7,000 HDB flats to be made available in next three months

The Housing and Development Board (HDB) will release 7,000 new flats in the next three months, to cope with strong market demand.

This is more than that offered in the first nine months of the year.

From now to December, the HDB will launch 5,000 new flats for sale under its Build-to-Order (BTO) scheme.

These will be in both new and mature towns, including 1,700 units in Dawson estate in Queenstown.

The Dawson developments will be part of the HDB’s Remaking Our Heartlands programme.

This is the second time this year that authorities are bumping up the supply of new flats, and the move should please some first-time homebuyers.

In July, National Development Minister Mah Bow Tan announced that the HDB will build 8,000 flats this year, up from the original target of 6,000. But speaking to reporters on Thursday, he said continued strong demand from homebuyers in July and August has prompted his ministry to revise its target upwards once more.

One homebuyer said: “We have been searching for a flat for more than one year already….now (that) HDB is getting more flats, I think it is better, because we can stand a better chance.”

Eugene Lim, associate director, ERA Asia Pacific, said: “The HDB is also responding to market feedback in the sense that there were concerns amongst many people that, ‘you are releasing new flats but they are all in the same location….so where else are you releasing new flats?'”

The move comes as resale prices for HDB flats hit an all-time high.

HDB flash estimates for the Resale Price Index for the third quarter of 2009 placed the figure at 144.7, based on 1998 prices.

Although higher resale prices are unlikely to affect the demand for new HDB homes as that market is mostly closed off to resale buyers, analysts caution that new HDB units could see higher prices as a result.

This is because the HDB prices new flats based on resale prices for similar units nearby. However how much increase homebuyers will see depends on the location of the new BTO projects.

The government said prices are monitored closely, but buyers have to lower their expectations too.

HDB figures also show that average prices for new flats under the BTO programme range from S$150,000 for a three-room unit, to S$330,000 for a five-room flat. The average household income for applicants of five-room flats is S$4,800, which HDB says is well within the S$8,000 ceiling for first-timer subsidies.

Mr Mah said: “A flat that is in a place of their choice, a specific flat is not affordable, that I grant. But there are other flats that are affordable. So the question is, can the government assure people that a flat of your choice is available, that is the difficult part.”

Another option for homebuyers is to consider what is known as balance flats.

Previously, all unsold new flats would be regularly offered to the market in separate sittings depending on the flat type. Now however, they would be sold under one combined exercise, and only when HDB has accumulated enough to sell.

As many of these flats are located in popular areas, one may expect demand to be very high. But authorities said that nine in 10 would be reserved for first-time buyers.

But some feel that the flats would not be good enough.

One homebuyer said: “As a first-time homebuyer, I won’t look at balance flats, because they are (on) low floors, bad location. That is why they are leftovers which people did not want in the first place.”

A total of 2,132 units will be on offer in October.

Source : Channel NewsAsia – 1 Oct 2009

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