‘Sellers’ market’ has returned to public housing sector

[moneyspinner]

‘Sellers’ market’ has returned to public housing sectorhttp://www2.nationproperty.com.sg/npp2/images/spacer.gif
14 June

The ripple effect of the property boom in the private property segment has caused prices of bigger HDB flats to rise.
Reportedly, the recent spate of private estate collective sales has created many cash-rich individuals who are ‘down-grading’ to larger resale HDB flats. With the windfall from their earlier collective sales, they could well afford to pay top dollar for big flats in good location.
Meanwhile, the soaring of private apartment rents has also stoked rents of HDB units. Experts have put the rent hike of HDB flats to as high as 35% compared to last year. With rental yield improving, fewer flat owners are putting their flats up for sale. This has caused more tenants to want to own a flat more urgently. And such severe constraint in the demand and supply situation is certainly pushing prices further up.




Bigger flats tend to benefit more from the current situation because of the higher rent that they command in today’s market. Many executive flats are now selling for about $20,000 above their value. Just last year, an ordinary E-flat, as they are called, would have to settle for just the market valuation prices.
When a flat is bought at a cash premium above its market valuation price, the buyer cannot use his Central Provident Fund savings or a home loan to pay for the difference. The cash premium has to be settled with upfront cash within ten days of the first HDB appointment.
Prices of resale HDB flats may have inched up only 1.3% in the first quarter as compared to the 4.6% achieved by private properties, the acute shortage of private rental properties will definitely improve things in the HDB resale arena. It used to be that four people would respond to each HDB property advertised. Currently, more than 10 people would respond to the same advertisement.
However, the basic fundamental of the resale market remains the same. It all boils down to the flats’ location. Right now, the boom is felt for flats closest to the city centre - like those near Tiong Bahru, Redhill and Queenstown MRT stations. Those flats in outlaying areas and newer towns such as Punggol or Sengkang will continue to face selling pressure because of the availability of unsold new HDB flats.

Source: Nationproperty website

[moneyspinner]

June 14, 2007http://www.straitstimes.com/STI/STIMEDIA/common/storyTools.gif HDB flat in central S'pore fetches record price

FLUSH with cash from an enbloc sale, a one-time private property owner bought a five-room Housing Board flat for $675,000 this month, setting what is believed to be a record price.
The flat, a 16-storey unit in Jalan Membina, is barely five years old and minutes from Orchard Road. It was sold in a day, without even being valued as the buyer was paying in cash.
Flats are typically valued before a sale as home loans are pegged to them.
The price is believed to have surpassed that achieved during the 1990s property boom. While it is not clear if it can be achieved again, property agent say the deal reflects huge demand for bigger flats in centrally located redeveloped precincts like Tiong Bahru, Queenstown and Toa Payoh.
Many of them are minutes from an MRT station and Orchard Road, command good views because of their high floors, and are far newer than their counterparts in these mature estates.
Private property owners dislodged by recent enbloc sales of see such such flats as good - and relatively cheaper - replacements for condominium units.
They are fast edging out other buyers when these flats surface on the market after five years - the minimum waiting period before a new flat can be resold.
These units can fetch anything from $50,000 onwards in cash above their value.
In the case of the Jalan Membina flat, it is estimated to be worth $550,000 - meaning its buyer paid about $125,000 above its value. Its owners had wanted to sell their flat as it was getting too cramped for the family of eight, said their agent, Mr Joseph Tan from Propnex.
The general view among the 10 property agents polled was that this was a one-off price. Read the full story in Friday's edition of The Straits Times.