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09 March 2013

9th March, Saturday




Govt to drive down prices of BTO flats

Source: Business Times

Singapore will relook its public housing policies and try to bring down the prices of built-to-order (BTO) flats.

While the housing policy had enabled the vast majority of Singaporeans to own homes, it needed to be reviewed in the light of significant demographic and economic changes, said Minister for National Development Khaw Boon Wan Friday.

The primary mission of the Housing & Development Board (HDB) remained offering affordable homes. To that end, "we can now pause and see what else we can do to bring BTO (built-to-order) prices in non-mature estates to say, around four years of salary as it was before the current property cycle started," said Mr Khaw.

This, he said, will be achieved partly through cooling measures to nudge the property market down and partly by seeing if an alternative housing option can be designed.

The HDB will be ramping up flat supply; 25,000 new flats will be launched this year, up from the earlier announced 23,000 flats.


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Singles can soon buy flats from HDB

Source: The Straits Times

Singles will be allowed to buy flats directly from the Housing Board for the first time, in a change of policy that looks set to bring down the prices of resale flats.

But they will be restricted to buying only two-room flats and their income should not exceed $5,000 a month.

They also cannot be younger than 35. This is the existing age limit for singles, who can buy HDB flats of up to five rooms but only in the resale market.

The policy change was announced Friday by National Development Minister Khaw Boon Wan, who said he hoped to offer the new flats as early as July.

Every year, about 4,000 singles buy homes in the resale market, said Mr Khaw.

Now they can look to new flats, which would come in two sizes - 375 sq ft and 485 sq ft - and be built in less developed towns like Sengkang.

Property analysts estimate these may cost up to $100,000 without grants - the price of new two-room flats in Punggol last year.

But the ministry is still working out details like the amount of subsidy they would get compared to married couples and their priority in the queue, he added.


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Cap on foreign tenants in HDB blocks

Source: The Straits Times

The Government will move to cap the number of foreign tenants in each Housing Board block to prevent the growth of foreigner enclaves.

National Development Minister Khaw Boon Wan said in Parliament Friday that while the implementation details are being sorted out, the Housing Board will cap approvals for all new HDB tenancy agreements involving non-citizens, and those up for renewal.

The tenancy will be capped at 1 1/2 years with immediate effect, down from three years previously.

These changes, however, will not apply to Malaysian tenants, as they face fewer integration challenges, Mr Khaw said.


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More flats set aside for divorcees, downgraders

Source: The Straits Times

Two groups are going to find it easier to get a new Build-to-Order flat from May: those who are downgrading and divorcees applying a second time to buy a flat from the HDB.

This follows a doubling in the quota of two-room and three-room flats in non-mature estates for the second-timers, from 15 per cent to 30 per cent.

In announcing the move Friday, Minister for National Development Khaw Boon Wan said: "This will help second-timers needing to downgrade."

Of the quota, 5 percentage points will be reserved for divorcees or the widowed who have children younger than 16.

This will "almost guarantee" that they will be able to choose a two-room flat and "significantly increase" the chances of those who apply for a three-room flat, said Mr Khaw.

From this month, divorcees will also be allowed to get a flat more quickly.

They can apply for or own two separate subsidised flats three years after their divorce instead of having to wait five years.

The time bar does not apply if they are buying a new flat with a new spouse or their parents.

The ministry yesterday announced another tweak to make it easier for divorcees.

From now, if one of them wants to buy a subsidised flat during the debarment period, he or she does not need to get the ex-spouse's permission as long as the buyer has legal custody of all the children, who must be younger than 18 at the time of the divorce.


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More couples to get help with new homes

Source: The Straits Times

Married couples applying for public housing for the first time will get more help, whether they have yet to have children or are expecting their first.

This will be done by expanding two existing schemes to include more beneficiaries, said National Development Minister Khaw Boon Wan Friday.

The first will allow married couples without children to come under the Parenthood Provisional Housing Scheme, which provides rental flats at up to 40 per cent below market rate.

More details will be released next month, said the HDB.

The other change is the extension of the Parenthood Priority Scheme to couples who are expecting their first child.

Previously, only married couples with children could benefit from the scheme, with 30 per cent of units in any launch of new Build-to-Order flats reserved for them.

This is also applicable for flats that are either close to completion or already built, and half the supply would be set aside.

The scheme, which first kicked in for the flat launch in January, has been well received, with about 600 applicants, and most would get a chance to choose a flat, said Mr Khaw.


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Greater priority for those who want to age in place

Source: The Straits Times

Older Singaporeans who want to age in place, or live near their children, will get more priority under a new scheme for studio apartments.

From May's Build-to-Order (BTO) exercise onwards, half the supply will be reserved for seniors applying for a studio apartment near their current flat, or near where their children live.

This will help elderly Singaporeans "right-size", said Minister for National Development Khaw Boon Wan Friday.

The new Studio Apartment Priority Scheme replaces the Ageing-in-Place Priority Scheme and the Married Child Priority Scheme, which give more ballot chances to seniors applying for studio apartments near their current flat, or near their child's home, respectively.


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Bright spots amid dip in yields

Source: The Straits Times

City fringe rental yields have softened but landlords in areas like Balestier, Thomson and Outram are still reaping good returns.

These areas are home to many shoebox apartments, which are popular with tenants looking for a more affordable place to live in.

This has resulted in rental yields of around 5 per cent, while overall yields for city fringe homes dipped to 3.6 per cent in the fourth quarter of last year - down from 3.8 per cent at the start of that year.

The best performers were Balestier and Thomson, in the Novena planning area, with yields of 5.3 per cent in the fourth quarter, thanks to the high psf rents inked by shoebox apartments of 500 sq ft and less. The Outram and Rochor planning areas were second, with yields of 4.4 per cent, while Queenstown apartments pulled in 4.1 per cent.

Standout performers like that cannot hide the overall trend, which is a slight decline in yields.

Experts note that they have fallen despite an increase in rents because average resale prices have increased at a faster pace than rental growth.

Yields are expected to be squeezed further as price growth moderates and more homes hit the market over the next few years. The city fringe region had 10,000 unsold units as of 31 December, most of them uncompleted.


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Tanah Merah sees good demand

Source: The Straits Times

A spate of new developments in Tanah Merah has turned the area into a popular hunting ground for buyers. There have been three new projects in the past years, with developers focusing on the site surrounding the MRT station.

Tanah Merah's housing stock received a major boost in 2009 when Casa Merah, a 556-unit condominium jointly developed by NTUC Choice Homes and Wing Tai Holdings, was completed.

Optima@Tanah Merah, developed by TID, was finished last year, while Urban Vista, next to the MRT station, is expected to launch as early as next week.

And there is more to come. Keppel Land unit Sherwood Development bought a site at the corner of New Upper Changi and Bedok roads for $434.6 million last October. It is expected to build 700 units on the land.

While prices of flats there have risen, rents are rising at a slower pace, compressing yields between 3.5 per cent and 4 per cent as of the first quarter, said DWG senior manager Lee Sze Teck.

But leasing demand and rental income stability from residential properties in the area will be strong, with a growing catchment of working expatriates, students and families there.


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Resale suburban condo prices rise

Source: The Straits Times

Average resale prices for suburban condominiums exceeded $1,000 psf last month, the first time they have passed what for many buyers is a daunting level.

Prices rose 5.1 per cent to a record $1,046 psf in February compared with January, said the Singapore Real Estate Exchange (SRX) Friday.

Average condo resale prices in the city fringe were also up last month, adding 3.1 per cent from January to a record $1,272 psf.

An analyst said prices in these areas probably rose because buyers were going for smaller homes with lower total quantums, likely in response to lower borrowing limits and higher cash down payments imposed in January's cooling measures.

The continued growth in property values combined with softer rents also squeezed rental yields.

Rents fell islandwide, with the sharpest decline in the city fringe, down 1.9 per cent in February from January. Suburban home rents fell 1.6 per cent and city centre rents decreased 0.4 per cent.

Yields dipped 0.2 per cent in the city fringe and suburban regions last month from January, although they inched up 0.1 per cent in the city centre.

However, rents for shoebox units - flats up to 500 sq feet - went the other way, rising 1.8 per cent in psf terms overall.

Shoebox apartments rented for $6.17 psf per month on average in suburban areas last month, twice the $3.07 psf for larger units in the same region, according to SRX flash figures.

That was almost as high as city-fringe shoebox rentals, which were $6.34 psf per month on average. Their larger counterparts had monthly average rentals of $3.80 psf.

Rentals for city centre shoebox units were $7.40 psf per month on average, 63 per cent higher than the $4.54 psf for larger units in that area.


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