HDB resale prices rise in August to just 0.1% below peak; record high of 26 million-dollar flats sold: SRX
The Straits Times, 9 Sep 2021, Thu 11:18 am
By Michelle Ng
Housing Board resale prices rose for the 14th consecutive month, climbing at a faster pace of 1.1 per cent in August compared with July, according to flash data from real estate portal SRX on Thursday (Sept 9).
Year on year, resale prices were 13.7 per cent higher than in August 2020, with last month’s prices just 0.1 per cent off the peak in April 2013.
This means September prices are likely to hit a record high as strong demand continues to outstrip flat supply.
With more construction delays expected, resale flat demand strengthened despite August being the Hungry Ghost month, when sales typically slow down.
Last month, The Straits Times reported that five Build-To-Order (BTO) projects are facing even longer delays as their main contractor Greatearth has gone bust due to financial difficulties.
The completion dates for these BTO projects, and many other ongoing ones, had already been pushed back because of manpower and supply disruptions in the construction sector caused by the Covid-19 pandemic.
Ms Christine Sun, senior vice-president of research and analytics at OrangeTee & Tie, said more home seekers could have turned to the resale market in the face of uncertainty in the BTO market.
"Some of the affected buyers may have chosen to pay slightly more for resale flats, even if the units are older or are situated in a slightly less ideal location since resale flats are already completed. With a completed home, they have more certainty and can proceed with their wedding or family planning," she said.
Price growth was observed across both mature and non-mature estates, and all room types, according to SRX data.
Ms Sun said the broad-based price gains show that even though prices were climbing in many locations, buyers were willing to match the asking price.
"Perhaps the buyers were mindful that with more buyers than sellers in the market now, prices may rise further in the coming months. Therefore, they are willing to match the asking prices to secure a unit quickly," she said.
A total of 2,748 HDB resale flats changed hands last month, increasing 3.2 per cent from the month before.
August also saw 26 resale flats sold for at least $1 million, the highest number of million-dollar flats sold in a month on record.
The most expensive flat sold last month was a $1.28 million five-room Design, Build and Sell Scheme (DBSS) unit at Natura Loft in Bishan Street 24.
The 26 flats made up 0.9 per cent of last month's total resale transactions.
This brings the total number of such flats to 151 in the first eight months of this years, in what has already been a record year for million-dollar flats.
There were 82 million-dollar flats for the whole of last year.
ERA Realty head of research and consultancy Nicholas Mak said the high vaccination rate in Singapore could also have contributed to the overall market confidence.
At the end of August, the nation's vaccination rate reached a new milestone with 80 per cent of the population having received two doses of the vaccine.
"In the absence of any unexpected government intervention, the rise in HDB resale prices is expected to continue in the coming months," he said.
Read more at: https://www.straitstimes.com/singapore/housing/hdb-resale-prices-rise-in-august-to-just-01-below-peak-record-high-of-26-million
Why are HDB resale prices rising and what does this mean for home buyers?
The Straits Times, 10 Sep 2021, Fri
By Michelle Ng
Prices of Housing Board resale flats have been climbing for 14 straight months, since Singapore exited the circuit breaker period in June last year, and are almost reaching an all-time high.
Barring any government intervention, prices are widely expected by many property analysts to continue rising in the coming months.
The steadily rising prices of HDB resale flats, with little to no sign of slowing down, in a pandemic-stricken year has set off concerns about home affordability.
Even the Hungry Ghost Festival last month, when market activities typically slow down as it is considered an inauspicious month, did not put a damper on the resale market.
Flash data from real estate portal SRX released on Thursday (Sept 9) estimates that last month's prices rose at a faster pace compared with July, with year-on-year prices 13.7 per cent higher than in August 2020.
Last month's prices were just 0.1 per cent off the peak in April 2013, the data showed.
The official HDB resale price index, which uses a different method of calculation, shows a more conservative figure of 2 per cent off the peak in the second quarter of 2013.
A clearer picture will be painted when HDB releases its flash estimates for the third quarter of this year, which is expected on Oct 1.
But one thing is for certain: HDB resale flats are currently the most expensive in recent years and prices are on the cusp of hitting an all-time high.
An eye-watering 151 resale flats have already changed hands for at least $1 million in the first eight months of this year. There were 82 such deals in 2020 and 64 in 2019.
If the current trend continues, resale prices may well surpass the previous 2013 high this month, if not the next.
Some analysts say the strong demand for resale flats can be largely attributed to the multiple delays plaguing Build-To-Order (BTO) projects - the most affordable housing option for Singaporeans.
Many ongoing BTO projects are facing delays of a year or more due to supply and manpower shortages in the construction industry caused by the pandemic.
Last month, some 2,900 home buyers across five BTO projects were hit with even longer delays as their main contractor Greatearth went into liquidation.
Things may worsen as the temporary Covid-19 relief measures for construction companies peter out at the end of this month.
Lawyers and property analysts say there is a risk of more contractors finding themselves in similar financial difficulties, which could lead to more home buyers facing even longer waiting time.
So far, about 43,000 households are affected by BTO construction delays, according to figures provided by the Ministry of National Development (MND) in April.
HDB has said it will consider allowing home buyers affected by the delays to cancel their BTO flat booking without penalties so that they can get a resale flat to meet urgent housing needs.
The uncertainty surrounding BTO completion dates could have resulted in more home seekers turning to resale flats to fulfil their housing needs.
In addition, prices of some new mass-market condominiums have also gone up in recent months, pushing some potential condo buyers to seek out HDB resale flats instead.
Some private property downgraders, particularly the empty-nesters, could also be cashing in on a burgeoning private resale market and buying HDB resale flats to free up funds for retirement needs.
Savvy property agents have also capitalised on the buoyant HDB resale market.
It is not uncommon to hear of agents knocking on doors in high-demand areas such as Bishan, Toa Payoh and Clementi to persuade home owners to cash in and sell their well-located units while the market is hot.
In a bull market, where bargaining powers rest largely with sellers, buyers appear to have also accepted the fact that they may have to pay cash over valuation (COV) for their dream units and are prepared to do so.
COV happens when a resale flat is sold above its actual HDB valuation, and the difference can only be paid in cash by the buyer. This further inflates unit prices.
Despite this, a recent consumer survey of 1,012 Singaporeans conducted by real estate firm PropertyGuru between May and July this year found that about 33 per cent of respondents said they were willing to pay a COV.
Around one in three buyers of a HDB resale flat paid above market valuation this year, an increase from one in five last year, according to figures released by MND in July.
In fact, ERA Realty head of research and consultancy Nicholas Mak said he expects the HDB resale price index to expand by 8 per cent to 12 per cent year-on-year in the next 12 months.
Huttons Asia chief executive Mark Yip said he foresees prices to increase by more than 10 per cent, with close to 30,000 resale units changing hands this year, up from the 24,000 units last year.
When resale prices soared in 2013, the Monetary Authority of Singapore tightened the loan eligibility of buyers by reducing the mortgage servicing ratio (MSR) from 35 per cent to 30 per cent, for both bank loans and HDB loans.
These percentages refer to the proportion of a buyer's gross monthly income that can be used for loan repayments.
In addition, maximum loan tenures for HDB loans were reduced from 30 years to 25 years, and from 35 years to 30 years for private bank loans.
That brought the price of a five-room HDB resale flat in Toa Payoh down to $712,500 by the third quarter of 2013 compared with the median price of $750,000 in the second quarter.
Then National Development Minister Khaw Boon Wan said the measures were meant to help stabilise and "restore the balance in the HDB market", which heated up rapidly from 2011 to 2012 due to a housing shortage.
While the authorities have made clear that they are keeping a close eye on the property market here, analysts said they do not expect any major cooling measures at the moment as there are more pressing issues at hand, such as the safe reopening of Singapore amid rising Covid-19 cases.
ERA's Mr Mak said the Government will be cautious when introducing any measures, as those that are aimed at restricting or reducing demand are often "painful and unpopular".
For now, overcoming construction delays of BTO flats could still help slow the growth in HDB resale prices, the analysts said.
New P1 registration rules from 2022: More places to be set aside under Phase 2C to ensure more kids attend school near home
The Straits Times, 10 Sep 2021, Fri
By Ang Qing
More Primary 1 places will be set aside from the next registration exercise to take in children who do not qualify for priority admission.
From next year, the number of places reserved for this group will be doubled to 40, said the Ministry of Education (MOE) on Thursday (Sept 9).
They are currently eligible for Phase 2C of the annual exercise - the open phase for those who have no links with the school and priority is given to those who live nearby.
Read more at: https://www.straitstimes.com/singapore/parenting-education/new-p1-registration-rules-for-2022-more-places-to-be-set-aside-under
The new urban sanctuary
The Business Times, 10 Sep 2021, Fri 5:50 am
By Tay Suan Chiang
LIVING in a pandemic era has changed the way people look at their homes. Once a haven to return to after work to relax, it now does double duty as office and home. And as activities outside of home are now limited, the focus of entertainment has also switched to one's own turf. As more owners reconfigure their apartments or houses for a 24/7 lifestyle, it hasn't taken property developers long to follow suit.
Where once their priority would have been to pack as many units as they could into a project with some token landscaping and amenities thrown in, they are now adding more details in response to what they feel homeowners are looking for.
"Well-being" is now a buzzword for developers who are also incorporating more nature into their designs, with amenities that help build neighbourliness, and multifunctional interiors.
Read more at: https://www.businesstimes.com.sg/lifestyle/feature/the-new-urban-sanctuary