in recent months.

He said: “You speak to some of us who do private property transactions, we will tell you, yeah, the market is correcting a bit.

“We’re not seeing a steep rise in prices anymore for the private market. Instead private property prices have only inched one, two percent up and you can see that it’s more or less starting to plateau out.

“If that happens maybe the HDB market will mirror it….but at the moment I’m not seeing that in the HDB market yet.”

Overall, market watchers expect resale prices for 2010 to increase by 8 to 15 percent.

On Thursday, the government announced three more land parcels for sale, which could yield about 1,300 residential units, including 460 Executive Condominium flats.

The Urban Redevelopment Authority will also launch another three sites later this month, which will include sites for residential purposes.

In total, the Government Land Sales (GLS) Programme for the second half of 2010 comprises 27 residential sites and four mixed-use sites where private residential housing can be built.

The total potential supply of 13,905 private residential units is the highest potential supply quantum from any half yearly GLS Programme since the Confirmed List/Reserve List system started in the second half of 2001.

Source: TODAY Online

The couple’s four-room flat was repossessed after they were found to have sublet it out illegally – but that’s not the only thing the Housing and Development Board (HDB) discovered.

The couple, identified as Mr Poh Boon Kay and his wife Madam Khoo Kim Cheng, also owned five private properties. Mr Poh, a registered real estate agent, had bought the flat from the open market on June 1, 2007, for $150,000 without any loan.

This case was highlighted as the HDB gave an update on Friday on its enforcement action against illegal subletting: 56 such flat owners faced penalties that ranged from fines of $1,000 to $21,000, and in the Pohs’ case, repossession of their flat.

It is understood that HDB will return Mr Poh his $150,000 less penalties, which were not disclosed. Property agents told MediaCorp the flat could have fetched about $320,000, at today’s market prices.

Mr Poh is the first to have his flat compulsorily acquired since the HDB tightened rules against unauthorised subletting in February, which require flat owners who sub-let rooms in their HDB flats to register with the board within seven days of doing so. They are also required to notify the HDB when they renew or terminate the sub-letting of rooms. Prior to Feb 1, there was no need to seek prior approval for subletting of rooms.

Mdm Khoo was listed as the flat’s occupier when,in fact, it was illegally rented out to three Burmese couples for $1,900 a month.

When the HDB learned of this in November, it told Mr Poh to evict his tenants immediately, otherwise his flat would be seized. But the Pohs allowed their tenants to remain.

A Notice of Board’s Intention was served on Dec 23 to compulsorily acquire the flat.

The next day, the Pohs appealed to the HDB against the acquisition.

When the HDB interviewed the Pohs on Jan 5, they claimed that they did not know that they needed HDB’s approval for subletting.

The HDB found out that Mr Poh is linked to two other cases of unauthorised subletting: One, as an agent for his wife’s aunt, whose flat in Bukit Batok had been sublet to Burmese monks for use as a meditation centre at a monthly rent of $1,400 since July 2009. Mrs Poh’s aunt was not living in the flat.

In the second case, Mr Poh’s daughter had sublet her Telok Blangah flat without approval, for $900 a month. She too did not live there.

According to the HDB, the cases belied Mr Poh’s claims of being unaware of its rules. He also showed a “persistent disregard” of its rules. As such, the HDB said it would be taking legal action to compulsorily acquire both flats.

Source: HDB InfoWEB

The Minister for National Development, Mr Mah Bow Tan, announced in Parliament today that HDB will be raising the Minimum Occupation Period (MOP) for the resale of non-subsidised HDB flats from 1 and 2.5 years to 3 years. The objective is to reinforce owner-occupation.

2. HDB flats are primarily meant to provide owners with a roof over their heads. They are not meant for speculation or short-term profit. Hence, lessees are required to stay in their flat for a minimum period before they may sell their flat in the open market. Currently, lessees of subsidized HDB flats, i.e. HDB flats bought directly from HDB, DBSS flats bought from private developers or resale flats bought with CPF housing grant, are subject to an MOP of 5 years. On the other hand, lessees of non-subsidised HDB flats i.e. resale flats bought without CPF Housing Grant, are subject to the following MOP:

a) Those who take an HDB concessionary loan – 2.5 years

b) Those who take a bank loan or do not take a loan – 1 year

3. To reinforce the principle of owner-occupation, the MOP for resale of non-subsidised flats will be increased to 3 years, regardless of whether the buyer takes an HDB loan, a bank loan or no loan at all. With the extension of MOP, the demand in the resale market will also more accurately reflect the interest from buyers who are buying flats for occupation.

4. The revised MOP policy will apply to resale transactions where applications are received by HDB from 5 Mar 2010 onwards. Existing lessees of non-subsidised flats will not be affected, i.e. the original MOP of 2.5 or 1 year continues to apply to them. There are also no changes to the MOP for subletting of whole flats.

I REFER to last Thursday’s report, ‘Mah sounds warning on property buzz’, on the current property buying frenzy, and National Development Minister Mah Bow Tan’s warning that a property bubble may be forming.

I would like to highlight the plight of genuine home seekers in such an environment. Many young couples, including my fiancee and me, who are looking for a suitable home to start a family have seen affordability plunge in the past few years.

As reported in the media several times, private property prices have spiked recently due to speculative demand and better-off buyers going in for fear property prices will continue to rise. Property developers are making use of this window of opportunity to launch property developments at premium prices.

The prices of HDB resale flats, although subject to less speculation pressures due to sale restrictions, have also increased dramatically.

In the current economic downturn, most salaried Singaporeans would count their lucky stars if they did not have to suffer a pay cut.

Affordability of buying a home has simply plunged.

It is important to ensure that homes, especially new or resale HDB flats, continue to be affordable to most Singaporeans and young couples looking to start a family. Given the spike in HDB resale prices, as well as prices of new flats to a lesser extent, and the corresponding plunge in affordability, it is timely for the HDB to review how it can continue to fulfil its first mission: ‘We provide affordable homes of quality and value.’

The CPF housing grant and the HDB housing loan are two schemes that have helped maintain the affordability. However, like all policies, these schemes need to be refreshed and reviewed.

The combined income ceiling of $8,000 a month to be eligible for the schemes has been in place since 1994. Since then, the HDB resale price index has gone up by a staggering 190 per cent.

Beside these schemes, perhaps HDB can innovate and come up with new schemes to assist the sandwiched class like us, so its flats continue to be affordable.

THE HDB resale market seems to be chugging along nicely despite the recession. Soaring demand for resale flats sent prices to a record high in the second quarter, and some industry watchers are predicting further upside for the year.

Data from the Housing and Development Board yesterday showed the resale price index rising 1.4 per cent from the previous quarter to 140.2 in Q2. This is the highest level seen since 1990.

The increase surpassed HDB’s flash estimate of a 1.2 per cent rise. It also reversed a 0.8 per cent fall in Q1 – the first slide after nine straight quarters of growth. The price dip in Q1 now seems like a ‘statistical blip’, said property consultant Nicholas Mak.

Executive flats saw the biggest percentage rise in median resale prices, up 2.2 per cent from a quarter ago to $455,000.

Strong interest in resale flats helped sustain the market. Buyers and sellers filed 10,184 resale applications in Q2 – swelling 58 per cent from Q1 and 31 per cent from a year ago. According to HDB, the quarterly resale registration volume last crossed the 10,000-mark more than four years ago – it was 11,562 in Q4, 2004.

Most of the 10,184 applications in Q2 were for four-room flats, followed by three-roomers and then five-roomers.

However, applications for executive flats showed the greatest increase, doubling from a quarter ago to 753 in Q2. Those for five-room flats also jumped 80 per cent to 2,713. The sharp surge in resale activity involving larger flats suggests that there were more owners who sold their flats to buy private homes, said Mr Mak.

Market analysts have flagged HDB upgraders as a significant group of buyers who revived the private property market. Many went for units in mass-market projects such as Mi Casa and Double Bay Residences.

C&H Realty managing director Albert Lu pointed out that owners of smaller flats are also moving to larger flats. Prices of five-room and executive flats have languished in the last few quarters, making the move more attractive, he said.

Upgrading activity aside, the inflow of permanent residents (PRs) also contributed to demand for resale flats. HSR Property Group chief operating officer Dennis Yong observed that his firm has up to 10 per cent more resale transactions involving PRs in the last few months, and many of them are from China and India.

Buyers remained unwilling to pay high premiums for HDB flats. The median cash-over-valuation (COV) was $3,000 across all flat types in Q2, down slightly from $4,000 in Q1. Notably, most five-room and executive flats were still unable to command any COV.

In a way, the low COV sustained demand for HDB resale flats, said PropNex CEO Mohamed Ismail. ‘As the demand is strengthening quickly, sellers are expected to demand a higher COV.’ Mr Ismail expects the resale price index to gain around 3 per cent to 145 points by the end of the year. C&H Realty’s Mr Lu also projects a 2-3 per cent increase in resale prices.

Just a few months ago, property consultants had feared that HDB resale prices would drop as much as 10 per cent for the whole year. Signs of a stabilising economy and improved sentiment in the property market seem to have soothed nerves.

Statistics from the Urban Redevelopment Authority yesterday also painted a more calming picture. While prices in the residential, commercial and industrial sectors still fell in Q2, the declines were smaller than a quarter ago.