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Tuesday, 30 September 2008
Singapore Property Hard Landing
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Flats in great demand
Pinnacle draws 3 times more applications than the number of flats
By Jessica Cheam Sep 30, 2008
THEY are among the priciest flats ever launched by the Housing Board, but there has been no shortage of potential buyers. The 50-storey Pinnacle@Duxton in Tanjong Pagar has attracted 1,467 applications for the 428 four- and five-roomers on offer - that is about 3.5 hopefuls for each unit.
Cheaper homes in less central areas were in even more demand, with applications streaming in at a rate of 20 per new flat in some districts.
HDB's balloting exercise on Friday attracted a total of 4,463 applications for 992 flats on sale in Ang Mo Kio, Queenstown, Jurong West, Kallang/ Whampoa and Tanjong Pagar as of 5pm yesterday.
The 111 five-roomers at the Pinnacle start at $545,000 and hit $645,800 for a 49th storey unit - the most expensive new HDB flats - yet there were still 372 applicants.
Demand for those flats paled in comparison with the 762 applications for just 39 four-room flats in Kallang/Whampoa, priced at between $364,000 and $435,000.
Property analysts said the response was not surprising, considering the underlying demand for new flats from first-time buyers and the preference for cheaper units.
Still, the fact that the Pinnacle racked up more than three times more applications than flats available proves there is strong demand, said PropNex chief executive Mohamed Ismail.
'Buyers have to expect to pay a premium for the prime location of city flats,' said Mr Ismail.
The HDB said the prices of Pinnacle flats were still lower than those of resale flats in the area. HDB figures show five-room flats in Tiong Bahru's Jalan Membina recently selling for $670,000 above the 20th floor. The average price of a five-room flat sold in Jalan Membina and Cantonment Close over the last three months was $624,000.
The response to the ballot also highlighted another emerging hot spot - Jurong, an area once spurned by buyers for being too far from the city.
Five-room flats here were about 11 times oversubscribed - 335 applications for the 30 flats.
ERA Asia-Pacific's assistant vice-president Eugene Lim said new flats here are now more attractive after a masterplan to rejuvenate the area was announced recently.
'It's also currently one of the cheapest housing spots in Singapore. It's not surprising it's moving now,' said Mr Lim.
He also feels those priced at $650,000 are at the top end of what buyers can afford.
'With two incomes, it's still manageable,' he said. In many cases, these flats are cheaper than buying from the resale market, where buyers usually need to pay a cash component upfront to sellers. This is not required for new flats, he added.
Still, HDB 'should be conscious that such pricing of flats are affordable only to a small cross-section of HDB home buyers,' said Mr Ismail.
But the true popularity of the flats has yet to be seen as the number of applications might not reflect the actual take-up rate. Applications for the new flats close on Oct 9.
Shouldn’t new HDB flats be priced less than market rate?
I REFER to last Saturday’s article, ‘$645K: HDB’s priciest flats go on sale’.
I was shocked that HDB has priced its new stock of flats in Tanjong Pagar at $545,000 to $645,000. I am not surprised the higher-end flats have relatively few takers due to steep pricing. As it is, HDB has priced its new flats according to surrounding resale market prices and built in a discount before launching them to the public.
I wonder if this is a fair comparison as the property market rides through the up-and-down cycle and if a new buyer buys now, he runs a high risk of buying at the high end of the market trend and may lose on his investment when the market goes down. This often happens to HDB resale or private property buyers who buy high in an uptrend market but lose heavily when the market goes south. It will be tragic if a buyer of a new HDB flat also goes through this financial heartache with his first ever housing unit.
There is generally not much premium earned on buying brand-new HDB flats now. One wonders if it is more prudent to buy a resale unit with the $30,000 rebate given as a sweetener, rather than buy a brand-new unit at such a high price.
Gone are the days when new HDB flats were much cheaper than in the current market. I bought my first new executive flat about 15 years ago at $143,000. I paid less than $500 a month for a mortgage loan. I later sold it a few times over when the property market was booming five years after I bought it. That was my first new HDB flat experience as I could buy only private or resale flats after that.
As the property market matures, I wonder if HDB has lost its mission to allow Singaporeans to own affordable housing with cheap loans. With new flats priced so high, home owners not only have to pay exorbitant loans but also worry that their flat valuation may drop if the market turns sour. Buying a new flat becomes more of a risky investment than providing a roof over one’s family.
HDB also needs to price its new flats better by considering factors other than surrounding resale valuation. To prevent home buyers immediately selling their flats after the five year lock-in period to make a profit, HDB can tie home owners to a longer lock-in period of eight to 10 years, enabling it to price flats cheaper. Many Singaporeans stay in their flats after more than 10 years, some for sentimental reasons, while others do not want to lock themselves into another big mortgage loan when they buy another property.
HDB resale flat prices still rising but at a slower pace.
By Fiona Chan Oct 2, 2008
PRIVATE home prices in Singapore fell between July and September - the first time in over four years and after almost a year of deadlock between buyers and sellers in which home sales all but dried up.
Official estimates released by the Urban Redevelopment Authority (URA) on Thursday showed that overall prices of private residential properties slided 1.8 per cent in the third quarter, led by homes in the central region, which fell by about 2 per cent.
Suburban home prices, however, held steady with a marginal 0.1 per cent rise.
HDB resale flat prices are also still going strong, but at a slower pace. They rose 4.2 per cent in the third quarter, on top of a 4.5 per cent increase in the second quarter.
So far this year, private home prices have risen 2 per cent, while HDB resale prices have increased 13 per cent.
For the first time since 2006, the URA did not highlight the number of upcoming homes in the flash estimates, after concerns that the large headline supply figures would further dampen already gloomy sentiment.
Instead, the agency said housing supply statistics will be released along with the full set of third-quarter property data at the end of October.
The URA said early estimates showed the price index for private residential properties dropped to 174.3 points from 177.5 in the previous three-month period.
This is the first decline in the index since the first quarter of 2004, amid concerns over the global financial turmoil that has caused home sales to slump.
Private home sales in Singapore plummeted 81 per cent in August from a year ago, to the lowest level since March as a combination of global financial turmoil and the traditionally 'unlucky' Hungry Ghost month spooked buyers.
Poor demand and a looming housing glut are threatening to plunge the property market into a prolonged downturn, which could deal a blow to Singapore's top developers such as CapitaLand, CityDev and Keppel Land.
The advance estimates are compiled from transaction prices lodged during the first 10 weeks of the quarter as well as data from new apartments that have been booked.
The URA will release the official price index in four weeks.
3 comments:
Flats in great demand
Pinnacle draws 3 times more applications than the number of flats
By Jessica Cheam
Sep 30, 2008
THEY are among the priciest flats ever launched by the Housing Board, but there has been no shortage of potential buyers.
The 50-storey Pinnacle@Duxton in Tanjong Pagar has attracted 1,467 applications for the 428 four- and five-roomers on offer - that is about 3.5 hopefuls for each unit.
Cheaper homes in less central areas were in even more demand, with applications streaming in at a rate of 20 per new flat in some districts.
HDB's balloting exercise on Friday attracted a total of 4,463 applications for 992 flats on sale in Ang Mo Kio, Queenstown, Jurong West, Kallang/ Whampoa and Tanjong Pagar as of 5pm yesterday.
The 111 five-roomers at the Pinnacle start at $545,000 and hit $645,800 for a 49th storey unit - the most expensive new HDB flats - yet there were still 372 applicants.
Demand for those flats paled in comparison with the 762 applications for just 39 four-room flats in Kallang/Whampoa, priced at between $364,000 and $435,000.
Property analysts said the response was not surprising, considering the underlying demand for new flats from first-time buyers and the preference for cheaper units.
Still, the fact that the Pinnacle racked up more than three times more applications than flats available proves there is strong demand, said PropNex chief executive Mohamed Ismail.
'Buyers have to expect to pay a premium for the prime location of city flats,' said Mr Ismail.
The HDB said the prices of Pinnacle flats were still lower than those of resale flats in the area. HDB figures show five-room flats in Tiong Bahru's Jalan Membina recently selling for $670,000 above the 20th floor. The average price of a five-room flat sold in Jalan Membina and Cantonment Close over the last three months was $624,000.
The response to the ballot also highlighted another emerging hot spot - Jurong, an area once spurned by buyers for being too far from the city.
Five-room flats here were about 11 times oversubscribed - 335 applications for the 30 flats.
ERA Asia-Pacific's assistant vice-president Eugene Lim said new flats here are now more attractive after a masterplan to rejuvenate the area was announced recently.
'It's also currently one of the cheapest housing spots in Singapore. It's not surprising it's moving now,' said Mr Lim.
He also feels those priced at $650,000 are at the top end of what buyers can afford.
'With two incomes, it's still manageable,' he said. In many cases, these flats are cheaper than buying from the resale market, where buyers usually need to pay a cash component upfront to sellers. This is not required for new flats, he added.
Still, HDB 'should be conscious that such pricing of flats are affordable only to a small cross-section of HDB home buyers,' said Mr Ismail.
But the true popularity of the flats has yet to be seen as the number of applications might not reflect the actual take-up rate. Applications for the new flats close on Oct 9.
September 30, 2008
Shouldn’t new HDB flats be priced less than market rate?
I REFER to last Saturday’s article, ‘$645K: HDB’s priciest flats go on sale’.
I was shocked that HDB has priced its new stock of flats in Tanjong Pagar at $545,000 to $645,000. I am not surprised the higher-end flats have relatively few takers due to steep pricing. As it is, HDB has priced its new flats according to surrounding resale market prices and built in a discount before launching them to the public.
I wonder if this is a fair comparison as the property market rides through the up-and-down cycle and if a new buyer buys now, he runs a high risk of buying at the high end of the market trend and may lose on his investment when the market goes down. This often happens to HDB resale or private property buyers who buy high in an uptrend market but lose heavily when the market goes south. It will be tragic if a buyer of a new HDB flat also goes through this financial heartache with his first ever housing unit.
There is generally not much premium earned on buying brand-new HDB flats now. One wonders if it is more prudent to buy a resale unit with the $30,000 rebate given as a sweetener, rather than buy a brand-new unit at such a high price.
Gone are the days when new HDB flats were much cheaper than in the current market. I bought my first new executive flat about 15 years ago at $143,000. I paid less than $500 a month for a mortgage loan. I later sold it a few times over when the property market was booming five years after I bought it. That was my first new HDB flat experience as I could buy only private or resale flats after that.
As the property market matures, I wonder if HDB has lost its mission to allow Singaporeans to own affordable housing with cheap loans. With new flats priced so high, home owners not only have to pay exorbitant loans but also worry that their flat valuation may drop if the market turns sour. Buying a new flat becomes more of a risky investment than providing a roof over one’s family.
HDB also needs to price its new flats better by considering factors other than surrounding resale valuation. To prevent home buyers immediately selling their flats after the five year lock-in period to make a profit, HDB can tie home owners to a longer lock-in period of eight to 10 years, enabling it to price flats cheaper. Many Singaporeans stay in their flats after more than 10 years, some for sentimental reasons, while others do not want to lock themselves into another big mortgage loan when they buy another property.
Gilbert Goh
Home prices fall after 4yrs
HDB resale flat prices still rising but at a slower pace.
By Fiona Chan
Oct 2, 2008
PRIVATE home prices in Singapore fell between July and September - the first time in over four years and after almost a year of deadlock between buyers and sellers in which home sales all but dried up.
Official estimates released by the Urban Redevelopment Authority (URA) on Thursday showed that overall prices of private residential properties slided 1.8 per cent in the third quarter, led by homes in the central region, which fell by about 2 per cent.
Suburban home prices, however, held steady with a marginal 0.1 per cent rise.
HDB resale flat prices are also still going strong, but at a slower pace. They rose 4.2 per cent in the third quarter, on top of a 4.5 per cent increase in the second quarter.
So far this year, private home prices have risen 2 per cent, while HDB resale prices have increased 13 per cent.
For the first time since 2006, the URA did not highlight the number of upcoming homes in the flash estimates, after concerns that the large headline supply figures would further dampen already gloomy sentiment.
Instead, the agency said housing supply statistics will be released along with the full set of third-quarter property data at the end of October.
The URA said early estimates showed the price index for private residential properties dropped to 174.3 points from 177.5 in the previous three-month period.
This is the first decline in the index since the first quarter of 2004, amid concerns over the global financial turmoil that has caused home sales to slump.
Private home sales in Singapore plummeted 81 per cent in August from a year ago, to the lowest level since March as a combination of global financial turmoil and the traditionally 'unlucky' Hungry Ghost month spooked buyers.
Poor demand and a looming housing glut are threatening to plunge the property market into a prolonged downturn, which could deal a blow to Singapore's top developers such as CapitaLand, CityDev and Keppel Land.
The advance estimates are compiled from transaction prices lodged during the first 10 weeks of the quarter as well as data from new apartments that have been booked.
The URA will release the official price index in four weeks.
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