(F) News on Government Land Sale (GLS) Programme

[F.1] 2009 Government Land Sales Programme will be halted

Ministry of National Development (MND) has decided not to add any new sites to the Government Land Sales (GLS) Programme for first half (H1) 2009, in view of the negative forecast for the economy.

The H1 2009 slate - comprising the entirely reserve list sites, will have a total of 38 sites, comprising 37 plots that are being carried over from the H2 2008 reserve list and the unsold executive condo site at Punggol Road/Punggol Field.

The potential total floor areas that can be developed from the H1 2009 GLS Programme will be 7,920 private homes, 512,000 sq metres gross floor area (GFA) of commercial space and 5,160 hotel rooms.

There will also be a reduced supply of commercial space and no new supply of private residential units from Government agencies. The H1 2009 supply from this source will comprise about 40,000 sq metres GFA of commercial space and 240 hotel rooms.

[F.2] Kallang River and Stamford sites put off

The impending release of a hotel site in the Kallang River area has been postponed to next June by URA, yet another planned project delayed in view of the floundering market.

The 1.59ha hotel site at Kallang River - part of plans to transform the Kallang Riverside into a waterfront lifestyle precinct – will be relegated to the reserve list.

Likewise, a historic site in North Bridge Road - which contains Singapore's first cinema Capitol Theatre and two other heritage buildings - has been released on the reserve list sale system as planned.

This means that the site will be put up for tender only if developers indicate interest by committing to a minimum bid.

(G) Overall performance of the HDB resale market

[G.1] HDB resale price continue to climb despite recession

Price of resale HDB flats continue to rise despite the ongoing economic slowdown. The prices have climbed 1.5% in the final quarter (Q4) of 2008 – on top of the 4.2% rise in Q3 2008. The final figure of Q4 adds up to a total of 13.9% price growth for the whole of 2008, building on the 16.6% price increase in 2007.

This means HDB resale flat prices have reached a new peak since the 1996 high.

[G.2] More HDB flat owners behind in instalments

There has been an increase in HDB home loan defaults since late 2003.

About 8,000 households or 8% of them are unable to pay back their monthly instalments for three consecutive months. This means that in Singapore one in 12 households has been unable to pay for their basic housing for more than three months.

HDB has revealed that at the end of 2003, 25,000 flat owners out of the 517,300 households with HDB loans were in arrears for three months or more; however, the figure went up recently with 33,000 delinquencies out of 420,000 HDB home loans.
 
The spike in delinquency could be due to higher HDB resale prices. The latest flash estimates published by the Urban Redevelopment Authority (URA) on 28 December 2008 showed that HDB flat prices rose 13.9%, despite the recession.  The recent price increase was on top of the 17.4% gain a year earlier in 2007.
 
Another reason for the increase in the delinquency figures could be due to the fact that HDB seldom repossesses defaulters' flats, leaving their numbers to accumulate in the system. Some home owners in arrears can take up to a few years to pay off debts.

Members of Parliament (MPs) interviewed by the Straits Times confirmed that more HDB flat owners are seeking help for home loan problems at their Meet-the-People sessions.

The HDB will consider the following measures to help with the increasing delinquencies:

It may allow defaulters to pay reduced loan instalments on a temporary basis and work out a solution to their financial situation.

It may allow owners to sublet a room to generate income, or include working family members as joint owners to help pay for the flat.

Finally, the HDB may also consider providing an additional HDB loan to help owners downgrade to a smaller, more affordable unit.

[G.3] Resale transaction in December 2008 down

Due to the long festive season in December 2008, the HDB resale transactions were down in that month, though it still stays above the 2,000-deal level and finishes the whole year on a strong note.

Table [11] –Comparison of monthly total HDB resale transactions from January to November 2008

Source of info – HDB inforweb

[G.4] Case Study – 5-room resale prices kept at bay

After the spectacular rise in November 2008, the resale prices for 5-room flats in the 10 survey areas were held at bay in December 2008. Only four places had higher median resale prices. This shows that the drop in the resale transactions of 5-room flats was followed by the drop in the resale prices, due to the prevailing cautiousness.

Table [12] compare resale prices among the most populous heartland estates

Table [13] – Resale HDB flat Transactions in December 2008

Read the latest updates on other property segments:

Part 1:The economy at large

Part 2:Taking a look at the private residential property segment

Part 3:Movements in the non-residential property sector, collective sales and foreign interest in Singapore