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Thread: Strong demand cuts HDB's stock of unsold units

  1. #1
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    Default Strong demand cuts HDB's stock of unsold units,00.html?

    Published September 18, 2008

    Strong demand cuts HDB's stock of unsold units

    Bookings for new flats jump 49% to 12,580 in financial year ended March


    THE strong property market in the Housing and Development Board's (HDB) last financial year whittled down its stock of unsold flats. The board now holds about 1,500 completed units, compared with 3,500 last year.

    Reflecting the boom, bookings for new flats rose 49 per cent year on year to 12,580 in the financial year ended March 31.

    'There has been an increase in demand for new flats,' HDB chief executive Tay Kim Poh said at a press briefing on the board's annual report. 'We have been ramping up the building programme.'

    The growing need for public housing prompted HDB to offer 8,400 new Build-To-Order (BTO) flats this year - 40 per cent higher than the 6,000 last year and more than three times the 2,400 in 2006.

    Of this year's planned supply, about 5,000 new flats have already been launched, leaving more than 3,000 for the remaining months of 2008.

    More flats from the BTO pipeline will be situated at Punggol and Sengkang. About 2,500 units are in Punggol, as part of HDB's plan to build up a critical mass to support a thriving town centre. The other new flats will be spread across various towns including Yishun, Woodlands and Bukit Panjang.

    HDB has not decided on the supply of new BTO flats for 2009.

    'We'll monitor demand,' said Mr Tay. 'When necessary, we'll make adjustments to our building programme to make sure our supply matches demand.'

    ERA Asia-Pacific's assistant vice-president Eugene Lim said: 'So far, take-up for new BTO flats has been pretty good.'

    Demand comes largely from first-time buyers, he said. But it can take up to three years for such flats to be ready, so some buyers turn instead to existing units in the resale market.

    PropNex chief executive Mohamed Ismail expects demand for resale housing to remain strong, and reckons the Resale Price Index may grow another 5 per cent in H2 2008. The HDB market should suffer little or no effect from the US financial crisis, he said.

    According to HDB's Mr Tay, resale flat demand has been driven by various market segments, including permanent residents and first-time and second-time home buyers. No details have been released on the profiles of resale flat buyers.

    Beyond new and resale flats, demand for rental flats has also grown, prompting HDB to build another 2,000 units this year.

    It plans to increase its stock of rental flats from 42,000 now to about 50,000 in the next few years and is reviewing eligibility rules to ensure these units go to people in genuine need.

    HDB completed 6,247 flats last financial year, more than three times the number the year before. HDB also had 18,073 flats under construction, 27 per cent more than in the previous year.

    Against a backdrop of rising construction costs, Mr Tay reaffirmed HDB's commitment to keep flats affordable. 'We are monitoring the situation closely,' he said.

    According to HDB, a new four-room flat can cost about $300,000 to develop today, taking into account land, building and other costs. This is higher than the subsidised price of a four-room flat sold by HDB at $200,000 to $260,000.

    HDB's greatest challenge is to continue to ensure that people in the mass consumer segment have affordable roofs over their heads, said PropNex's Mr Ismail. 'This may mean having to review certain policies, such as the income ceiling for HDB flat applicants, and perhaps even abolishing the resale levy.'

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    Default 3,000 more HDB flats

    Sep 18, 2008

    3,000 more HDB flats

    Govt to release more units for sale by year's end as demand for homes doubles

    By Fiona Chan, Property Reporter

    THE Government will release 3,000 more HDB flats for sale by the end of the year, amid a doubling of demand for flats by home buyers.

    'Demand for new flats from young couples has definitely gone up since 2006,' Mr Tay Kim Poh, the HDB's chief executive, told reporters at the release of the board's annual report on Tuesday.

    Flat buyers bought 11,991 new flats in the year ended March 31, more than double the 5,712 recorded the year before.

    To meet demand, the Housing Board has already released over 5,000 flats for sale so far this year, out of a planned 8.400 for the whole year. This is 40 per cent more than last year's 6,000, which was already higher than the year before. Next year, 'should the demand remain strong', the HDB 'will release just as many' flats, Mr Tay said.

    For now, though, 'unless our population grows very fast, there is no need to build at the same level as the 1980s', he added.

    The HDB's unsold stock has dwindled from about 2,000 flats last year to some 1,500 now. Hopeful buyers have complained of difficulties and long waits in trying to secure a home.

    'Young couples looking for a flat should not come to us for a new flat. We don't have a ready supply,' Mr Tay said.

    First-time buyers who are not particular about location, however, usually bag a flat on their first or second try, he said.

    He also stressed that while the board is 'concerned' about rising construction costs, HDB flats remain 'very affordable'. At this point, flat buyers are using about 20 per cent of their incomes to service their loans, and most do not have to use all of their Central Provident Fund money, he said.

    'When we price our flats, we don't link it to development costs, but to market prices. If market prices stabilise, like they are appearing to do now, our flat prices will also be stable.'

    Higher construction expenses, which by some estimates have risen by 20 per cent to 30 per cent in the last year, have hit the HDB less severely than some private developers. The board buys materials in bulk to supply to its contractors, mitigating the increase in costs, said Mr Sng Cheng Keh, its director of development and procurement.

    For this year, the HDB's focus is to meet the 'rising aspirations' of flat buyers and dwellers, said Mr Tay.

    [email protected]

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