The Straits Times | Monday, May 27, 2013

SINGAPORE – More Housing Board (HDB) flat owners are expected to sell their homes when their new Build-to-Order (BTO) flats are completed in the next three years.

This should be good news for first-time flat buyers who do not want to wait for new flats to be completed, according to property analysts who spoke with My Paper.

Even so, the housing experts noted that resale-flat prices may remain high.

A total of 5,600 HDB flat owners will be required to sell their existing flats when they get their new BTO flats next year, just over twice that of the 2,500 this year. In 2015, another 5,600 owners will have to sell their existing flats, while 3,300 will need to do so in 2016.

These figures were revealed by National Development Minister Khaw Boon Wan in Parliament on May 13.

Flat owners have to sell their current flats when they move into their new ones.

With more owners selling their existing flats when they get their new BTO flats, public-housing supply in the resale market will increase, said Ms Christine Li, head of research and consultancy at real- estate firm OrangeTee.

This would mean “more balance” in the demand and supply of resale flats, she said, adding that the cash premium paid on top of the valuation of an HDB flat “could become more manageable” in areas where owners have sold their units.

“This could benefit first-time flat buyers who prefer immediate occupation or (buying units in) mature estates, where BTO flats are still limited,” said Ms Li.

However, HDB resale-flat prices are likely to remain high, said Mr Nicholas Mak, executive director of research and consultancy at SLP International.

This is because resale-flat prices are driven in part by people who concurrently own a flat and private property, he explained.

Mr Mak was referring to a class of flat owners – private-property upgraders who keep and rent out their flats – created by the liberalisation of HDB subletting rules in 2002.

“(Doing so) doesn’t ‘recycle’ the flat,” he said, pointing out that it deprives another family of a flat while “escalating the prices of resale flats”.

Mr Khaw said in Parliament that, from 2010 till last year, 46,700 private-home buyers had an existing HDB address.

This is almost 70 per cent more than the 27,600 from 2007 to 2009, based on figures from the Urban Redevelopment Authority.

Resale-flat prices rose at a slower rate of 1.3 per cent in the first quarter of the year as compared to the previous quarter, based on reports last month.

Mr Alan Cheong, senior director of research and consultancy at Savills Singapore, said that resale-flat prices are also dependent on immigration policies.

He expects resale prices to continue to rise by 3 to 5 per cent each year in the long run, because the number of citizenships granted would create certainty among potential resale-flat buyers.

On why second-time flat owners would choose to sell their existing flat for a new BTO flat, Mr Mak said there could be a combination of factors, including moving to a more preferred location.

Ms Li added that some BTO projects, like the Pinnacle@Duxton, have “good attributes”, such as being located in mature estates and having premium finishings, which would attract second-time flat buyers.


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