THE Housing and Development Board (HDB) has launched a plot at Bedok Reservoir Crescent for sale by public tender under the design, build and sell scheme (DBSS).

Around 430 public housing units can be built on the site, which is 179,400 square feet in size and can be built up to a maximum gross floor area of 502,400 sq ft.

Analysts expect it to sell for $250-300 per sq ft per plot ratio (psf ppr).

It is likely to be popular with developers because it is an established area, says Dennis Wee, chairman of Dennis Wee Realty.

PropNex chief executive Mohamed Ismail said: ‘The entire Bedok Reservoir belt is being built up into a rich belt of attractive mass-market housing.’

Compared with private homes in the area – such as the Bedok Waterfront collection developed jointly by Frasers Centrepoint and Far East Organization – the DBSS flats will be appealing in price terms, he said. New private apartments in the area are selling for a median price of $1,000 psf, while the DBSS flats should be priced around $600 psf.

Analysts reckon buyer interest in the flats will be strong, as the income ceiling for buying DBSS flats was revised recently. First-time buyers earning up to $10,000 a month can now buy new DBSS flats with a $30,000 CPF Housing Grant.

Including the latest Bedok Reservoir plot, HDB has released three DBSS sites with a combined estimated yield of 1,710 flats so far this year. Another two DBSS sites with a combined estimated yield of 1,210 units – one at Upper Serangoon Road and the other at Jurong West – will be launched for sale in the coming months.

More sites for DBSS development will be made available if there is sustained demand, HDB says.

Flats sold under the DBSS come with a 99-year lease and are offered to buyers under HDB’s eligibility conditions. But the developers who buy such sites have flexibility in designing, pricing and selling the flats – subject to legislation and regulations.

Source: Business Times, 14 Sep 2010

It plans 680-unit project: 60% 4-room flats; 25% 3-room; the rest 5-room

SIM Lian Land, which emerged as the highest bidder for a site in Tampines designated for public housing under the Design, Build and Sell Scheme (DBSS), plans to build about 680 flats on the plot if awarded the site.

‘About 60 per cent of the units will be four-room flats, another 25 per cent will be three-room flats and the remaining 15 per cent will comprise five-room flats,’ Sim Lian Group executive director Diana Kuik told BT yesterday.

Sim Lian’s top bid of about $178.2 million works out to about $261 per square foot of potential gross floor area. The tender drew five bids.

Sim Lian’s price was about 22 per cent higher than the next highest offer of $213.62 per square foot per plot ratio (psf ppr) by Qingdao Construction (Singapore). A joint venture between Hoi Hup Realty and Sunway Developments offered about $205 psf ppr. Realty Consortium (a unit of Koh Brothers) bid $200.91 psf ppr.

The lowest offer of $110 million or $161.20 psf ppr was from Ho Lee Group.

The site will be sold on 103-year leasehold tenure inclusive of a four-year construction period.

DBSS gives developers an opportunity to design, develop, price and sell HDB flats to buyers who have to meet criteria set by the Housing & Development Board, including a monthly household income ceiling of $8,000.

The plot is next to Singapore’s first DBSS project, The Premiere@Tampines, which was also developed by Sim Lian. That is fully sold.

As for the latest DBSS plot, Sim Lian hopes to launch the project around the third quarter of next year, says Ms Kuik.

In March this year, the group clinched a 99-year leasehold condo site at Tampines Ave 1/Ave 10, facing Bedok Reservoir, at a state tender.

It plans to build a 696-unit project to be named Waterview on this plot, with the majority of units being two and three-bedroom apartments. ‘We’ll probably launch the project around Q4 this year,’ said Ms Kuik. Sim Lian paid $302 million or $421 psf ppr for the site.

Sim Lian also has available 62 units at its Clover By the Park condo in Bishan, which is still under construction. Most of these units are three and four-bedders and are priced in the high-$900 to $1,000 psf range. The 39-storey, 99-year leasehold project has a total of 616 units. It was released in June 2008.

Source: Business Times, 4 Aug 2010

Developer’s $178m offer for Tampines plot tops 4 others

SIM Lian Land has put in what is likely to be a record bid for a design, build and sell scheme (DBSS) plot amid buoyant prices in the Housing Board market.

It topped the tender for a Tampines Avenue 5 site, released under HDB’s DBSS, with a higher-than-expected bid of $178.13 million, or $261 per sq ft per plot ratio (psf ppr).

The offer was 22 per cent ahead of the second highest bid of $145.77 million, or $213.6 psf ppr, from China-based Qingdao Construction (Singapore).

In third place was joint venture Hoi Hup Realty and Sunway Developments’ $139.9 million, or $205 psf ppr.

The plot attracted five offers, and construction firm Ho Lee Group came last with its offer of $110 million, or $161 psf ppr.

According to Ngee Ann Polytechnic real estate lecturer Nicholas Mak, Sim Lian’s bid sets a new land price record for a DBSS site and breaks the previous high of $237 psf ppr set in February 2008 for a Bishan site. He had expected the tender to draw up to seven bidders with offers of between $160 and $200 psf ppr.

At $261 psf ppr, Sim Lian will have to sell three-room flats for $380,000 to $400,000, and four-room flats for $530,000 to $550,000, said Mr Mak.

Five-room units would have to be pitched at between $640,000 and $670,000.

Sim Lian executive director Diana Kuik said the developer planned to build 680 homes on the Tampines site. She said the bulk of the units – 60 per cent – will be four-room flats. Three-room flats will account for 25 per cent of the total, while five-room units will make up the remaining 15 per cent.

‘Tampines is an extremely mature estate and demand is very strong for new flats,’ said Ms Kuik.

The Tampines site has a maximum allowable gross floor area of 63,395 sq m, including 1,060 sq m for social and commercial facilities. It is adjacent to Singapore’s first DBSS project, The Premiere@Tampines, also developed by Sim Lian, which placed a bid of $82.22 million, or $113.67 psf ppr, in January 2006.

Response then was overwhelming and saw the pilot project almost five times oversubscribed. The five-room flats eventually went for $308,000 to $450,000.

Market watchers suggest Sim Lian’s aggressive bid may also be because it is better able to control costs as it has its own construction arm.

Under DBSS, private developers can design, build and sell HDB flats directly to buyers, but they have to set aside 95 per cent of the flats for first-time buyers.

Source: Straits Times, 4 Aug 2010

TWO build-to-order (BTO) Housing Board (HDB) projects that will add 1,016 new flats to the market were launched yesterday. The launch means 9,844 flats have been released in seven months, exceeding the 9,000 units offered for the whole of last year.

The projects are Senja Gateway in Bukit Panjang and Corporation Tiara in Jurong West.

Senja Gateway at the junction of Kranji Expressway and Woodlands Road will have 741 standard flats, comprising 254 studios, 313 four-room flats and 174 five-roomers.

Studios of 35 sq m to 45 sq m will cost $67,000 to $95,000, four-room flats of 90 sq m will be from $242,000 to $306,000 while five-roomers of 110 sq m will go from $308,000 to $398,000.

Corporation Tiara in Jurong West, at the junction of Corporation Road and Yung Kuang Road, will have 275 premium flats, comprising 171 four-roomers and 104 five-roomers.

Four-roomers of between 90 sq m and 93 sq m will cost between $242,000 and $325,000 while five-room flats of 110 sq m to 113 sq m will cost between $304,000 and $389,000.

Under the BTO scheme, flats are built only when a certain level of demand for the project is met.

PropNex chief executive Mohamed Ismail expects this launch to be more than three times oversubscribed as demand is still strong due to the high cash-over-valuations (COV) asked for in the HDB resale market.

He added that the pattern of demand from past BTO launches showed that four- and five-room flats were often the most popular.

‘I think demand will be sustained throughout this year and we might even see a record number of BTO flats being launched,’ he said.

The HDB said that if demand from first-time buyers is sustained, it is prepared to offer up to 16,000 BTO flats this year. This is a significant supply as the total annual take-up of HDB flats in the last 10 years ranged from 7,000 in 2006 to 16,100 in 2000, with flats left unsold almost every year, the board said.

Buyers can expect about 1,400 flats to be launched in Yishun next month while upcoming projects include areas like Woodlands, Punggol and Sengkang.

The BTO stock will also be supplemented by an upcoming supply of 4,700 units under the design, build and sell scheme (DBSS) and executive condominium scheme such as a site launched for tender in Tampines Avenue 5 last month.

The HDB said it is prepared to launch more DBSS sites if demand keeps up.

Applications for the BTO flats launched yesterday can be made online at www.hdb.gov.sg until Aug 11.

Source: Straits Times, 30 Jul 2010

Reviewing some of the rules would help to rein in runaway prices in the private property market

HALF-a-million dollars is a lot of money for the average young couple, but even this was not sufficient for a new five-room Design, Build and Sell flat at a recent launch. And if one aspires to a private condominium, the amount is easily doubled, resulting in a monthly loan repayment of several thousand dollars for a long time.

Along with the rising tide, prices of resale private and HDB apartments have gone up too. And new entrants hoping to get into the market via the resale route face larger cash-over-valuation demands.

Those who have a roof over their heads are at a slight advantage, as price rises may increase their ability to move if they wish. But even this is not without risk – moving up to a more expensive home could mean a steep drop should times change.

In Parliament yesterday, Minister for National Development Mah Bow Tan mentioned that we are currently seeing signs of heightened speculative activity though not extreme. The proportion of sub-sellers has increased and developers sold 10,000 units in the first seven months of this year against 4,300 for the whole of 2008. Private housing prices have also significantly increased since June.

He added that it is in everyone’s interest to have a steady property market where prices move in line with economic fundamentals. If a property bubble develops, a severe correction must take place with serious consequences for the economy and the property market.

Prices are largely a result of supply and demand, tempered by economic indicators and rules and regulations. The recent surge in prices probably has much to do with anticipated recovery from the recession and very low interest rates. Cash and loans tend to follow where there is money to be made. And right now, many see real estate as a good hedge against inflation, capital appreciation, a producer of recurrent income – as well as a nice place to come home to.

But some who aspire to buy their first home may feel the government could do more to cool the market.

In an ideal situation, there should be minimal constraints, so prices can follow the supply-demand curve freely. At present, there are various incentives and entry barriers to the HDB market – all designed to ensure “equalisation” across the social spectrum and promote pro-family values and the national interest. The rises in private property prices may perhaps be due to some of these regulations that give little alternative options for home buyers or investors.

For new entrants, buying direct from HDB is still probably the best option, so as to benefit from various incentives. But perhaps more can be done to allow home buyers and home owners wider choices. Relaxing certain rules could result in many more options, and spell good news for the financial industry.

Probably more than 80 per cent of Singaporeans live in HDB apartments, the sale and resale of which are subject to fairly tight regulations. Broadly, these fall into a few categories – time barriers, financial standing and pro-family incentives. For example, first-time buyers must stay in their apartment for at least five years before selling, and owners of private property who buy resale HDB apartments must stay in them.

Perhaps there is scope to gradually relax some of these rules, while retaining those that encourage pro-family values and social balance.

A shorter minimum time bar would allow for lateral or upward mobility, and open up more buying options for new entrants who cannot wait and therefore wish to consider the resale market. They could consider buying a near-new HDB apartment, albeit at a premium, but still at a much lower price than a private condominium.

Allowing owners of HDB and private properties to buy resale HDB apartments as an investment, subject to certain restrictions, could make for more efficient supply-demand dynamics. To minimise speculation, such purchases could be restricted to, say, one unit per family, of a certain minimum value, with a holding period of, say, at least four years. This lends long-term support to overall prices of resale HDB apartments, while at the same time opening up a lot more for rental, which should eventually moderate rents. This would benefit the many resident foreigners. Some investors in the private property market may also redo their sums if they find it hard to lease their apartments out at a reasonable return down the road.

While it can be argued that opening the resale HDB market as an investment option can cause prices to creep up, this will benefit the majority of current HDB owners and open up more options for many others – either to have a nicer place to call home if they choose, or to plan for recurring income for old age.

In any event, the large supply of existing HDB apartments and future supply should moderate any temporary price rise. After all, for every willing seller, there must be a willing buyer or investor.

But perhaps the greatest benefit of reviewing some of the rules would be to help rein in runaway prices in the private property market, as buyers and those wishing to rent would have more options.

Source: Business Times, 15 Sep 2009

Increases of up to $20k surprise analysts, given buyers’ income ceiling

PROPERTY developers have raised the prices of condominium-style public flats for the first time since their inception, in a bid to ride the mass market property boom.

A check by The Straits Times revealed that prices of flats at Natura Loft at Bishan and The Peak@Toa Payoh have risen by up to 3 per cent, or $20,000, depending on the attributes of the flats.

This move has surprised industry analysts, as buyers of such hybrid flats under the Housing Board’s Design, Build and Sell scheme (DBSS) have a fixed household income ceiling of $8,000.

‘The prices are higher but the income ceiling is still the same. These buyers are unlikely to have seen their wages rise, given the recent recession,’ said one industry analyst who declined to be named.

DBSS projects are designed, built and sold by private developers. They offer condominium-style fittings, layouts and facilities but are subject to public housing rules, such as the household income ceiling, ethnic quotas and a five-year minimum occupation period.

Developers told The Straits Times yesterday their move was in line with the booming market, with a stunning 2,767 private homes sold in July.

Mass market condominiums such as Centro Residences in Ang Mo Kio and Trevista in Toa Payoh have been launched in these mature HDB estates to good response; Centro reportedly sold at the $1,100 psf level and Trevista at $900 psf.

Three centrally located DBSS projects – The Peak@Toa Payoh, Park Central in Ang Mo Kio and Natura Loft at Bishan – priced slightly above $500 psf, have reported brisk sales, as demand for private homes has spilled into the HDB market.

Mr Zuo Hai Bin, managing director of Natura Loft developer QingJian Realty, said the 480-unit project is now more than 80 per cent sold, up from 75 per cent just a month or so ago.

Four-roomers are now all sold out, leaving five-room flats. QingJian has raised prices by between $5,000 and $20,000 on the back of an improved market, he said. But the firm has also been giving away free household appliances to attract buyers, he added.

The Peak’s developer, Hoi Hup Sunway, said prices had risen only for selected units by about 1per cent, or $5,000 to $7,000. ‘The public is still receptive to the development and demand is still strong,’ said its spokesman.

Other DBSS projects, like Park Central in Ang Mo Kio and Parc Lumiere in Simei, however, have maintained their prices.

Managing director David Liew, of Park Central developer United Engineers Developments, said prices had held at an average $500 psf as ‘DBSS housing is, after all, public housing’.

‘There’s an obligation by us to keep the selling price relatively affordable for the masses,’ he added.

From a commercial viewpoint, said PropNex chief executive Mohamed Ismail, it is ‘only natural that developers want to ride the market momentum’.

But others feel the real competition for DBSS flats is not mass market condominiums, but HDB resale flats.

‘The price gap between DBSS flats and resale HDB flats must not be too wide. Otherwise, developers will find it takes a long time to sell their flats and DBSS projects may not be viable in the future,’ said Ngee Ann Polytechnic real estate lecturer Nicholas Mak.

When contacted, HDB said that, while developers can decide and adjust selling prices, they should ensure that prices are affordable to the target group of buyers.

‘If they overprice DBSS flats, they face the risk of poor demand and having to hold onto vacant flats. Therefore, it is in their own interest to set appropriate pricing in order to sell their flats,’ said an HDB spokesman.

Home buyer Cheow Kai Ying, 27, is one who feels that couples with an $8,000 income ceiling are unlikely to be able to afford such upmarket HDB flats if prices increase any further.

‘Public flats are, after all, meant to be subsidised,’ said Mrs Cheow.

Source: Straits Times, 5 Sep 2009

But at prices of $500,000 to $730,000, the Design, Build and Sell Scheme units don’t come cheap

Account manager Samuel Lee and his wife were among those who bought a five-room flat at Parc Lumiere in Simei.

Although the recently launched condo- style HDB project offers something more than a regular HDB flat, its location – more than anything else – was what sealed the $477,000 deal for Mr Lee, 27.

‘Facilities-wise, it can’t beat The Peak and Natura Loft,’ he said, referring to two similar projects.
‘It’s the location. It is literally just across the road from my in-laws’.’

Thanks to buyers like him, Parc Lumiere is nearly sold out, even though its first-come, first-served sale method meant that many buyers had to brave the heat and queue for hours before they got to book a unit.

However, those keen on a condo-style HDB flat – or what HDB terms a Design, Build and Sell Scheme (DBSS) flat – need not fret because there are still units available.

The 360-unit Parc Lumiere, for instance, has 30 five-room units left for sale, while the 480-unit Natura Loft in Bishan has more than 100 five-room units left.

DBSS projects are designed, built and sold by private developers.

They are ungated and are subject to public housing rules, such as the $8,000 household income ceiling, ethnic quota and a five-year minimum occupation period.

But unlike regular HDB flats, they offer condo-style fittings and layouts.

There are balconies, bay windows and timber flooring in the bedrooms. The kitchen comes with built-in cabinets and the rooms with built-in wardrobes.

They do not come cheap though. As HSR Property Group executive director Eric Cheng said: ‘DBSS projects offer very good concepts, interior finishes and layouts, but the only problem is the price. Those with insufficient CPF savings will feel the pinch of the premium for those extras.’

ERA Asia Pacific associate director Eugene Lim pointed out that at their current pricing of $500,000 to $730,000, DBSS flats are priced just a shade below mass market condos in the range of $650,000 to $900,000. ‘There is already a slight overlap,’ he said.

Property agents said last month before the launch of Parc Lumiere and The Peak that there might be some resistance if DBSS flats were priced above $500,000, particularly given the recession.

Prices at the 1,203-unit The Peak @ Toa Payoh go up to $722,000. At Natura Loft, developer Qingjian Realty said five-room units are available at $590,000 to $739,000, or from $456 per square foot to $578 psf.

PropNex spokesman Adam Tan said that while DBSS projects come with designer furnishings that are typical of condominium units, buyers need to be aware of the fact that outside of one’s door, the environment is like that of an HDB estate.

‘There are no facilities like pools,’ he said.

DBSS projects are for those who want the interior atmosphere of a condo but not the facilities and the relatively hefty maintenance charges that come with them, he added.

HSR’s Mr Cheng said DBSS flat buyers are also buying a home in a conducive environment that has been carefully planned by the developer. DBSS flats are also usually in very tall blocks, and some have high ceilings typical of private flats.

Indeed, each DBSS project is different in design and size. Each will attempt to offer features that promise a bit more exclusivity than your regular HDB estate.

Parc Lumiere and Natura Loft offer elevated landscape decks. The Peak has a card-access security system at all ground-floor lift lobbies.

At Park Central in Ang Mo Kio, the rooftop garden above the carpark features a 400m jogging track.

Unlike regular flats, DBSS projects may offer premium appliances. Natura Loft, for instance, offers rain showers and Electrolux cooker hobs, while The Peak offers Daikin air-conditioning systems.

Currently, there is just one other vacant DBSS site in Bedok Reservoir Crescent, but the Government has yet to launch it for sale.

Although falling private-home prices have presented low-end home buyers with more options, some have their hearts firmly set on a DBSS project.

Mr Lee, for instance, compared Parc Lumiere to a Melville Park condo apartment but decided against the smaller unit in the latter.

‘I’ve also considered the resale value. When the Tampines DBSS project came out, people said the price was very high. Now, based on the experience of the Tampines DBSS, I don’t think we will lose out.’

In late 2006, the first DBSS project, Premiere @ Tampines, drew nearly 6,000 applications for 616 flats priced from $138,000 to $450,000. Housing prices have risen since.

But whether DBSS buyers can make a profit on resale will depend on how the mass market moves, said ERA’s Mr Lim.

For DBSS flats to be resold at say $600,000 to $850,000, mass market condo prices will need to move up higher to between $800,000 and more than $1 million, he said.

‘This is possible if there is another economic boom that brings all-round prosperity and the whole property market moves up across all categories,’ said Mr Lim.

‘Whether it can happen in seven to eight years, it is difficult to predict. If it does happen, it will likely be a window period for these DBSS flat owners to make the resale profits. Usually, the best time to sell a new flat on the resale market is when it is about five to eight years old. Thereafter, prices may dip again.’

Source: Straits Times, 17 May 2009

DEMAND for flats at The Peak @ Toa Payoh, a condo-like public housing, has been overwhelming.

When the developer closed its office at 6pm yesterday, there were already 2,900 applications for the 1,203-unit project.

This means there were roughly five applications for every two units. The final number might even be higher as electronic applications closed only at midnight last night.

The project at Lorong 1A Toa Payoh comes under the design, build and sell scheme (DBSS), and offers premium condo-like fittings.

This project by a Hoi Hup-led consortium is being sold by ballot. Unlike private condominiums, these projects do not have facilities such as swimming pools and gymnasiums.

Observers say the demand is surprising given that for the same price, buyers are spoilt for choice in the current lacklustre market.

Source: Straits Times, 29 April 2009

Since we got married two years ago, my husband and I have resisted applying for any random Housing Board flat.

We wanted to preserve the privileges and priorities awarded to us as first-time applicants. Under HDB’s computerised balloting system, a first-time applicant gets double the chances of regular applicants.

Flighty buyers who send in frivolous applications only to pull out later are pushed to the back of the queue the next time they apply.

So you can imagine that the first application for an HDB flat is a precious trump card for any couple. And we wanted to save it for the right flat and the right project.

However, when the right HDB project did come along last week, I found to my dismay that my trump card was useless. Instead of relying on a trusty computerised balloting system, I had to physically queue alongside hundreds of others for a flat at the Design, Build and Sell Scheme (DBSS) project in Simei.

The queue lasted two days. The fatigue, however, lingered on for the rest of the week.

Unlike the case of normal HDB projects, the developers of DBSS projects have the flexibility to decide on the sales terms, which include how the flats are sold.

I have been eyeing the Simei DBSS project for some time and thought that unlike other DBSS projects, this one was in a neighbourhood with unrealised potential.

Although Simei is a relatively quiet neighbourhood now, the area is expected to come alive when the fourth university comes up in 2011. Parc Lumiere, as the Simei project is called, is also a more exclusive project with only 360 units.

So when developer Sim Lian Group advertised in the papers two Fridays ago that it would be launching Parc Lumiere the following day, I was worried after reading that units would be sold on a first-come, first-served basis. With only 360 units up for grabs, the competition was going to be tough.

While the showflat was scheduled to open for viewing on Saturday, April 18, sales would begin only on Tuesday, three days later.

But, as though tempting people to queue, Sim Lian added a caveat that sales might begin earlier if there was ‘overwhelming demand’.

I knew then that I would have to compete with some over-eager Singaporeans. I didn’t have an inkling of just how over-eager they were.

The first interested buyers began queuing up at 8am on Friday, the very same day Sim Lian’s advertisement was published and four whole days before the sale date.

Busy at work, I didn’t know that a queue had begun snaking outside the Parc Lumiere showflat. According to media reports, by 9pm that day there were more than 200 people in the queue.

I found out only when I got home at midnight and read the online news. By the time my husband rushed down to the showflat, we were the 318th in the queue, a woeful figure considering there were only 360 units available.

Both of us do not have much patience for queues. I would rather give up a freebie than stand in line for 15 minutes. I would forgo the most exciting roller coaster ride at the world’s best theme park if it means having to queue for an hour. I think there are better things to do in life than stand in line.

Which is why I think HDB switching to a balloting system in 2007 was one of the best things that ever happened to Singapore society. Under the balloting system, a computer ballot will determine when the first batch of applicants get to book a flat of their choice.

The system is fair. First-timers get twice the chance while first-timers with kids are four times more likely to be successful compared with the rest.

No more week-long queues at the HDB Hub. No more squabbles and fights over who came first. No more exploitation of old, retired parents who stand in line for their working children. No one needs to queue and everything is done in an orderly manner.

That first night, my husband offered to queue outside the showflat alone since I had work the next day. He spent the night on a plastic chair in a humid and crowded tent.

Although Sim Lian announced soon after that it would bring forward its sale date to Saturday, there was no chance of leaving after securing a queue number. The developer’s marketing agents created frequent excuses to get people to stay. We were herded from one queue to another.

First, there was the queue to indicate our interest in entering the showflat at 8am on Saturday. Then there was the queue to get into the showflat proper. After which came the queue for a blue file into which applicants had to insert their documents. This was followed by the queue to file an HDB application online. Only after all that came the queue to book our unit of choice.

If you were not there when your queue number was called, your name would be struck off the list.
So for more than 18 hours, some 400 tired and sleepy applicants were moved from queue to queue.

Sim Lian probably wanted to keep people physically in the queue because of what happened at the Tampines DBSS sale of 121 leftover flats two years ago. The developer had issued queue numbers and asked people to go home.

What they didn’t count on was another group of interested buyers turning up to queue about two hours later. A fight almost broke out in the morning when those with queue numbers turned up.

This was not the first time fights almost broke out in a queue for an HDB flat. In February 2007, things got ugly outside the HDB Hub building among people who were queuing up for flats in mature estates. The queue had begun an entire week before the sale date.

With Singapore’s blemished history of queuing for HDB flats, I wonder why HDB allowed Sim Lian to sell the Simei DBSS flats on a first-come, first-served basis.

DBSS flats are essentially HDB flats and their sale is still governed by HDB rules. Buyers’ incomes cannot exceed $8,000 and the ethnic quota still has to be fulfilled.

If these aspects of the sale are done the HDB way, shouldn’t the way the flats are sold be done the HDB way too?

The balloting system is not only more convenient, it is fair as well because it ensures that everyone gets an equal chance, not just those who can take leave from work at a moment’s notice or those who have retired parents who don’t mind queuing for their children.

After a 36-hour wait, my husband and I managed to get a high-floor unit of our choice.

Although we are happy and relieved, we do wish that our first experience of buying an HDB flat could have been a lot less stressful and tiring.

Source: Straits Times, 26 April 2009

BUYERS of resale HDB flats now tend to need much less cash upfront to secure a home – and those looking at bigger flats may need none at all.

Data released yesterday by the HDB showed first-quarter median cash-over-valuation levels fell substantially to $4,000 in the first quarter, from $15,000 in the previous quarter.

This refers to the sum that flat buyers pay above a valuation set by HDB-appointed private valuers. Buyers can use Central Provident Fund money for any sum up to this level but need cash for any more.

The significant fall is attributable to twin factors – falling resale flat prices in a deteriorating economy and higher valuation levels, after a run-up in prices over the past year or so before recent falls.

HDB resale flats fell 0.8 per cent in the first quarter, just over the initial estimate of 0.6 per cent, after prices peaked late last year. However, resale prices are still at healthy levels, about 2 per cent above the 1996 peak, said Knight Frank’s director of consultancy and research Nicholas Mak.

Higher HDB valuations are why resale HDB prices dipped only slightly despite a far lower cash portion, said PropNex chief executive Mohamed Ismail. ‘It is evident that public housing remains resilient in this gloomy economy, thanks to continued strong demand for resale flats.

The alternatives, Build-To-Order and Design, Build and Sell Scheme projects, are still years away from completion.’

But things may change. ‘Generally, though valuations are still high, banks are becoming more conservative and there have been cases where buyers are offered only 70 per cent loans instead of the usual 80 per cent,’ said ERA Asia Pacific’s associate director, Mr Eugene Lim. That means more higher-value HDB resale flats are now being sold below valuation – in some cases, perhaps, up to $30,000 to $50,000 below, he said.

‘For larger flats, the days of transactions with cash-over-valuation are over,’ adds Mr Lim.

ERA’s first-quarter resale HDB deals show 21 per cent of flats sold below valuation, 19 per cent at valuation. Of the rest, most fetched no more than $15,000 cash, said Mr Lim.

First-quarter median sublet rents were unchanged for the smaller flats, and down $100 to $200 for the four-room and larger flats.

In the first quarter, more people bought smaller three- to four-room flats. Their prices fell a little.

The larger flats saw a slightly bigger price fall of up to 2.8 per cent for executive flats, said Mr Mak. These larger flats will continue to face stronger downward price pressure, property experts said.

They expect increased demand for smaller flats as home buyers exercise prudence. ‘In the coming quarters, we are likely to see more and more larger flats sold at or below valuation as the harsh economic conditions hit home,’ said Mr Lim.

The good news is that the fall in HDB resale prices is not expected to dent upgrader demand for private homes as the rate at which HDB resale flat prices are falling is still less than that of private homes, Mr Mak said.

Source: Straits Times, 25 April 2009