HDB flats are still nest eggs for retirement needs: Lawrence Wong - SRX

LEASEHOLD properties are still a good store of asset value, so long as you plan ahead and make prudent housing decisions, said National Development Minister Lawrence Wong in a Facebook post.

This is a follow-up to his cautionary note on March 24 on the high prices of older Housing Board flats on the resale market, which generated discussions and debate over the 99-year lease, he said.

HDB flats, like many private properties, are sold on a 99-year lease.

Said Mr Wong on Wednesday: "To begin with, Singaporean couples enjoy significant subsidies when they purchase a HDB flat for the first time, be it a new flat or one from the resale market."

A 30-year-old couple, for example, with a combined monthly income of S$5,000 and looking for a resale flat in Woodlands near their parents can get up to S$75,000 in grants off the resale flat price and should easily afford a flat with a lease of 90 years.

Mr Wong said: "Thirty-five years later, the couple will be 65 and the remaining lease of the flat will be 55 years. They still have an asset which can be monetised for retirement."

This is already happening in Woodlands, he added, sharing the example of a 65-year-old elderly couple living in a four-room flat with 55 years of lease remaining.

Through the Silver Housing Bonus scheme, the couple can sell their flat and right-size to a nearby two-room Flexi flat with a 30-year lease, while enjoying a bonus of S$20,000 in cash.

Said Mr Wong: "They can also get quite a lot of money from the sale proceeds - around S$100,000 upfront in cash, plus S$500 per month of additional income for their retirement (on top of what they would get through CPF Life)."

Alternatively, they can apply for the Lease Buyback Scheme, which allows them to continue living in the flat for 30 years and sell the remaining 25 years of lease back to HDB, he pointed out. This would give them S$47,000 in cash and a monthly retirement income of S$400 under the scheme, on top of a cash bonus of S$10,000.

"The cash amount is not as much as if they were to right-size, but that's because they can continue to stay in the same flat, and also have the option to rent out a room," Mr Wong added. These examples are typical of many HDB households today, he said.

"The general point is that the HDB leasehold flat is not only a good home, but also a nest-egg for future retirement needs. That's what we have achieved and that's what we will continue to ensure - both now and in the future."

The Business Times

Source: SRX (13 Apr 2017)

SRX: HDB rental slide in March outpaces that for private condos - SRX

RENTS of HDB flats eased at a bigger pace year on year (y-o-y) in March 2017 compared with rents of non-landed private homes, according to latest flash estimates from SRX Property.

On a month-on-month (m-o-m) basis, rents for both categories fell.

SRX's rental index for private apartments and condos fell one per cent m-o-m in March - contrasting with a 0.7 per cent rise m-o-m in February.

The index has shrunk 3.9 per cent y-o-y from March 2016 and is also 19.1 per cent below its peak in January 2013.

Giving a finer split by geographical region, SRX said that the sub-indices for the prime areas or Core Central Region (CCR), city-fringe or Rest of Central Region (RCR) and the suburbs or Outside Central Region (OCR) all posted y-o-y drops of 3.9 per cent, 3.7 per cent and 4.1 per cent respectively.

An estimated 4,549 non-landed private homes were rented last month, up 14.6 per cent from 3,971 units in the preceding month. Year on year, the rental volume in March 2017 was 1.3 per cent lower than the 4,611 units in March 2016.

In the HDB flat segment, SRX Property's rental index eased 0.5 per cent m-o-m in March 2017, the same percentage drop as recorded in February 2017. The index was 4.7 per cent lower y-o-y compared with March 2016 and also 13.9 per cent below its August 2013 peak.

SRX Property estimates that 2,045 HDB flats were rented last month - an increase of 32.3 per cent from the previous month's 1,546 units but a drop of 7.5 per cent from a year ago.

Savills Singapore research head Alan Cheong said that the rental market for HDB flats may take a longer time to recover fully compared with private apartment and condo rents.

"The rate of rental decline appears to remain rather stubborn at levels significantly below zero per cent, on a m-o-m basis, especially in the case of four-room and three-room HDB flats."

This suggests that the malaise facing the HDB rental market is more broad-based and has a stronger momentum than the non-landed private residential sector, he added.

"HDB rents are expected to remain soft in 2017 as the lower end of the Employment Pass, S-Pass and Work Permit economy continues to be beset with lower demand for workers," argued Mr Cheong.

Private apartment and condo rents are expected to remain soft at least till the end of this year - with the high-end segment likely to bear the brunt of a soft expatriate leasing market with rents contracting 5-10 per cent.

"Rents in the RCR and OCR are expected to decline by 3 per cent and 5 per cent respectively," he said.

Nevertheless, rents should start to build a base by the end of 2017 as the pace of new private home completions falls sharply in 2018. "The point of inflexion for rents in the private non-landed residential sector may however only come in mid-2018."

The Business Times

Source: SRX (13 Apr 2017)

Private home prices slipped 0.5% in 1Q2017 - The Edge Property

Private home prices continued to fall for a 14th consecutive quarter, shedding 0.5% q-o-q in 1Q2017, according to the Urban Redevelopment Authority's (URA) latest flash estimates. It was the same rate of decline as the previous quarter.

Prices of non-landed homes in Core Central Region (CCR) was back in the red with a 0.2% decline in 1Q2017 as opposed to a 0.1% increase in 4Q2016. Those in Rest of Central Region (RCR) remained unchanged in 1Q2017, following a 2.0% dip in 4Q2016. In Outside Central Region (OCR), prices bucked the trend, inching up 0.1% in 1Q2017, after a 0.6% decline in 4Q2016.

"The buoyant OCR primary market helped to firm prices in the suburban non-landed market in 1Q2017," says Ong Teck Hui, national director of research and consultancy at JLL. 

Ong expects positive buying sentiments seen in the first quarter to continue with the market remain upbeat. "Healthy sales volume would eventually lead to prices stabilising especially in the non-landed market although short term fluctuations in the indices may be expected," adds Ong. 

In the public housing segment, prices of resale flats fell for second consecutive quarter with a 0.6% decline in 1Q2017, following a 0.1% q-o-q dip in 4Q2016.

"This could possibly be an one off occurrence," according to Eugene Lim,  key executive officer at ERA Realty Network. He notes that the main cause could be the low volume of resale transactions seen over the January and February period due to the Chinese New Year season.

Lim remains optimistic that the HDB resale market has largely stabilised. He expects HDB resale transaction volume to increase to about 22,000 to 23,000 units in 2017, with prices edging up slightly by 0.1% to 0.5% for the full year.

In May 2017, HDB will roll out about 4,600 Build-To-Order (BTO) flats Woodlands, Yishun, Bidadari and Geylang. HDB also plan to offer about 3,000 balance flats. 

By Tan Chee Yuen / The Edge Property | April 3, 2017 11:00 AM MYT

Source: The Edge Property (03 Apr 2017)

FLASH ESTIMATE OF 1ST QUARTER 2017 RESALE PRICE INDEX - HDB

Published Date: 03 Apr 2017

            HDB’s flash estimate of the 1st Quarter 2017 Resale Price Index (RPI) is 133.8, a decline of 0.6% over 4th Quarter 2016 (see Annexes A1 and A2).  

2          The RPI provides information on the general price movements in the resale public housing market. The transacted prices of individual flats (by block and flat type) can be found via the e-services available on HDB’s InfoWEB.

3          The RPI for the full quarter, together with more detailed public housing data, will be released on 28 April 2017.

Upcoming Sales Launch

4          In May 2017, HDB will offer about 4,600 Build-To-Order (BTO) flats and about 3,000 balance flats.  More information on the BTO flats is available on the HDB InfoWEB.

Source: HDB

SRX: HDB resale prices up 0.3% in March; volume increases by 75.4% - SRX

RESALE prices of Housing & Development Board (HDB) flats rose 0.3 per cent in March compared to February 2017, while resale volume surged.

According to HDB resale data compiled by SRX Property, 1,910 HDB resale flats were sold last month, a 75.4 per cent increase from 1,089 transacted units in February.

Year on year, prices decreased by 0.1 per cent from March 2016, while resale volume increased by 14.1 per cent compared to 1,674 units resold in March 2016.

Compared to their respective peaks, resale prices in March declined by 11.2 per cent since the peak in April 2013, while volume was down by 47.7 per cent compared to its peak of 3,649 units in May 2010.

The price increase in March was driven by higher resale prices in both mature and non-mature estates, which rose 0.3 per cent and 0.2 per cent respectively.

The resale prices of HDB four-room, five-room and HDB executive flats also all rose - by 0.3 per cent, 0.3 per cent and 1.7 per cent respectively - while HDB three-room resale flat prices decreased by 0.7 per cent.

As featured on The Business Times

Source: SRX (06 Apr 2017)