HDB launches 1,010 BTO flats in Punggol

[Musicwhiz]

Business Times - 23 Dec 2010

HDB launches 1,010 BTO flats in Punggol

By UMA SHANKARI

THE Housing & Development Board (HDB) yesterday launched another 1,010 new flats for sale in its latest build-to-order (BTO) project, Punggol Topaz.

Including this launch, HDB has now offered a total of 17,713 new flats for sale under its BTO and sale of balance flat exercises in 2010, it said.

And the agency will continue to roll out new supply at a steady rate next year. It plans to launch about 5,000 new BTO flats in the first quarter of 2011, including 1,700 flats in Bukit Batok and Yishun in January.

For the whole of 2011, HDB is prepared to launch up to 22,000 new BTO flats if demand is sustained, it said.

Punggol Topaz, located along Punggol Way and Punggol Field, comprises 184 three-room, 542 four-room and 284 five-room standard flats. Some 95 per cent of the flat supply will be set aside for first-timer households.

Selling prices range from $166,000 to $207,000 for a three-room flat; $267,000 to $329,000 for a four-room flat; and $335,000 to $406,000 for a five-room flat.

In line with HDB's plans to develop Punggol as an eco-town, Punggol Topaz is designed with eco-friendly features to receive Green Mark certification.

PropNex expects the attractive pricing of the flats to be the biggest pull factor for potential applicants.

Based on transactions handled by the property firm in November 2010, the prices for four-room and five-room flats in Punggol Topaz are 25 per cent and 19 per cent cheaper than prevailing resale prices.

'Despite the slight drop in median resale prices in Punggol since 3Q10, this still translates to a hefty price difference and greater affordability for the BTO flats in Punggol Topaz,' said PropNex corporate communications manager Adam Tan.

He expects strong demand for the new flats due to the current popularity of Punggol - even though the number of new flats introduced by HDB this year is at a high of almost 18,000.

[yeokiwi]

This Hazel can write very well and sensible..hehe..
Quite a rare gem among members of opposition parties..haha

Affordability of HDB flats – a response to Minister of National Development
Posted on November 14, 2010 by votingrp

By Hazel Poa

Two measures of affordability was offered by Minister Mah in his article “Are HDB flats affordable?” which appeared in Today Online on 12 Nov 2010. The first was the housing price-to-income ratio (or HPI), which compares median house price to annual household income, and the second was the debt-service-ratio (DSR), which looks at the proportion of the monthly income used to pay mortgages.

Let us first consider the HPI. From 1990 to 2009, median household income increased from $2,296 to $4,850[1] – an increase of 111%. Over the same period, resale flat prices increased by 342%[2]. The affordability of HDB flats has certainly deteriorated very significantly over the past 19 years. It now takes a median income household more than double the time to pay for the flat.

Next, we consider the suitability of the debt-service-ratio (DSR) as a measure of affordability for national planning purposes. There are several shortcomings, the most serious being a pre-qualified sample – the DSR is calculated based on existing home owners. These are people who can afford to buy the flat. Those who cannot afford to buy a HDB flat would not have bought one and hence would not be captured by the DSR. The loan application process would also have weeded out those whose DSR would exceed the “30-35 per cent international benchmark for affordable expenditure on housing”. Under such circumstances, it would be quite difficult for an examination of the DSR to turn out with an “unaffordable” rating, no matter what the price level. For example, if good class bungalow owners use only 15% of their income to service their mortgages, can we conclude that good class bungalows are very affordable?

The DSR is a reasonable measure to assess if a particular person/family can afford to buy a particular property, but to use that as a gauge of affordability for the general population leaves much to be desired.

While it is true that increasing subsidies for HDB flats require some reallocation of resources, it is interesting to note that the first 3 options that occurred to the Minister for National Development are: (1) cut education budget; (2) cut healthcare budget; and (3) increase taxes. The Reform Party is happy to offer some other options for consideration: (1) cut defence budget; (2) reduce the payments made by HDB to SLA for the purchase of land to build HDB flats – to the best of our knowledge, these payments go eventually into the reserves which is not used to fund any public sector services or projects; and (3) cut ministerial salaries.

Apart from increasing subsidies, prices of HDB flats can be managed by
(1) a better management of the supply:
• Adjusting the supply based on factors like number of marriages and immigration
• Setting an acceptable band for resale prices relative to median income (for example,
50 times of median income plus/minus 20%), then increase supply if prices go
above the band and decrease supply if prices go below. This is similar to the way
MAS manages the Singapore dollar exchange rates.
• Cutting down the waiting time for new flats by building in advance, not Built-To-
Order
• Manage any temporary excess/unsold new flats by renting them out

(2) Mortgage regulations that takes into account specific factors in Singapore like the
existence/non-existence of a pensions system or social safety nets. This is to pre-
empt situations like retirees with no/little savings despite our CPF system because all
their CPF savings went to pay for their flat.

In addition to a prudent but active management of HDB flat prices, affordability can also be enhanced by targeting specific trouble spots like upfront payment for first-time home buyers. This can be done by adjusting the allocation of subsidies.

If elected to government, the Reform Party, being keenly aware of the limitations of relying solely on a few quantifiable measurements, will strengthen our decision making process by listening more intently to the voices of the people, and qualifying our national policies accordingly.

[flinger]

Her solutions seem very viable, was there a rebuttal from MBT?

We need people like Hazel to question the authority, so that they don;t just throw any system to the hardworking citizens of this country.

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This is reply from the ministry.

Letter from Lim Yuin Chien Press Secretary to the Minister for National Development


I REFER to the letter "It's a question of supply" (Nov 24), where the Reform Party's Hazel Poa questioned the use of two internationally accepted measures - the housing-price-to-income ratio (HPI) and debt-service-ratio (DSR) - to assess housing affordability.

First, the Reform Party rejects the two measures because they contradict the party's assertion that flats are out of reach for most Singaporeans. What other objective and widely used measures of affordability does the Reform Party propose?

Second, Ms Poa questioned the affordability of HDB flats. The primary basis to assess affordability should be new and not resale flats.

I would think it would be combination of both as a lot of new buyers buy resale flats as well due to the many personal circumstances. It seems that the flats are only affordable if you follow strictly to specify types of housing and certain locations based on the ministry comments.

HDB offers new flats every year, priced at a discount to comparable resale flat prices. HDB is building more new flats than before, in a variety of sizes and locations to meet demand from households with different budgets.

I disagree with the fact the they are comparable to resale flats. Comparing my parents flats (1976) my sibling flat ( 2003) and the now new flats all same size 5 room, there is a major big difference in size, location , cost, etc... they got bigger sizes , lower costs, better amenities, compared to the current ones which are small size, higher costs by a lot , lack the same amenities .

Just to add on these flats have been upgraded further to keep up with times and are better than the new flats.

So I am not sure they are comparable.

As for resale flat prices, Ms Poa argued that they had increased faster than incomes from 1990 to 2009. But why 1990? There was a step jump in resale flat prices in 1993, when HDB began offering loans based on market valuation (corrected at 3PM, Dec 3). If we consider other reasonably long time periods after 1993, like 1995 to 2009 or 2000 to 2009, housing prices have in fact moved in step with incomes. Ms Poa has also ignored the CPF Housing Grant and Additional Housing Grant, which make resale flats more affordable to first-timers, especially applicants with lower incomes.

The Reform Party has suggested controlling resale flat prices. An HDB flat is a home and asset belonging to citizens, who hope that its value will appreciate with the country's growth. As such, resale prices move based on market forces, while the Government keeps watch for excessive exuberance. Resale prices have appreciated over the years because Singapore has prospered, infrastructure has been improved, and flats have been regularly upgraded along with their surroundings. If instead the economy were to decline, jobs were lost, or housing estates allowed to run down, flat prices would surely fall. The Reform Party's formula to control resale flat prices would make them worth far less than their value today. How would this benefit the many hundreds of thousands of existing homeowners?

Third, Ms Poa criticised the DSR because it only measures affordability for people who buy flats. But in Singapore today, eight in 10 Singaporeans have bought and live in HDB flats, with over 90 per cent owning their flats. On average, 15,000 first-timers buy HDB flats and join the ranks of homeowners every year. This high ownership rate is the best proof that HDB flats are affordable.

This is most ridiculous statement to me. Just because 90% stay in HDB, does not make HDB affordable. The reason they do that is because, that is the cheapest that available in the market, but that does not mean it is affordable. The write is confused on the term affordability based on the statement.


Today, young couples in Singapore can reasonably aspire to buy a new BTO flat after working for about two years. No other major city or country does this for its young people.

The writer is correct in that, young couples can aspire to buy a BTO flat, but just not afford it.