Tuesday, September 23, 2008

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HDB BTO Flats see Strong Demand

THE strong demand in the HDB market saw bookings of HDB's Build-To-Order (BTO) flats increase by 49%, and the number of unsold HDB flats reduce from 3500 to 1500. HDB will offer 8400 new Build-To-Order (BTO) flats in 2008, compared to the 6000 in 2007 and 2400 in 2006. Of the 8400 HDB flats slated for 2008, about 5000 have already been launched.

‘There has been an increase in demand for new flats,’ HDB chief executive Tay Kim Poh said at a press briefing on the board’s annual report. ‘We have been ramping up the building programme.’ Mr Tay also said that HDB will adjust supply for 2009 accordingly to meet demand. In the light of rising construction costs, he reaffirmed HDB’s commitment to keep HDB flats affordable. According to HDB, a 4-room flat can cost about $300,000 to develop today, taking into account land, building and other costs. This is higher than the subsidised price of a 4-room flat sold by HDB at $200K to $260K.

To ensure that the basic housing needs of people are met, PropNex’s Mr Ismail said that HDBs may have to review certain policies, such as the income ceiling for HDB flat applicants, and perhaps even abolishing the resale levy.’

May also want to read:
History of Singapore Property 1960 to 2008
HDB Resale flats Price Index 1990-2008: Graph & Chart
Property Price Index Graph Plotter & Online Property Valuation
Your Property Investment Determines Your Financial Success in Your Life
HDB Resales: West Sees Highest Price Increase


Anonymous said...

HDB should abolish the income ceiling rule. The price of HDB flats has gone beyond what 8k can support.

In some prime locations like Bedok and Red Hill, prices of NEW balloted 4 room flats have gone beyond the 300k mark. Look at Boon Keng, some units are priced at above 700k. Even in places like Punggol, the new 4 room flats are hitting close to the 300k mark for some units.

Does HDB expects people that earns a combined income of below 8k to afford such 'affordable housing'? If that is what they term as affordable housing, I would see that HDB has lost touch with the realities of life and their mission.

The government expects young couples to set up a family. However, if young couples are saddled with housing loans or waiting for a flat to live in 3 years down the road, how do young couples procreate if housing, a basic need, is a worry?

People will need to feel a sense of security for their future before even thinking about securing the future of their children. Afterall, all parents want the best for their children.

The government should walk the talk and not just pay lip service about it's 'pro-family' policies.

Anonymous said...

I agree. You are so right!

Anonymous said...

Ya...I agree with the above post too. Resale flats buyers are not subjected to the 8k income ceiling rule. Although the government encourages young couples to look to resale housing if in urgent need of housing, it is still too expensive for young couples as the buyers in the resale market tend to be richer. Even with the subsidy, the COV asked for is simply not what a young couple can afford. Then there are renovations to be considered. It is just loans and more loans.

And now, new flats are pegged to the value of resale flats. I mean there's no logic to it right? New flats are catered to those whose income is below 8k and resale flats to those whose income is above 8k. Then why peg the value of new flats to resale flats if it is meant to be affordable? And the land belongs to the government, isn't it? So why is land cost included?

Maybe I'm young and do not understand the 'helicopter view' of the economics of property. All we know is that the young ones are being squeezed out of the resale markets or have to wait a minimum of 3 years for an expensive new flat.

Anonymous said...

hi smart buyer...

i just started work and am faced with a dilemma. me and my partner have applied successfully for park central 5 room at abt 600k. we are not sure if this is a haste decision as 600k seems to be too much for a HDB flat. there are some other options which we are evaluating right now.

1. To get a 5 room flat in punggol/sengkang/sembawang which costs abt 400k then get a car to overcome teh inconvenience.

--- but us having lived in amk for all our life, loves it in amk. and park central is so near to amk stattion and amk hub.

2. to get a 3 room in amk and wait for property slum then enter private market for investment.
--- but i am thinking that it wouldnt make a diff if i buy a 3 or 5 room now and then sell it later cos the price increase/decrease for both will be abt teh same 5 yrs down teh road. and the park central one might even fetch a higher price since its relatively new.

lastly, i would like to ask ur opinion on the outlook of market price for park central 5 room flats 5 yrs down the road.

Thanks a lot...

Smart Buyer said...

There is one point that I completely agree with you - "600k seems to be too much for a HDB flat." It is edging at the affordability fringe of HDB dwellers. Just how many people will pay you still higher prices in the future? And how far is that future going to be? 5 years? I don't have an answer, frankly. It depends largely on how the current global financial crisis will pan out. The economic outlook ranges from a prolonged downturn to a all out catastrophe of the 1930 great depression.

But one thing I do know is that the Singapore economy is already in a recession and jobs will be threatened in the months or even years ahead. Most people will be very cautious about over-committing to an expensive property at such a time. So do be prudent.

Best wishes

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