EC site in Woodlands attracts seven bids; top bid of $216m by Qingjian Realty

An executive condominium (EC) site in Woodlands has attracted seven bids from developers, according to the Housing & Development Board (HDB).

The 99-year leasehold site at Woodlands Avenue 5/Woodlands Avenue 6 fetched a top bid of S$216 million from Qingjian Realty (South Pacific) Group.

That’s about 9 percent above the second highest bid of S$198 million tabled by Bellevue Properties, a wholly-owned subsidiary of City Development’s Verwood Holdings.

Analysts say the top bid of S$216 million works out to about S$341 per square foot per plot ratio (psf ppr).

And that is higher than previous bids for nearby sites at S$318 psf ppr and S$302 psf ppr last year

HDB says the site, which spans over 21,000 square metres, can potentially yield 590 residential units.

Desmond Sim, Associate Director of CBRE Research, said, “The relatively higher bid reflects developers’ renewed confidence in the area following the government’s announcement on Woodlands as Singapore’s new commercial hub in the land-use plan in January 2013… we expect interest in the next few EC plots this year to remain strong as there is a genuine need and demand for ECs. Developers are still positive about the EC market.”

ERA Realty Network expects selling price for units built on the site to start at $830 psf.

“This is the first EC land sale allocated after the new cooling measures were introduced. It can be seen that developers are still hungry for land sites to build up their land bank,” said Eugene Lim, key executive officer at ERA.

Cooling measures introduced in January this year will apply to this site.

Among them are restrictions on the maximum size of EC units and guidelines on private enclosed spaces or private roof terraces.

Under the new rules EC developers will also only be able to market their projects 15 months from the date of award of the sites.

Including this latest site, there are now four EC projects in Woodlands. The other three are La Casa, Forestville and Twin Fountains.

HDB says decision on the award of the tender will be announced at a later date.

Source : Channel NewsAsia – 9 May 2013

HDB RPI up 1.3%, resale transactions down 23%

The Resale Price Index (RPI) for Housing & Development Board (HDB) flats rose 1.3 per cent from 202.9 in the fourth quarter of 2012 to 205.5 in the first quarter of 2013.

According to data released by HDB on Friday, resale transactions fell 23 per cent from 5,631 cases in the fourth quarter of 2012 to 4,335 cases in Q1 2013.

In the rental market, subletting transactions rose 15 per cent from 6,443 cases in Q4 2012 to 7,410 cases in Q1 2013.

The total number of HDB flats approved for subletting rose 1.8 per cent from 43,508 units in Q4 2012 to 44,274 units in Q1 2013.

HDB said 4,850 Build-to-Order (BTO) flats will go sale in the May 2013 BTO exercise.

The BTO flats will be located in Choa Chu Kang, Hougang, Jurong West, Sembawang, and Woodlands.

An additional 3,000 flats will be offered in a concurrent Sale of Balance Flats exercise.

Source : Channel NewsAsia – 24 Apr 2013

Twin Fountains EC 2.3 times subscribed

E-applications for the executive condominium (EC) project Twin Fountains in Woodlands have closed.

Close to 1,000 e-applications were received.

This translates to a subscription rate of approximately 2.3 times, based on the 418 residential units up for sale.

About 3 in 10 of e-applications received were from first-time home buyers.

The rest were second-time buyers.

CEO of Frasers Centrepoint Homes, Cheang Kok Kheong, said the strong response shows that there is indeed pent-up demand for EC homes in Woodlands, especially from upgraders.

Source : Channel NewsAsia – 21 Apr 2013

Twin Fountains EC project launched

The first executive condominium (EC) project for the year was launched in Woodlands on Wednesday.

As of 5pm, the developer of Twin Fountains said it has received 155 online applications for the 418 units on offer. Applications will close on 21 April.

The project is being jointly developed by Frasers Centrepoint and Lum Chang.

It wasn’t the packed sales gallery that some might have expected, but the number of online applications received so far showed there’s interest.

The developer expects applications to rise steadily over the 11-day online application period.

Sidney Tan, an applicant, said: “We’re over-qualified for an HDB, so the only option is to go for an EC.”

Another applicant, Jimmy Yap, who is upgrading from an HDB maisonette, said: “If I buy an EC for one million dollars, I can buy something like a three-bedroom, or even a four-bedroom unit with a floor area of at least 1,200 square feet.

“If I were to buy a private condominium, based on my budget of one million dollars, all I can get is maybe maximum, a two-bedroom, which is maybe 700 square feet.”

Mohamed Alamgir Siddiqui, an applicant, added: “HDB nowadays, the new flats are very small and don’t suit me. I have two sons living with me — one is a student, one is working — so it’s too tight. This one (EC) I found is a little bit better.”

The EC is the first launched in Woodlands since 2005. With government plans to develop the town into a regional centre, some say this may prove to be a big selling point for potential home owners.

The units are being priced between S$660 and S$790 per square foot, depending on the unit type, which floor it is on, and its orientation. That’s from S$580,000 for a two-bedroom suite to S$1.26 million for a four-bedroom deluxe dual key (TRIO) unit.

Nicholas Mak, SLP International Property Consultants’ executive director, said: “The average transacted price of ECs in today’s market ranges from 700 dollars to 750 dollars per square foot.

“But for some EC projects that are maybe within 10 minutes walking distance from an MRT station, the developers may launch those projects at even close to perhaps 800 dollars per square foot.

“But there are not many of such projects in the market. So typically, executive condominium projects priced at 700 to 750 dollars per square foot should have quite positive take-up rate from homebuyers.”

Propnex’s key executive officer Lim Yong Hock, said: “Most of the other ECs that have been launched or are still being launched, the prices are actually ranging between $650 and $750 per square foot.

“So I believe the developers did a study and they are pricing it in a very realistic manner because they know the ECs are meant for what we call the sandwiched class — people who are not eligible to apply for BTOs and also not able to afford a private condominium — these are the people who will come over to the EC market.”

The government had also earlier announced new restrictions for executive condominiums — among them, restrictions to the maximum size of an EC unit and selling dual key units to only multi-generational families.

But the developer said this project has been exempted. In fact, its two penthouses offered exceed the new maximum size of 160 square metres or about 1,700 square feet — at just over 2,200 square feet.

Mr Mak said: “If this development were to be exempted from such regulations because their development plans were approved before the announcement of the measures, then they will be one of the last EC projects which will have very big penthouse units, as well as the buyers will have more flexibility when choosing the different types of units, including dual key units.

“I don’t think we’re going to see very shocking prices for this EC, but then there are only two penthouse units, which mean they would probably be sold out quite quickly.”

Successful applicants will make their bookings on 11 May.

Source : Channel NewsAsia – 10 Apr 2013

Four- and five-room flats in Punggol most popular among first-time home buyers

Four- and five-room flats in Punggol look to be the most heavily subscribed among first-time home buyers in this month’s Build-To-Order exercise which closes at midnight.

A total of 3,898 flats were launched in this month’s Build-To-Order exercise. They are all in non-mature estates of Sengkang, Punggol and Bukit Batok.

Analysts say this may be one reason why there has been a small dip in the overall application rates.

This compared to the previous exercise in January when projects in mature estates were also on offer. The overall application rate as of 5pm was 2.9, compared to 3.8 in the January exercise. The application rate in the November 2012 launch was 2.9.

Mr Mohamed Ismail, Chief Executive Officer of PropNex, said: “Some people would prefer locations that is (are) beyond this and that could also be a reason where they say after all, there’s many more in the pipeline and some people choose to take a wait and see attitude. Now that the success rates are much higher, people are not as anxious as they were couple of quarters ago, when they know if they’re not successful, it might take a long period of time.”

But there could be other reasons as well.

Mr Lee Sze Teck, Senior Manager of Research and Consultancy at Dennis Wee Group, said: “The government has announced it is trying to bring home prices down, maybe four years’ annual income, and some of these plans are in the works, so some of them could be observing to see how the government plans to do that. And lastly of course, the construction period for BTO flats, these are as long as 40 plus months and people who do not want to wait, of course they will hold back.”

The development in Punggol was the most popular among first-time home buyers.

As of 5pm, there were 2.6 first-time applicants for each four-room flat and 2.4 first-time applicants for each five-room flat.

It is the first time the Housing and Development Board is launching a development in Punggol Town since July last year.

It has been touted to be a town to watch – with seven different waterfront housing districts.

Mr Mohamed Ismail added: “People have more choices and they’re more choosy in deciding whether to apply for any of the BTOs. It is again reflective of the three (locations) why Punggol stands out. People like lifestyle and the younger generation values such lifestyle as a priority in the home that they want to stay.”

More than 4,800 new flats will be on offer in the next Build-To-Order exercise in May. But it’s the additional 3,000 flats in the concurrent Sale of Balance Flats exercise that some analysts say will draw strong demand.

Mr Lee Sze Teck added: “All the while, Sale of Balance flats are very attractive to people because of the shorter waiting time. This time round also because of the construction period, we would actually see more people going for the Sale of Balance flats because they just want to get the keys to their flats faster.”

Some analysts say some could be waiting for new housing policy changes to come into effect in the next BTO launch in May, including a higher quota of flats allocated to second-timers.

National Development Minister Khaw Boon Wan announced the government would double the second-timer quota for two-room and three-room flats in non-mature estates from 15 to 30 per cent.

Five per cent of the 30 per cent quota will be set aside for divorcees or widowed who have children below 16.

And letting parents who are expecting a child to also enjoy priority for new flats under the Parenthood Priority Scheme.

The overall application rate for first timers also dipped to 1.9, compared to 2.4 in the last BTO exercise in January.
Second-timer rates also fell from 14.9 in January to 9.2 this time round.

Mr Mohamed Ismail said it could also be a reflection that the ramped up supply of BTO flats are taking effect.

The HDB launched 25,000 flats in 2011 and 27,000 new flats in 2012.

The government has also announced it will launch about 25,000 flats this year.

Source : Channel NewsAsia – 27 Mar 2013

More singles return to HDB resale market

Some real estate agencies say more singles have returned to the HDB resale market after getting more clarity about the government’s plan to allow singles to buy new flats directly from the Housing and Development Board.

Propnex and Dennis Wee Group have seen 20 percent more enquires and viewings from singles in recent weeks.

Lately, some property agents have been getting more calls from singles, who have put their home-hunting plans on hold previously, to find out if they too can buy new public housing flats from the government.

Mr Lee Sze Teck, Senior Manager, Research & Consultancy, Dennis Wee Group, said: “Singles were expecting the government to actually open up a fair bit of housing market to them, but when the government announced that only two-rooms and with an income ceiling of $5,000 per month were the criteria, they were disappointed. As such, they came back to the resale market and for us, we witnessed about 20 per cent increase in enquiries.”

Singles can buy new 2-room flats in non-mature estates directly from the HDB in July’s Build-To-Order exercise.

Analysts say on average about 4,000 singles buy HDB resale flats each year. And some of them project that about 20 per cent of the buyers could opt to buy new BTO flats in the future. But it should not have any major impact on the resale market just yet.

Market watchers say allowing singles to buy new BTO flats is a step in the right direction, paving the way for more inclusive housing policies.

And they estimate that the new 2-room flats for singles could be priced at an affordable range of S$100,000 to S$150,000.

Mr Chia Siew Chuin, Director, Research & Advisory, Colliers International, said: “We think what the government can do at the very basic, and I do think it is quite basic, is to consider opening up in terms of locations, to include a few more locations including the mature estates as well as allowing them a choice of other type of room units.”

Mr Donald Han, Special Advisor, HSR, said: “Perhaps the need for larger units for singles, should not just confined to a 35 or 45 square metres. Probably in the greying years some of the singles may need help, they may need helpers to be there to look after them, so the increase to allow a 3-bedroom could be more palatable.”

Ms Alice Tan, Senior Manager, Consultancy & Research, Knight Frank, said: “The authorities can consider some innovative ways of offering housing options for these singles such as a dual-key concept such as having a 2-room HDB flat with a studio apartment for their elderly parents. Perhaps such dual key concepts could appeal to singles who want to live near to their parents.”

Analysts expect the government to offer more new flats for singles if demand at July’s BTO exercise is strong.

Source : Channel NewsAsia – 27 Mar 2013

What will it take to reduce prices by 30 per cent?

Many have said the 30 per cent cut in new Housing and Development Board (HDB) flat prices that National Development Minister Khaw Boon Wan pledged recently will be tough to achieve without serious repercussions on the housing market.

This is because it is very difficult to reconcile the divergent interests of existing owners with those of new buyers. Existing owners want the highest values, while new buyers naturally want prices to be as low as possible.

Reconciliation may seem near-impossible, but the challenge is not insurmountable.

Mr Khaw has listed some possible measures, such as shortening the lease of the flat, extending the minimum occupation period or requiring the new flats to be sold back to the HDB.

The simplest measure to administer with minimal market impact is the shortening of the lease term of new flats. Reducing the number of years of the lease by 30 per cent will allow prices to come down by a similar percentage. However, this does not mean flats are cheaper — the price per year of lease remains the same.

Some say this will take away demand from the resale market, leading to prices falling in this segment. Not necessarily: If price is the critical factor, everyone would have applied for new flats because the prices are much lower. Often, prospective buyers weigh the costs with the benefits and decide on that which gives the best value.

In fact, the reverse may happen. Shortening the lease of new flats may drive up the demand for existing flats with longer leases, which means the latter will command a premium.

The other adjustment the market has to make is for financiers to sort out how they will handle what is essentially the same class of property, age-wise and lease-wise.

A drawback of this measure is that it does not preclude prices from rising again if there is a future mismatch of demand and supply. Do we then shorten the lease by another 30 per cent?

Requiring all future buyers to sell their flats back only to the HDB is one path I think the board prefers not to take. It is a big administrative hassle. The in-house valuation team has to be expanded to come up with “fair” buy-back prices and handle the appeals from owners who consider their flats to be worth more than the price tag placed on them.

And how will the HDB handle unpopular units? More often than not, incoming buyers will not pay the price bought back for. Will the HDB then take the loss?

With the exception of centrally located flats or the choicest of flats with easy accessibility or great views, extending the minimum occupation period by more than the current five years may introduce rigidity in the upgrading process and restrict choice. Condemning buyers to lengthy occupation periods with no escape clause can only result in unhappiness and frustration for those who want to move on.

Individually, the measures appear less than satisfactory in terms of effectiveness, efficiency and choice, but a combination coupled with other measures may do the trick.

One possible combination is to treat the 30-per-cent price cut as the Government’s “co-investment” in the flat. The minimum occupation period is kept at five years, but any capital gains for flats sold in the sixth year is shared 70:30, with 30 per cent going back to the Government.

The share drops by 6 per cent with each subsequent year. Capital gains need not be shared after the 10th year. This way, the flat owner is not forced to stay any longer than he or she wishes to. This will also help spread out the number of maturing flats entering the resale market and provide support to resale prices.

As a matter of principle, those who bought flats since the de-link with resale flat prices should be allowed to convert to the new scheme if they wish to do so. To preserve a sense of fairness for those who bought prior to the de-link, they can be offered concessionary housing loan rates, e.g. very low or no interest, for the first two to three years.

Finally, even if the selected combination were to result in some price correction for existing owners, it is not a question of life or death as some make it out to be. Most owners do not want to see a sharp fall in the value of their flats, but if you ask around, they are not totally against a “fair” adjustment.

The HDB resale price index shows that those who bought flats more than five years ago have more than doubled their investments.

In fact, some see the current market value of their flats as bordering on the ridiculous. Many prefer to see a return to “saner” prices. Intuitively, they know it is for the good of all. Most HDB home owners are not greedy investors. They do not reflect on how wealthy they have become at the end of each day.

You can understand why. The majority of existing owners have children of their own. For these owners, their immediate concern is for lower new flat prices so their children do not end up working their entire lives to pay for their homes.

By Colin Tan – head of research and Consultancy at Chesterton Suntec International

Source : Today – 22 Mar 2013

Go back to basics to make housing affordable: ex-HDB CEO

Housing must be affordable, but the Housing & Development Board (HDB) must also remain financially viable, said former HDB chief executive officer Liu Thai Ker.

He was speaking about Singapore’s housing policies at a lecture organised by the Ministry of National Development (MND) on Thursday.

Dr Liu, who is also the chairman of the Centre for Liveable Cities, said that Singapore must remain prudent, making sure that “government finance is sound”.

He also gave suggestions on making housing more affordable.

He said supply should match with demand, adding that it might not be a bad idea to over-supply “marginally”.

He said this would keep market prices in check.

Dr Liu also spoke about the difficulties and challenges faced in executing public housing policies.

He also discussed how the Singapore model may be applied to highly dense cities in developing countries.

Dr Liu Thai Ker, former chief architect and chief executive officer of HDB, said: “We should go to the basics, in the sense that we should not emulate condominiums, because… (they) require more expensive materials…

“Go back to the basics, keep the housing prices still affordable, and let the residents embellish the house.”

Source : Channel NewsAsia – 21 Mar 2013

4 BTO projects launched, offering 3,898 new flats

The Housing and Development Board (HDB) has launched four Build-To-Order (BTO) projects, offering 3,898 new flats.

They are in three non-mature towns – Bukit Batok, Punggol and Sengkang.

HDB said on Thursday that a wide variety of flats are being offered.

On the whole, it will launch a total of 25,000 BTO flats in 2013.

In the latest launch on Thursday, first-time buyers will continue to get priority in flat allocation, with at least 85 per cent of the BTO flat supply set aside for them.

Of the 85 per cent quota, 30 per cent of the BTO flat supply will be set aside for HDB first-time buyers who are married couples with a citizen child below 16, under the Parenthood Priority Scheme.

In addition, the Multi-Generation Priority Scheme is available to those applying for flats at Compassvale Cape, Compassvale Helm and SkyPeak @ Bukit Batok.

Elderly flat owners who are living in Sengkang Town will also enjoy doubled balloting chances under the Ageing-In-Place Priority Scheme if they apply for a studio apartment in Compassvale Cape or Compassvale Helm.

Eligible first-timer households can enjoy up to S$60,000 of housing grants.

These comprise the Additional CPF Housing Grant (S$40,000) and Special CPF Housing Grant (S$20,000).

With these grants, a two-room flat will be priced from S$57,000, while the price of a three-room flat will be from $159,000 and that of a four-room flat will start from $269,000.

HDB said this will enable young couples to buy their first homes.

Source : Channel NewsAsia – 21 Mar 2013

There is demand for multi-generational flats: analysts

Analysts have said that it’s timely to rebuild multi-generational flats, in view of Singapore’s changing demographics.

Their comments follow National Development Minister Khaw Boon Wan’s announcement that such flats may be built in Yishun, to test demand.

The units at block 633, Yishun Street 61 built in 1987 are some of HDB’s multi-generational flats rolled out in 1986.

These flats, typically consist four or five room units and, are built beside a studio apartment and facilitate extended-family living.

Construction for these flats stopped sometime in the early 90′s.

Housing experts said the resale prices for such mega flats range from S$610,000 to S$980,000.

And with Singapore’s ageing population, they said the HDB should promote multi-generational living.

One analyst though added that measures should be in place to prevent such flats from being abused.

Director of Chris International, Chris Koh said: “HDB does not build any more executive flats, they only build up to five-room size and even the five-room units are smaller than five-room flats of 20 years ago.

“So to buy a big flat, there is not many like you said, that’s why there’s a demand for it. People who are applying for it should form a nucleus of a multi- generation, if not it will be taken advantage of. A couple with no children may end up buying such a flat. And what do they do? They rent out half of it or in future look at it for capital appreciation.”