The Singapore government has announced a plan to allow owners of small flats who are 62 years or older to sell part of their flat’s lease, in excess of 30 remaining years, back to the HDB. The proceeds from the sale will go to a Central Provident Fund Life annuity plan, which gives the elderly sellers a stream of monthly payouts of $500 per month for retirement. With the remaining 30-year lease, the elderly owners will continue to stay in their homes.

About 25,000 households can sign up for the ‘lease sale’ scheme. Should the owners die prematurely; their estate will receive refund for the residual lease.

• [G.1.] Flat owners enjoying spill-over from high private home rents

As rents for private homes in many popular private condo projects reached an unrealistic height, more expatriates are settling for cheaper alternatives of HDB rental flats.

Owners of four-room HDB flats set to gain the most from the current trend. According to HDB data, average monthly rents for 4-room flats have climbed from $1,600 to $1,750 – almost 10% rise in the previous three months.

Between April and June, eight out of every 10 towns saw higher rents for four-room flats, with Jurong East experiencing jumps of up to 21%.

The priciest place to rent a four-room flat is now Bukit Merah, where the average monthly rent is $2,300. Close behind are flats in the Central area, Toa Payoh and Bishan, which command $2,000 or more.

• [G.2] Condo-style HDB flats at AMK four times oversubscribed

The recently launched Design, Build and Sell Scheme (DBSS) project Park Central @ AMK received over 2,300 applications - or four times the 578 units on offer. The average selling price for units in Park Central @ AMK is $490-$500 per square foot (psf).

This encouraging sign points to the underlying strengths in the demand for better housing in choice locations.

• [G.3] Upside for HDB resale prices still good

Prices of HDB resale flats are still rising due to a number of factors:

• the continuing demand from new families and permanent residents (PRs); and,
• the economic uncertainties and the cautious mood in the private property segment nudging prospective condo buyers back to the resale flat arena.

In 2007, there were about 78,000 new citizens and PRs who may be buying HDB flats which they may not have been eligible to buy previously. Currently, there are no negative factors to prevent these new citizens and PRs from owning instead of renting the flats as rental prices are still high due to the continued arrivals of expatriates.

In the first half of 2008, the HDB resale prices had already climbed 8.2%. It appears that the resale prices will continue its upward trend.

To prevent a running away housing inflation, HDB will supply 8,400 new BTO flats for the whole of this year. This is an increase from the 6,000 flats offered last year and just 2,400 BTO flats in 2006.

• [G.4] The overall performance of HDB resale flats in August 2008

The overall HDB resale transactions in August dropped to 2,186 from the previous month’s total transactions of 2,456. This could be due to the more subdued activities during the traditional Hungry Ghost Month on the Chinese lunar calendar and the generally higher asking prices by flat owners.

Table [8] – Resale HDB flat Transactions in July 2008

	3-room	4-room	5-room	E-Flats	Total for Month of August 2008
Ang Mo Kio	89	27	14	1	131
Bedok	65	47	15	8	135
Bishan	4	25	7	7	43
Bt Batok	41	39	14	7	101
Bt Merah	41	27	18	0	86
Bt Panjang	7	34	28	10	79
Bt Timah	0	1	1	3	5
Central Area	17	2	0	0	19
Choa Chu Kang	5	48	31	12	96
Clementi	40	14	5	6	65
Geylang/Aljunied	31	12	3	2	48
Hougang	23	64	33	13	133
Jurong East	21	17	17	4	59
Jurong West	25	51	55	18	149
Kallang Whampoa	32	17	14	0	63
Marine Parade	7	5	3	0	15
Pasir Ris	0	26	26	15	67
Punggol	0	17	41	6	64
Queenstown	47	10	6	0	63
Sembawang	0	18	32	8	58
Sengkang	0	46	57	9	112
Serangoon	11	8	13	6	38
Tampines	39	56	42	21	158
Toa Payoh	37	19	11	1	68
Woodlands	21	84	73	20	198
Yishun	50	55	18	10	133
Total	653	769	577	187	2186

 

• [G.5] Case study on Resale Price Trend

The sample group used in the Price Trend survey made up of the TOP 10 most populous public housing estates which happen to be the TOP best selling housing estates in Singapore.

Table [9] – comparison of resale prices of 3-room resale flats by districts

HDB Estates	Comparison of 3-room Resale flat Prices between July and August
	Median ($,000)		Lowest ($,000)		Highest ($,000)
	July	August	July	August	July	August
[1] Ang Mo Kio	$230	ü$235	$150	$188	$308	$354
[2] Bedok	$215	ü$216	$175	$190	$286	$277
[3] Bishan	$278	$278	$158	$190	$290	$290
[4] Bt Batok	$212	ü$217	$155	$178	$252	$255
[5] Hougang	$210	ü$218	$170	$185	$256	$253
[6] Jurong West	$195	*$188	$164	$143	$260	$266
[7] Queenstown	$240	ü$260	$182	$180	$340	$495
[8] Tampines	$245	$245	$155	$178	$292	$295
[9] Woodlands	$178	ü$190	$156	$155	$232.5	$246
[10] Yishun	$194	ü$202	$165	$140	$260	$246

[(] means the median price is higher  [*] means lower or same median prices

Table [10] – comparison of resale prices of 4-room resale flats by districts

HDB Estates	Comparison of 4-room Resale flat Prices between July and August
	Median ($,000)		Lowest ($,000)		Highest ($,000)
	July	August	July	August	July	August
[1] Ang Mo Kio	$322	($330	$283	$270	$430	$513
[2] Bedok	$301	*$300	$205	$238	$412	$420
[3] Bishan	$403	*$382	$305	$303	$495	$430
[4] Bt Batok	$310	ü$356	$230	$240	$468	$475
[5] Hougang	$298	*$293	$205	$218	$420	$350
[6] Jurong West	$282	*$280	$215	$191	$355	$358
[7] Queenstown	$458	($460	$335	$315	$606.5	$505
[8] Tampines	$325	*$316	$225	$266	$415	$418
[9] Woodlands	$266	($275	$176	$203	$333	$330
[10] Yishun	$238	($248	$175	$168	$338	$337

Table [11] – comparison of resale prices of 5-room resale flats by districts

HDB Estates	Comparison of 5-room Resale flat Prices between July and August
	Median ($,000)		Lowest ($,000)		Highest ($,000)
	July	August	July	August	July	August
[1] Ang Mo Kio	$440	($493	$405	$364	$645	$590
[2] Bedok	$416	($435	$293	$300	$545	$482
[3] Bishan	$510	($545	$456	$445	$630	$560
[4] Bt Batok	$448.888	($450	$323	$270	$568	$490
[5] Hougang	$382	($389	$280	$285	$460	$468
[6] Jurong West	$348	($355	$217	$220	$404	$425
[7] Queenstown	$638	*$618	$590	$533	$695	$689.8
[8] Tampines	$392	*$392	$295	$335	$550	$502
[9] Woodlands	$327	($328.5	$263	$277	$378	$375
[10] Yishun	$327	($340	$268	$300	$430	$394

Table [12] – comparison of resale prices of Executive resale flats by districts

Selected HDB Estates	Comparison of Executive Resale flat Prices between July and August
	Median ($,000)		Lowest ($,000)		Highest ($,000)
	July	August	July	August	July	August
[1] Ang Mo Kio	$588.88	*$570	$570	$570	$595	$570
[2] Bedok	$460	($470	$400	$430	$480	$562
[3] Bishan	$580	($590	$510	$545	$665.8	$645
[4] Bt Batok	$460	*$450	$400	$383	$620	$560
[5] Hougang	$478	*$446	$390	$385	$575	$650
[6] Jurong West	$393	ü$408	$335	$338	$469	$493.5
[7] Queenstown	$800	-	$800	-	$820	-
[8] Tampines	$486	ü$490	$428.288	$408	$615	$618
[9] Woodlands	$410	*$408	$382	$340	$458	$500
[10] Yishun	$373	ü$388	$335	$349	$515	$500

• [G5.1] The Findings of the Case Study

The case study has yielded the following observations:

(a) 3-Room Resale Flats

• Smaller flats are definitely enjoying a very healthy up-swing in resale activities and prices. The total 3-room flat resale transactions in August 2008 were 10 better than the 652 transactions in July 2008. Obviously, it is due to more permanent residents (PRs) committing to ‘buying decisions’, rather than just renting the flats.
  
  
• Seven (07) out of the 10 survey areas experienced price increases in 3-room flats; and the median prices of two (02) survey areas had the same median prices as the previous month. That means, only one (01) survey area experienced a dip in median prices for the 3-room flats there.

(b) 4-Room Resale Flats

• The 4-room resale transactions drop more than 15% in August from the 910 transactions in July to only 769 deals in August.
  
  
• Five (05) out of the 10 survey areas experienced higher median prices. Two (02) out of the five survey areas which did not experience any price rise had marginally lower median prices, such as Bedok’s median price for 4-room resale flats was $301,000 in July and $300,000 in August; while Jurong West had a median price of $282,000 in July and $280,000 in August.

(c) 5-Room Resale Flats

• Though the 5-room resale transactions drop 15% in August from the 680 transactions in July to only 577 transactions in August, resale prices remain stable.
  
  
• Eight (08) out of the 10 survey areas experienced higher median prices. Of the two (02) survey areas which did not experience higher median prices, Tampinese estate has the same median price; while Queenstown saw a drastic drop in resale prices in August, probably due to the already inflated resale prices there.

(d) Executive Flats

• The executive flat resale transactions drop around 12% in August from the 214 transactions in July to only 187 transactions in August.
  
  
  
  1. Resale prices remain stable with half the survey areas experiencing marginally higher resale prices and the other half marginally lower resale prices. This could be due to the fact that resale prices for E-flats had increased by a bigger quantum in the last few months.

Taken together, the case study ascertains that the resale prices of HDB resale flats are ‘steadily climbing and they fit a description of an up-swing market’. Though the volume of resale transactions had dropped, the resale prices are generally rising.

^ Back to top