http://www.straitstimes.com/PrimeNew...ry_593760.html

Oct 22, 2010

HDB ANNUAL REPORT

A year of record sales

Resale transactions surge 38% and new flat bookings rise 34% on back of economic recovery

By Jessica Cheam, Housing Correspondent


SINGAPORE'S public housing boom saw more resale flats changing hands than at any time in the past nine years, on the back of an economic recovery in the second half of last year.

Home buyers booked 13,200 new flats in the same period - the highest number in five years.

The Housing Board's annual report for the year ended March, released yesterday, showed 39,320 HDB resale transactions - a 38 per cent jump from the previous financial year's.

The number of new flats booked was also up 34 per cent from the previous year's.

The last time figures were at such levels was nine years ago, when 41,059 resale flats changed hands for the year ended March 2002.

Industry analysts say such record numbers - due to the turnaround and the spillover effect from the private sector - will not be seen again for a while, as the Government continues to take steps to cool Singapore's red-hot housing market.

HDB's report showed that of the 13,200 new flats sold, 9,140 were for new flats under HDB's build-to-order (BTO) scheme. The rest were sold under its design, build and sell scheme and its sales of balance flats.

Mr Chris Koh, director of real estate agency Dennis Wee Group, said it was unusual for both new and resale flats to be in demand at the same time. Buyers, he said, came from largely the same pool.

'But the past year was an exception because the economy recovered and market confidence returned.'

There was also a spillover effect from the private home market, where prices climbed a hefty 38.2 per cent till June - pricing out many buyers, who then turned to the HDB resale market.

Mr Colin Tan, head of research and consultancy at property firm Chesterton Suntec International, noted that HDB prices had risen on the back of rising HDB rentals. 'People went into a buying frenzy.'

The HDB resale market has now seen nine straight quarters of record prices. Recent cooling measures by the Government that tightened financing and restricted home ownership mean next year's figures will not be as stellar, say analysts.

'Investment buying has stopped and there is a huge supply coming on the market,' said Mr Tan.

Speaking at a briefing on Wednesday, HDB chief executive Cheong Koon Hean acknowledged that demand had risen in tandem with the economic recovery, but that the HDB had 'responded quickly'.

It increased the supply of new flats last year from 6,000 to 9,000 by the year end, and doubled this year's supply from 8,000 to 16,000. It is planning to launch a record 22,000 flats next year.

'If demand tapers off, we can always scale back. That's the good thing about the BTO scheme,' Mrs Cheong said. BTO flats are built only when a certain number are booked.

Meanwhile, the number of people defaulting on loans also came down. The figure was down from 7.9per cent - or 33,700 cases in November 2008 - to 6.3per cent - or 24,500 cases up to last month.

To date, HDB has also added 3,500 more rental flats to bring the total number to 45,500. It aims to increase this number to 50,000 by 2012.

HDB's deficit dropped by $1.2billion, and stood at $907million, mainly because fewer building contracts were awarded in the first half of last year.

Still, as bookings picked up in the second half of the year, the HDB disbursed $502 million in Central Provident Fund housing grants for the year ended March, 52 per cent higher than in the year before.

Mrs Cheong said it was too soon to draw conclusions about where prices are headed. 'But we are monitoring the issue,' she said.

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