Monday, June 16, 2008

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HDB Market No Slowdown: Mah Bow Tan

Public housing transactions not as high as 6 months ago
There is no slowdown in the public housing market, but National Development Minister Mah Bow Tan has said the number of transactions may not be as high as six months ago, as the market is now more balanced with an adequate supply of new flats being offered by the Housing and Development Board.
- Channel NewsAsia - 15 Jun 2008

A more ‘balanced’ market:
THE private market may have quietened, but the housing board resale market remains “quite active”, said Minister for National Development Mah Bow Tan.
.:“Transactions are still strong — not as strong as six months ago, but still relatively strong,” Mr Mah said, on the sidelines of a community event yesterday.:
.:“It’s a real demand, a real market for people to buy a flat to live in, unlike the private market where some people buy to live, some to invest, some for speculation. So long as there are new families being formed and new immigrants coming in, the HDB market will remain a very active one.”
.Supply and demand, he added, was now more balanced. “Because of the uncertainty ... people are a bit more cautious,” he said. “I think people realise that there’s adequate supply coming on stream, they don’t have to panic, we’re pushing out more Build-To-Order (BTO) flats. Those who can afford to wait, they’ll wait.”
- Today 16 June 2008

May also want to read:
History of Singapore Property 1960 to 2008
Buy or Not Buy: How to decide amid mixed market signals
Smart Buyers, 10 reasons to wait
Property Price Index Graph Plotter & Online Property Valuation


Anonymous said...

We are a young couple looking for our 1st flat. We balloted 3 times for flats, but was hugely unsuccessful. So we are trying for the resale market right now. However, reading the blog has been quite an eye opener and we are wondering whether we should be buying a resale flat or wait it out? How does the movings in the private sector affect the public housing? Agents say that hdb prices will continue to rise which we are very sceptical about. As we are young, we hope that people who are more experienced to give us advice. Thanks!

Smart Property Buyer said...

I'll tell all young people as I'd tell my children, "Buy within your means". Be prepared to compromise on other ideals you've for a home.

As for whether you should wait it out, Minister Mah has said, "Those who can afford to wait, they'll wait."

Well, prices of private properties have surged beyond the reach of most young couples, so they've turned towards HDB. This has in turn pushed up the prices of HDB resales flats. Going forwards, if prices of private properties moderate, then it's reasonable to expect HDB resales flats to moderate.

Anonymous said...

we can afford to wait until next year june. (as my rent is reasonable). But how long should I wait.

Is it a few months or a few years?

Smart Property Buyer said...

Dear Anonymous,
If you're not entitled to apply for new HDB (I assume you'd already be in the HDB's BTO queue if you're entitled), then a prudent approach I'd suggest is to start with a small resales HDB in a less prime location as they're more affordable. You can upgrade later when the market comes down. The property market is cyclical as MM Lee said,"They go up, then they go down". Though for someone who's desperately looking for a home, it sometimes looks like it'll never come down. Whether prices of HDB resale flats will continue to soar would depend on the economy. As it looks now, Singapore economy looks likely to weaken considerably by the end of the year.

Best wishes to you.

Anonymous said...

Hi Smart Property Buyer,

Chance upon your blog as i was like the couple above, needing a flat for setting up of a new family but yet not sure whether we should wait or buy now.

Do you think the resale prices will come down by end of this year or early next year. Initially, i do not want to consider Build to Order as i need to wait at least 3 years before getting the flat. However, if i want to wait for the market prices to drop (which may not even drop) then i must as well go for the BTO, being first hand flat and at a subsidized rate.

Please advise.

Smart Buyer said...

Dear Anonymous Couple,
The following is the RPI for HDB from 1990-2008 by quarter:

Period Index Percentage Change From The Previous Quarter
II* 131.7 4.4%
I 126.2 3.7%

IV 121.7 5.7%
III 115.1 6.6%
II 108.0 3.0%
I 104.9 1.3%

IV 103.6 1.0%
III 102.6 -0.2%
II 102.8 1.0%
I 101.8 0.2%

IV 101.6 0.4%
III 101.2 -0.4%
II 101.6 -4.8%
I 106.7 0.1%

IV 106.6 1.0%
III 105.5 0.1%
II 105.4 1.2%
I 104.1 0.2%

IV 103.9 1.2%
III 102.7 2.4%
II 100.3 2.1%
I 98.2 1.6%

IV 96.7 0.0%
III 96.7 1.0%
II 95.7 0.2%
I 95.5 -0.8%

IV 96.3 -1.4%
III 97.7 -2.0%
II 99.7 -1.6%
I 101.3 -3.4%

IV 104.9 -2.2%
III 107.3 -2.2%
II 109.7 -1.3%
I 111.1 0.6%

IV 110.4 2.2%
III 108.0 8.1%
II 99.9 1.4%
I 98.5 -1.5%

IV 100.0 -3.5%
III 103.6 -4.3%
II 108.3 -4.2%
I 113.0 -7.1%

IV 121.7 -6.0%
III 129.4 -4.1%
II 134.9 -1.0%
I 136.3 -0.4%

IV 136.9 2.7%
III 133.3 6.0%
II 125.7 12.8%
I 111.4 9.3%

IV 101.9 8.9%
III 93.6 5.9%
II 88.4 11.6%
I 79.2 4.5%

IV 75.8 0.4%
III 75.5 5.6%
II 71.5 2.6%
I 69.7 2.8%

IV 67.8 2.9%
III 65.9 20.3%
II 54.8 31.1%
I 41.8 5.6%

IV 39.6 2.3%
III 38.7 2.1%
II 37.9 6.2%
I 35.7 2.9%

IV 34.7 -0.6%
III 34.9 -0.9%
II 35.2 2.0%
I 34.5 1.2%

IV 34.1 -1.4%
III 34.6 2.4%
II 33.8 0.6%
I 33.6

As you can from the data above, the HDB resale price plunged by more than 10%/year only in 1997 and 1998 during the Asian Financial Crisis. This happened against a back drop of huge over-supply of new HDB flats. Given that the government has learnt and has said repeatedly that they would not over-supply with its BTO, rather than the built without order in the 90s, I personally think it's unlikely for the same sort of over-supply to happen this time round. In addition, the HDB rental demand is very strong too. In the 90s, HDB owners do not have the option of leasing their flats.

My assessment for HDB resale prices is that they're unlikely to fall like in 1997-98 even if we should go into a recession. However some moderation of the range of 5% may happen if the economic situation worsens by mid to end of next year. Price will likely hold and even rise for this year given the high volume for both rental and resale transactions (refer to:

Ps make your own judgement about my comments.

Best wishes.

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