MAS: Cooling measures successful, but unlikely to continue once economy stabilises, HDB Housing Activity – 6,454 HDB flats released in latest BTO, SBF exercise; 40,000 new HDB units to be built; HUDC estate gets privatised, Private home vacancies increase while buyers wait for lower prices, More help for married couples who want to live near parents
MAS: Cooling measures successful, but unlikely to continue once economy stabilises
MAS Managing Director Ravi Menon cited recent restrictions on housing loans as mostly successful in reining in prices and moderating risk-taking, addressing financial vulnerabilities in the real estate sector, i.e. a property bubble. These measures are in response to “unusual conditions,” he adds, “where financial vulnerabilities are not evenly spread across the economy.” Once the global and local economy stabilises, “monetary policy regimes will not look drastically different from pre-Crisis days.”
Meanwhile, Member of Parliament (West Coast GRC) Foo Mee Har suggests re-examining cooling measures affecting the Loan to Value (LTV), Additional Buyer Stamp Duty (ABSD), and Total Debt Servicing Ratio (TDSR), to help the middle-income group with their upgrading aspirations. For example, households may find it difficult to purchase a new private property while already owning a flat, due to a maximum loan value at 50% and ABSD of 7% cash up front. She suggests that the ABSD can be collected upon completion of the new property; if that property is sold within a specified period, the buyer could be excused entirely from the ABSD payment.
HDB Housing Activity – 6,454 HDB flats released in latest BTO, SBF exercise; 40,000 new HDB units to be built; HUDC estate gets privatised
Last Thursday, HDB launched 6,454 flats for sale under the May 2014 joint Build-To-Order (BTO) and Sale of Balance Flats (SBF) exercise. 3,071 BTO flats have been launched in four projects in the non-mature estates of Bukit Batok and Woodlands, bringing the total number of BTO units offered this year to 9,707. This launch is the first since May last year to have more new units available for first-time buyers. Analysts suggest this drop is due to some buyers turning to SBF flats, in addition to a cleared backlog for BTO units among first-time buyers.
The remaining 3,383 SBF units were launched in 11 non-mature and 13 mature estates. The next BTO launch will commence in July, with 3,810 units to be offered in Punggol, Sembawang, Toa Payoh, Woodlands, and Yishun.
According to HDB, it is also launching more projects in Tampines North and Punggol Matilda later this year and in Bidadari next year. The three housing projects are expected to provide about 40,000 new homes; HDB states that these projects have received “strong support” from the public. “The development plans are tailored to capitalise on each estate’s distinct character, history and local flavour, so as to infuse each housing area with a unique identity and living experience for their residents,” said HDB.
Meanwhile, Hougang Avenue 2 HUDC estate is the latest HUDC estate to be privatised. This is the 15th estate out of 18 to be privatised under the Land Titles (Strata) Act.
Private home vacancies increase while buyers wait for lower prices
Savills Singapore has reported a 0.4% increase in vacancy rates for private home properties in 1Q14, reaching 19,284 vacant units, or 6.6%, out of the current 293,283 available private homes in Singapore. In a CIMB survey, only 14% of respondents intended to buy property within the next one to two years, compared to 78% expecting to buy after three years. According to CIMB this could bring about the risk of “less-than-ideal situation of weak demand on top of rising supply with historically high physical completions over the next three years”. However CIMB found that buyers responded well to discounts for the re-launch of projects such as Sky Habitat and Panorama and the recently launched Coco Palms. CIMB observed that the positive uptake of these properties “reinforces survey results that suggest weak demand is driven more by expectations [of falling prices] rather than affordability”.
Meanwhile the Singapore Residential Price Index released estimates indicating a 1% drop in overall resale prices of non-landed private residential properties in April. In an interview with Today, Ms Anne Tong, CEO of HSR International Realtors said “resale sellers are under pressure to match [discounts on new homes by developers] to compete for the same pool of buyers.”
More help for married couples who want to live near parents
The recently concluded HDB Sample Household Survey revealed that in 2013, 50% of married couples want to live with, or near their parents. 37% were doing so in 2013, compared to 31% in 2003. In his blog Minister for National Development Mr Khaw Boon Wan hinted that married couples who want to live with their parents could be given absolute priority, instead of just a greater priority in BTO applications, in support of his view that families should live close to one another. Mr Khaw also offered other suggestions aimed at bridging the gap between couples who want to live with their parents and those who are unable to. For example, the CPF Housing Grant given to eligible first-timers who buy a resale flat within the same estate as their parents could be raised from the current S$30,000 to S$40,000. Another suggestion is to build a larger proportion of bigger flats that can cater for multi-generational living. Mr Khaw invites Singaporeans to provide their views through an upcoming series of Housing Conversations on “Closer Families; Stronger Ties”.