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8 March 2019

RESIDENTIAL MARKET

MND unveils three new moves to help HDB buyers

New Housing Board projects will be made public six months before they go on sale instead of three, while ballot times will be halved to three weeks in a series of moves meant to improve the home-buying process.

Both changes will apply from the May sales exercise onwards.

Announcing the measures yesterday, Minister for National Development Lawrence Wong said these moves are part of a long-term plan to keep housing affordable and accessible to Singaporeans.

Mr Wong also reaffirmed his ministry's commitment to providing affordable housing options for different types of flat buyers.

To this end, he spelt out a range of measures, such as broadening the scope of a grant to help lower-income families buy bigger homes, and introducing more flexibility to use Central Provident Fund (CPF) monies to buy older flats so that elderly owners in such homes can right-size more easily.

To read more: https://www.straitstimes.com/politics/mnd-unveils-three-new-moves-t...

Adapted from: The Straits Times, 8 March 2019

Changes soon to CPF loan rules on buying older flats

Changes to the Central Provident Fund (CPF) loan rules on the purchase of older Housing Board resale flats will be announced soon for implementation in May this year, National Development Minister Lawrence Wong said yesterday.

At issue is the restriction on using CPF to buy flats with less than 60 years of lease remaining. About 90,000 of the total stock of about one million HDB flats are more than 40 years old.

To read more: https://www.straitstimes.com/business/changes-soon-to-cpf-loan-rule...

Adapted from: The Straits Times, 8 March 2019

Restrictions on use of CPF to buy older HDB flats to be relaxed by May

The government is looking into relaxing Central Provident Fund (CPF) loan rules on the purchase of older Housing and Development Board (HDB) resale flats, and will announce the changes soon for implementation in May this year.

One issue is the restriction in CPF usage for flats with less than 60 years of lease remaining, National Development Minister Lawrence Wong said in parliament on Thursday.

Some banks also take reference from these restrictions when assessing how much loan to extend. As a result, both CPF and loan quantums are reduced for the purchase of such older flats, he said.

"The CPF rule is intended to safeguard the retirement adequacy of buyers who purchase older flats, but its design has led to some unintended consequences. For example, a buyer of a 39-year-old flat can use full CPF, but just a year later, the amount of CPF will be restricted," he said.

"There's no good reason why this should be so just because the flat became a year older," said Mr Wong, adding that his ministry and the Manpower Ministry have been studying the issue.

"In fact, the focus should not be on the remaining lease of the flat. What we want to ensure is that buyers purchase flats with leases that are long enough to last them for life. If that is done, then we can relax CPF usage rules, even if the remaining lease is less than 60 years," he said.

Mr Wong had said in August last year that his ministry was looking into how to let buyers of shorter-lease flats dip deeper into CPF funds for their purchase, without compromising their retirement savings.

The move aims to address growing concerns among flat owners over the depreciating leases of their older flats and the difficulty they have in selling their flats - partly because of the limitations placed on buyers over the use of their CPF funds.

If there is more flexibility in the use of CPF funds to buy flats with shorter leases, it would help those who want to purchase flats in mature HDB estates.

As 70,000 of the total stock of about one million HDB flats are more than 40 years old, nearly 10 per cent of public housing today will be facing lease expiry in 50 years.

For the vast majority of flats, that means the leases will expire and the flats will be returned to the HDB, which will in turn have to surrender the land to the state.

Meanwhile, home buyers in Singapore will soon get more information to plan their purchases, with HDB announcing new projects six months in advance instead of three.

HDB will also shorten the waiting time for applicants to receive their ballot results by half, from six weeks to three.

Mr Wong said these moves are part of a long-term plan to keep housing affordable and accessible for Singaporeans. The changes will take effect from the May 2019 Build-to-Order (BTO) exercise.

The expanded BTO announcement schedule will allow home buyers to see upcoming projects on a longer horizon, and plan accordingly.

This means that in the May exercise, buyers will know which projects will be launched in August and November. The details that will be released will include the location, the number of units and the flat mix.

The shortened balloting time is a response to Mr Wong's challenge to HDB to minimise the waiting time for buyers to get their flats during the debate on his ministry's budget in 2018.

"For first-timer couples, applying for a BTO flat is a major decision, and one consideration is the location of the flat," said Mr Wong.

"Very often, potential buyers want to know the planned locations of future BTO sales exercises, not just the present one so they can decide whether to put in an application now or hold back and wait for a subsequent sales exercise," he added.

Mr Wong said his ministry has been careful about revealing too much information on future sales.

"There will always be unexpected changes to the building plans (for example, due to changes in market conditions or demand). But I understand why buyers would like more information to plan ahead," he said.

The number of BTO flats with shorter waiting times of between two and three years will also be doubled to 2,000 this year.

"There will be a limit to how many such flats we can offer due to factors like site availability. But we will continue to review how much more we can do and whether we can compress the timeline further."

Those who are in more urgent need of flats can opt for the Sale of Balance Flats or the Re-offer of Balance Flats, he said.

Source: https://www.businesstimes.com.sg/government-economy/singapore-budge...

Adapted from: The Business Times, 8 March 2019

Making owning a home an achievable dream for more

In the last five years, the Build-To-Order backlog has been cleared, more singles have had a chance to buy a flat, and it has become slightly easier for divorcees and their children to get a roof over their heads.

Now, the home ownership narrative for the vast majority is being expanded to include a group of people that, inadvertently or otherwise, seems to have fallen through the cracks: families in rental homes.

Amid recent discussions about income inequality and the widening social class divide, the Ministry of National Development sent a strong signal yesterday - when it announced a slew of measures for these families - that every possible effort will be made to ensure no one is left behind in this quintessentially Singaporean journey.

The measures include a team dedicated to actively spot rental families with the potential to buy an HDB flat, and extending a $15,000 grant to second-timer families in rental homes to buy three-room flats in new estates.

For many who live in larger flats or homes, these units may appear too small, or too far from the heart of town. But they provide a sense of stability families typically yearn for, are a tangible reminder that progress has not eluded them, and are a source of comfort that they have an asset and a home to make memories in.

Also, most home owners use their Central Provident Fund savings to settle most, if not all, of their monthly mortgage. This is a big relief as they also do not have to constantly worry about whether they have the cash to pay the month's rent. For rental families, who earn below $1,500 a month, every dollar counts.

But achieving home ownership is easier said than done. Only 5,000 out of 56,000 rental families have done so in the last six years.

Rising above one's disadvantaged circumstances requires a mix of factors, including social intervention, higher education and better-paying jobs.

This complex state takes time to resolve. To hasten it, the authorities are making a whole-of-government effort, as seen in four ministries pledging in a joint statement on Tuesday to mitigate income inequality and increase social mobility.

But the move that heartened me most is the interim measure to improve substantially the living environment of those living in older rental blocks.

These ageing blocks, built in the 1960s and 1970s with a long central corridor and flats on both sides, have been described by sociologists as functional but claustrophobic, which sometimes cause tension in complicated familial and neighbourly relations.

Now, the HDB is going to demolish some units to let in more light and fresh air.

It is also acknowledging the need for privacy for tenants sharing a rental flat under the Joint Singles Scheme, by installing partitions to create separate sleeping areas.

But for rental families, the message in the new measures is that the authorities have shifted their focus, from just housing the disadvantaged to working with them to make a home.

As a member of the Singapore family, their sense of belonging and social pride will strengthen as their needs that go beyond food and shelter receive as much attention as those of everyone else.

Such feelings help fortify loyalty to country.

Of course, it helps that the rental flat backlog has been cleared, with the supply now exceeding 60,000.

While expecting a higher rate of rental families progressing to home ownership is the eternal hope, the complex nature of the family situation cannot be overemphasised.

Still, setting a hard target - say, a 50 per cent rise in five years' time of last year's 1,300 families - gives us a goal to work towards.

More critically, it will help convince many more rental families that home ownership is a possibility, not a pipe dream.

As Senior Parliamentary Secretary Sun Xueling and some MPs had noted, public rental should be temporary for those who can work.

Singapore, however, is still some way off from being all-inclusive. MPs like Mr Louis Ng (Nee Soon GRC), have asked the authorities to let unwed mothers buy an HDB flat more easily while some activists say lesbian, gay, bisexual and transgender couples are entitled to subsidised homes too.

We have taken a good step forward for rental families.

Perhaps we can do more.

Source: https://www.straitstimes.com/politics/making-owning-a-home-an-achie...

Adapted from: The Straits Times, 8 March 2019

HDB flat resales down after rise in Jan

Housing Board resale transactions resumed the downtrend amid the Chinese New Year lull last month, after chalking up the first month-on-month increase in sales in January since last July's cooling measures.

Last month, 1,313 HDB resale flats changed hands, 15.8 per cent down from January, according to flash estimates from real estate portal SRX Property yesterday. Year on year, February's sales volume was up 9.9 per cent.

HDB resale prices remained unchanged from January. Compared with February last year, prices declined by 0.5 per cent and were 13.9 per cent down from the peak in April 2013.

To read more: https://www.straitstimes.com/singapore/hdb-flat-resales-down-after-...

Adapted from: The Straits Times, 8 March 2019

HDB resale transactions down in Feb, prices steady: SRX

Housing and Development Board (HDB) resale transactions resumed their downtrend in February amid the Chinese New Year lull, after January enjoyed the first month-on-month increase in sales since last July's cooling measures.

Last month, 1,313 HDB resale flats changed hands, 15.8 per cent fewer than in January, according to flash estimates from real estate portal SRX on Thursday.

Year-on-year though, last month's sales volume was 9.9 per cent higher than the 1,195 units sold in February 2018.

HDB resale prices were unchanged last month compared to January.

Compared to February last year, prices last month dipped by 0.5 per cent, and were 13.9 per cent down from their peak in April 2013.

Observing that sellers are generally taking a longer time to offload their HDB flats, Christine Sun, head of research and consultancy at OrangeTee, said the slower sales may be attributed mainly to the Chinese New Year festivities and "lingering concerns" about the depreciating leases of ageing flats.

She added that prices of HDB resale flats have generally fallen faster than private homes in recent months, which could have widened the price gap between the two property classes.

Competition may have also stiffened for sellers due to the increased supply of HDB flats reaching their five-year minimum occupation period (MOP), said Ms Sun.

SRX's data also showed no change to the premium buyers were prepared to pay over market value in February.

For last month, this amount - as measured by SRX's computer-generated overall median transaction over X-value (TOX) - stayed at negative S$1,000.

Woodlands posted the highest median TOX among HDB towns with more than 10 resale transactions last month at S$5,000, while mature estate Toa Payoh had the lowest TOX of negative S$16,000.

Buyers were less willing to pay more for bigger flats, with the median TOX for four-room and five-room flats at negative S$1,000 and negative S$5,000 respectively.

The median TOX for three-room flats was S$1,000.

Looking ahead, Ms Sun said HDB resale prices for mature estates may see marginal improvement as more than 4,000 flats may be reaching MOP in Bukit Merah, Queenstown and Ang Mo Kio. Some of these newer flats may be able to command quite attractive prices, she said.

Source: https://www.businesstimes.com.sg/real-estate/hdb-resale-transaction...

Adapted from: The Business Times, 8 March 2019

Hume MRT station expected to be open by 2025

The long-awaited Hume station on the Downtown Line will be open by 2025, Senior Minister of State for Transport Janil Puthucheary said yesterday.

While the station was built as a "shell station" with the second phase of the Downtown Line - the first phase of which opened in 2015 - the pace of developments and ridership growth in the area did not warrant its opening then, he said in the debate on his ministry's budget.

Since then, however, the Rail Corridor has been redeveloped and it was announced on Wednesday that the former Bukit Timah Fire Station is to be developed as a recreational node.

To read more: https://www.straitstimes.com/politics/hume-mrt-station-expected-to-...

Adapted from: The Straits Times, 8 March 2019

Plans to rejuvenate city centre, waterfront

Singaporeans can expect a rejuvenated city centre, with moves under way to encourage more mixed-use development in the Central Business District "so that there will be activities beyond office hours".

Giving an update on ongoing and future plans to transform the cityscape, National Development Minister Lawrence Wong said there will be a review of a scheme that has allowed eligible commercial buildings to maximise their use through bonus plot ratios.

Speaking during the parliamentary debate on his ministry's budget, he said: "We will explore new incentives to better support rejuvenation in the CBD. Specifically, we want to encourage more mixed uses in the CBD, such as residential and hotel, so that there will be activities beyond office hours."

To read more: https://www.straitstimes.com/politics/plans-to-rejuvenate-city-cent...

Adapted from: The Straits Times, 8 March 2019

At least three new freehold projects on sale

Sales for at least three freehold projects are slated to begin on either Friday or during this weekend: Boulevard 88 in a traditional prime district, One Meyer next to the upcoming Katong Park MRT station and 1953 along Tessensohn Road.

On Friday, a consortium comprising City Developments, Hong Leong Holdings and Lea Investments begins its soft launch (by appointment only) of Boulevard 88.

This is the luxury residential component of a project that will also include The Singapore EDITION Hotel and six basement levels that will include car parking facilities.

The Moshe Safdie-designed project, on a sprawling site with dual frontages along Orchard Boulevard and Cuscaden Road, is expected to be completed in 2022. The development is coming up on the site of the old Boulevard Hotel, which was shut in 2000 and demolished thereafter.

Boulevard 88 will have 154 luxury residences in two towers of 28 storeys each perched above the eight-storey hotel.

The two towers will be linked at the top with a skypark that will have an infinity pool, cabana, lounges, kitchens, club, gym and other facilities.

BT understands that indicative prices are expected to start from S$3,300-plus per square foot.

Boulevard 88 will have 50 units each of two bedroom-plus-study apartments, three-bedders, and four- bedders, in addition to four penthouses.

The two bedroom-plus-study units are all 1,313 sq ft each and indicatively, their prices begin from S$4.4 million per unit. Prices of the three-bedders (all 1,776 sq ft each) are expected to begin from S$6 million, while the four-bedders (2,756 sq ft to 2,799 sq ft) will begin from S$9.6 million. The four penthouses have sizes ranging from 5,673 sq ft to 6,049 sq ft.

Five marketing agents have been appointed to sell the project: Edmund Tie & Company, ERA, Huttons, PropNex and Savills.

Over in the Meyer Road locale, on the former Albracca site, a consortium led by Sustained Land is developing One Meyer. This will be a 19-storey project with 66 units, equally split between two-bedroom and three bedroom apartments.

The development is beside Katong Park MRT Station along the Thomson-East Coast Line.

The two-bedders are 614 sq ft each, while the three-bedders come in two sizes: 926 sq ft and 1,033 sq ft. Facilities include a swimming pool, wading pool, gym and communal jacuzzi.

"Prices are expected to range from S$2,400 psf to S$2,700 psf. Units on upper levels will have sea views," said Sustained Land executive director Douglas Ong when contacted by BT.

Sustained Land is developing the project jointly with Goodland Group, Ho Lee Group and Kwong Lee Land.

The project goes on sale on Saturday, as will Oxley Holdings' 1953 mixed development coming up at the corner of Balestier and Tessensohn roads.

The six-storey project will have 58 residential units (with an average price of about S$1,850 psf) and 14 commercial units (priced at about S$3,000 psf on average).

Residential developers on the island seem to be on a launch-as-fast as-you-can mode to secure buyers amid ballooning pipeline supply of private homes arising from land-bingeing by developers in 2017 and the first half of 2018 fuelled by the collective sales fever.

Last July's property cooling measures have unsettled market sentiment but this flurry of launches could be interpreted in two ways, argues Savills Singapore research head Alan Cheong. "Observers who are bearish will say developers are in panic mode, but I think given that developers still have some time more to go before they hit the five-year sales deadline, there is no harm in testing the market with launches now and gauging the response."

CBRE's head of research for Singapore and South-east Asia, Desmond Sim, noted that factors that will be key to developers' success at launches include strong project attributes, reasonable pricing and increasingly, the track record of the developer.

Apart from incentivising buyers with attractive pricing, another strategy being adopted by some developers is incentivising agents, by offering them higher commissions, he added.

"While the internet may provide you with a slew of information, the agent can provide you the right information, coupled with an emotional touch. The persuasiveness of a human touch is still important when it comes to making a property-buying decision."

Source: https://www.businesstimes.com.sg/real-estate/at-least-three-new-fre...

Adapted from: The Business Times, 8 March 2019

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