WILL RAISING OF HDB INCOME CEILINGS TO AFFECT HOME PRICES?

WILL RAISING OF HDB INCOME CEILINGS TO AFFECT HOME PRICES?

Part 2
http://propertybuyer.com.sg/articles/singapore-property-investor-buyer/will-raising-of-hdb-income-ceilings-affect-home-prices/

Executive Condominium Supply launched and in the pipeline

Executive Condominium is a class of condominiums that are restricted by HDB’s rules on minimum occupation for 5 years and will only fully become a private estate after 10 years. These condominiums tend to be pricey on a relative scale compared to other condominiums which does not have any restrictions. Most newly wedded couples will most likely not be able to afford these type of housing looking at median incomes.

[caption id="attachment_373" align="alignnone" width="701" caption="HDB Executive Condominium launched - adding to supply"][/caption]






[caption id="attachment_375" align="alignnone" width="548" caption="Singapore HDB confirms sites for EC"][/caption]

http://www.hdb.gov.sg/fi10/fi10321p.nsf/w/BuyingNewFlatFlatsonOfferEC?




http://www.hdb.gov.sg/fi10/fi10321p.nsf/w/BuyingNewFlatFlatsonOfferEC?OpenDocument

http://www.facebook.com/pages/PropertyBuyercomsg/101354546624904

Continue to Part 3 - Raising of Income Ceiling to affect HDB home prices

With HDB new raised income ceiling affect home prices?

With HDB new raised income ceiling affect home prices?
with permission from www.PropertyBuyer.com.sg

Part – One A

“The ceiling will go up from the current $8,000 to $10,000 for HDB’s build-to-order (BTO) flats, and from $10,000 to $12,000 for executive condominiums, Prime Minister Lee Hsien Loong announced in his National Day Rally speech last night.”

“Before the change, a couple’s combined income had to be below $8,000 a month for them to qualify to buy a BTO flat from the HDB, which is typically 20 to 30 per cent cheaper than a resale flat.” (PMO)

(PMO, pmo.gov.sg/content/pmosite/mediacentre/inthenews/primeminister/2011/August/HDB_raises_income_ceiling_to_10000.html)

The income ceiling for New HDB flats will be raised to: -
Income Ceiling Type of Flat

$10,000
Studio Apartment 3-room (mature towns/estates),
3-room (Premium) 4-room or 5-room flat
$5,000
3-room Standard (non-mature towns/estates)
$2,000
2-room
(HDB, http://services2.hdb.gov.sg/webapp/BP13EligCheck/BP13SHome?strSystem=CHECK)

HDB Property Supply In The PIPELINE

As we discussed in our last article, despite all the HDB launches in 2010 and the “NOISE”, if we look at the statistics these announced supply are hardly enough to meet even Singapore’s local domestic needs, not to mention providing for the massive influx of foreigners and new Permanent Residents (PR). Ministry of National development got their numbers quite wrong. In that, they have under-supplied HDB flats to the tune of even up to 100,000 units (based on our estimates)

The fact that there is not a long queue at BTO registration (As claimed by some minister as indication of people not needing a home) itself does not mean that there is no latent demand, from the between 22,000 to 25,000 marriages each year. (http://propertybuyer.com.sg/articles/singapore-property-investor-buyer/why-singapore-property-prices-go-crazy/) This probably reflects the various complicated paper work and bureaucratic costs imposed as well as the people not being able to afford the supply.

HDB Property Supply In The PIPELINE

As we discussed in our last article, despite all the HDB launches in 2010 and the “NOISE”, if we look at the statistics these announced supply are hardly enough to meet even Singapore’s local domestic needs, not to mention providing for the massive influx of foreigners and new Permanent Residents (PR). Ministry of National development got their numbers quite wrong. In that, they have under-supplied HDB flats to the tune of even up to 100,000 units (based on our estimates)

The fact that there is not a long queue at BTO registration (As claimed by some minister as indication of people not needing a home) itself does not mean that there is no latent demand as there are between 22,000 to 25,000 marriages each year. (http://propertybuyer.com.sg/articles/singapore-property-investor-buyer/why-singapore-property-prices-go-crazy/) This probably reflects the various complicated paper work and bureaucratic costs imposed as well as the people not being able to afford the supply of such HDB BTO flats.

Supply From Balance HDB Flats

Supply of HDB flats are from current balanced stocks are also in short supply.

There are not much supply from Balance flats as well. “The flats offered in the Sale of Balance Flats exercise are mostly under construction or near completion. Because of strong interest for such flats, the chances of getting a flat in the Sale of Balance Flats exercise are slim. Property Buyers who are not invited to select a flat can consider applying for a new flat under the BTO system, which is where HDB’s main supply for flats comes from.”

(http://www.hdb.gov.sg/fi10/fi10321p.nsf/w/BuyingNewFlatSBF?OpenDocument)

There are hardly any supply of balance units, so the only way to go will be to buy from the HDB Build-to-order (BTO) market.

(http://www.hdb.gov.sg/fi10/fi10321p.nsf/w/BuyingNewFlatModeBTO?OpenDocument)

That means that the current shortage of HDB supply will stay at least until some of the proposed Build-to-order flats are completed. And more of such BTO sites will need to be launched, sold and completed. And the time frame for that will be 2 to 4 years considering that it takes on average 2 years to complete a HDB building project.

HDB Property Supply From BTO Launches

Let’s take a look at the supply of HDB flats from Build-to-order to be launched. There are only 5,500 units of HDB flats (Remember, we estimate that there is a demand of 22,000 to 25,000 of housing needs due to household formation, i.e. marriages)