reporter2
04-12-13, 09:57
http://www.straitstimes.com/premium/singapore/story/smaller-bto-supply-wont-affect-resales-20131204
Smaller BTO supply 'won't affect resales'
Analysts say markets for new, resale flats serve different groups of buyers
Published on Dec 04, 2013
By Janice Heng
REDUCING the supply of Build-To-Order flats after a three-year construction boom makes sense given the reduced demand but resale prices are unlikely to be affected, say analysts.
This is because, now that pent-up BTO demand has been addressed, the two markets largely serve different groups.
"The profile of buyers going for resale flats and BTO flats is generally different," said R'ST Research director Ong Kah Seng yesterday:
Analysts were responding to remarks by National Development Minister Khaw Boon Wan, who said on Monday that the Housing Board's "massive construction programme" would start to be tapered off next year.
Mr Khaw noted that three years of BTO launches have begun to restore a balance in the supply and demand of public housing by clearing the backlog of first-time buyers, mainly young families.
Analysts such as OrangeTee head of research Christine Li agreed. "You can see that demand from first-timers is quite stabilised," she said.
BTO application rates for first-timers ranged from 0.7 to 2 times this year, down from a high of 5.3 in 2010.
Mr Khaw also pointed to falling cash-over-valuation figures in the resale market as a welcome sign of balance being restored.
The past three years of higher BTO supply meant first-time buyers could get a new flat rather than turning to the resale market.
This factor in conjunction with cooling measures like stricter home loan rules helped alleviate demand for resale units. Resale prices and cash premiums have fallen in response.
But analysts doubt the tapering will drive buyers back to the resale market.
In the first place, this tapering is in response to reduced buyer demand, noted Mr Ong. Excess demand, dating from a time of a severe shortage of affordable flats, has been satisfied.
Nor are resale sellers likely to raise their prices, since buyers' ability to afford pricey flats has been curbed by new loan rules.
If supply falls so much that it seems difficult to get a BTO unit, some demand might return to the resale market, said Mr Chris Koh, director of property consultancy Chris International, but he does not expect this to happen.
He is sticking to his forecast that resale prices will fall 5 to 10 per cent next year.
[email protected]
Smaller BTO supply 'won't affect resales'
Analysts say markets for new, resale flats serve different groups of buyers
Published on Dec 04, 2013
By Janice Heng
REDUCING the supply of Build-To-Order flats after a three-year construction boom makes sense given the reduced demand but resale prices are unlikely to be affected, say analysts.
This is because, now that pent-up BTO demand has been addressed, the two markets largely serve different groups.
"The profile of buyers going for resale flats and BTO flats is generally different," said R'ST Research director Ong Kah Seng yesterday:
Analysts were responding to remarks by National Development Minister Khaw Boon Wan, who said on Monday that the Housing Board's "massive construction programme" would start to be tapered off next year.
Mr Khaw noted that three years of BTO launches have begun to restore a balance in the supply and demand of public housing by clearing the backlog of first-time buyers, mainly young families.
Analysts such as OrangeTee head of research Christine Li agreed. "You can see that demand from first-timers is quite stabilised," she said.
BTO application rates for first-timers ranged from 0.7 to 2 times this year, down from a high of 5.3 in 2010.
Mr Khaw also pointed to falling cash-over-valuation figures in the resale market as a welcome sign of balance being restored.
The past three years of higher BTO supply meant first-time buyers could get a new flat rather than turning to the resale market.
This factor in conjunction with cooling measures like stricter home loan rules helped alleviate demand for resale units. Resale prices and cash premiums have fallen in response.
But analysts doubt the tapering will drive buyers back to the resale market.
In the first place, this tapering is in response to reduced buyer demand, noted Mr Ong. Excess demand, dating from a time of a severe shortage of affordable flats, has been satisfied.
Nor are resale sellers likely to raise their prices, since buyers' ability to afford pricey flats has been curbed by new loan rules.
If supply falls so much that it seems difficult to get a BTO unit, some demand might return to the resale market, said Mr Chris Koh, director of property consultancy Chris International, but he does not expect this to happen.
He is sticking to his forecast that resale prices will fall 5 to 10 per cent next year.
[email protected]