Week in Review – 26 February 2015

Minister for National Development Khaw Boon Wan announced that the housing stock in Singapore is expected to increase by 11 per cent, from the current 1.28 million units to 1.43 million units, by 2018. 75 per cent of the upcoming new units will be for HDB estates while the rest will be under the private sector.

Mr Khaw also said that the pipeline supply of new homes for 2014 to 2017 has been revised from 200,034 units to 195,788 units due to an adjustment in HDB’s BTO supply. In addition, the Ministry of National Development has updated the target for 2015 to 2018 as 182,506 units. Mr Khaw mentioned “Home buyers have plenty of choices.”

The recent trend of smaller executive condominium (EC) units will likely continue as developers attempt to balance their own profitability and affordability for buyers, according to property analysts interviewed by Channel NewsAsia. SLP International reported that the average size of a three-bedroom unit fell to 1,100 square feet (sq ft) in the last five years; it ranged between 1,200 and 1,300 sq ft in the 1990s. Similarly, Mr Alan Cheong, Senior Director at Savills Singapore said, “Today, we are getting about 1,050 to about 1,200. So the range has already shifted down.”

Although there are increasingly smaller units, such as the 700 sq ft two bedroom units introduced in 2005, property analysts mentioned that a limit exists for how small units can go. Mr Cheong said “Because ECs are more for own use – for the first five years’ minimum occupation period. And then to build anything smaller, developers will be taking risks that buyers there are not going to start an average family with children, or even with a maid.”

To allow more people to qualify and buy houses, Ms Lee Bee Wah, Chairman of the Government Parliamentary Committee for National Development has called for an increase in income ceiling for purchase of ECs and HDB flats. Ms Lee recommended that ceilings should be adjusted upwards by S$2,000 to S$3,000 to meet rising income levels. The current monthly income ceilings for ECs and HDB flats are S$10,000 and S$12,000 respectively.

The mid-end segment of ECs rose from three per cent in December 2014 to 19 per cent last month, according to OSK-DMG. The mass-market segment registered the remaining 81 per cent of the launches in January 2015.There were 415 units (excluding ECs) launched last month, a 683 per cent month-on-month increase, as developers were reluctant to launch new units during the holiday season. High-end segment launches were absent in January 2015.

Following last week’s news on Hao Yuan Investment submitting the top bid of S$103.79 million for the EC land parcel at Woodland, the Housing & Development Board (HDB) awarded the site to Hao Yuan Investment. The site is the last of the three EC sites under the Confirmed List of the Government Land Sales (GLS) Programme for H2 2014. The other two sites are located at Sembawang Road and Anchorvale Crescent respectively.

Two new HDB projects, SkyVille@Dawson and SkyTerrace@Dawson are approaching completion and the first batch of residents will be able to obtain their keys within February, according to Channel NewsAsia. Located at Queenstown, the two developments will have 1,718 units, consisting of 105 units of studio apartments, 270 units of 3-room, 1,141 units of 4-room and 202 units of 5-room flats. There are also paired studio apartments where inter-connecting doors connect families from two separate units.

Mr Chan Lup Hoe, a 38-year-old father of three whose parents are in their 60s, told Channel NewsAsia, “Personally I feel that it is a good concept, where the parents are just next door, where they have their own privacy as well as I do. And I can get the help – just behind the door. That really helps especially for a young family like mine.”

Speaking at a dialogue, Social and Family Development Minister Chan Chun Sing said that social interaction between home owners can be fostered through building design. Mr Chan cited the example of an absence of common corridors in newer HDB flats and said, “Flat owners can have greater privacy this way, but it can have social implications.” He advised that developers in the real estate industry can play the important role of advocating social interaction, through allocating different types of flats, including rental units in a single project.

During the dialogue, Mr Chan also replied to a question on whether the government will build HDB flats at prime locations to encourage social interaction. He stated that he was sceptical that it would succeed as there may be potential issues of buyers purchasing the flats, only to profit from selling them in the resale market.