HDB prices

[hindsight]

Actually gahmen is trying to push the resale price higher. You can read from the news last year.

16,900 new flats expected in 2015

On average 30,000 couple get married every year and 80% of the market are hdb. If they reduce the BTO to 16,900.. those who can't get BTO will need to buy from resale.

Its not an attempt to push resale HDB prices higher, its more of a move to stabilise prices after flooding the market with a lot of supply in the last 3 years.

http://www.todayonline.com/business/property/enough-home-supply-2030

If there are only 26k marriages a year then property prices are going down hard because supply will outstrip demand by more than 100% in the next 3 years, this oversupply will take about 20 years to clear if the current BTO launch numbers and marriages remain roughly the same (16.9k/26k).

 

[antonpoh]

Its not an attempt to push resale HDB prices higher, its more of a move to stabilise prices after flooding the market with a lot of supply in the last 3 years.

http://www.todayonline.com/business/property/enough-home-supply-2030

If there are only 26k marriages a year then property prices are going down hard because supply will outstrip demand by more than 100% in the next 3 years, this oversupply will take about 20 years to clear if the current BTO launch numbers and marriages remain roughly the same (16.9k/26k).

How can there be oversupply, if there are 26k new families and hdb is only building 16.9k?

 

[hindsight]

How can there be oversupply, if there are 26k new families and hdb is only building 16.9k?

My oh my... did you even read my post?

The oversupply is from previous years' launches, about 150k new housing units will be completed between 2015-2017, if we assume that all newly weds end up getting a flat then thats 26k x 3.

150k - 78k = glut. Add the current 25k unsold units = 100k glut.

 

[lzydata]

Number of marriages: 26,254 for year 2013. Not quite 30k but close.

Number of Marriages and Divorces
http://www.singstat.gov.sg/statistics/visualising-data/charts/number-of-marriages-and-divorces

Update: Oops I see antonpoh has already posted this.

 

[NewInvestor]

Even at $1500, the ratio is still 18 times...

I think we can all agree that HDB prices rises faster than common folks salary.

Hey mate, I didn't realise you are so young. Only 30. It is a great age to be to make some money from property investments. What you say above is very true and has happened in all successful cities. Since you know that your statement is true, you should know what to do lah.

 

[Izumi8]

My oh my... did you even read my post?

The oversupply is from previous years' launches, about 150k new housing units will be completed between 2015-2017, if we assume that all newly weds end up getting a flat then thats 26k x 3.

150k - 78k = glut. Add the current 25k unsold units = 100k glut.

Singapore housing supply will never be "Oversupply" if the prices can still go up under free market. Now the Gov has imposed ridiculous ABSD or watever TDSR to intervene the demand side, artificially reduce the buying power to lower HDB resale prices so that they can say, "See, HDB is becoming more affordable as your income increased"

You can try remove ALL (7 rounds) cooling measures to see if HDB price can still go down or not? The answer is many people want to buy but due to gov policy they can only wait. This ensure that after election, HDB can resume its uptrend due to limited supply. They should build more HDB (at least equal to last year marriage couple numbers), REMOVE all those stupid ABSD taxes, and let market decide the price without any intervention.

In this case, to build 16k is definitely insufficient for future demand. Why not build 30K HDBevery year and remove all cooling measures? You see what is the purpose of those additional taxes while keeping supply low?

Imagine they oversupply the HDB housings with 30K units every year, you walk in to HDB, you can even move in to a BTO immediately without waiting, you can get 30 year loan at 10% downpayment easily without those TDSR. The rich of course can buy a few units at good price as they pleased as the supply is huge. Resale transaction is active with many buyers and sellers, no penalty to flip, easy to sell and buy. No taxes and so more people find it cheap to buy.

So, what is the purpose of controlling the market with heavy taxes and limited supply?

 

[antonpoh]

My oh my... did you even read my post?

The oversupply is from previous years' launches, about 150k new housing units will be completed between 2015-2017, if we assume that all newly weds end up getting a flat then thats 26k x 3.

150k - 78k = glut. Add the current 25k unsold units = 100k glut.

Cause you don't know that hdb actually stop building new flats for 5yrs during mah bow tan that time. He is the reason why we have high property price. If i rem correctly that 5yrs they didn't even release any land sale for private condo.

Anyway even if hdb is able to launch 26k per year, they still need 3-4yrs to build it.

 

[hindsight]

Singapore housing supply will never be "Oversupply" if the prices can still go up under free market. Now the Gov has imposed ridiculous ABSD or watever TDSR to intervene the demand side, artificially reduce the buying power to lower HDB resale prices so that they can say, "See, HDB is becoming more affordable as your income increased"

You can try remove ALL (7 rounds) cooling measures to see if HDB price can still go down or not? The answer is many people want to buy but due to gov policy they can only wait. This ensure that after election, HDB can resume its uptrend due to limited supply. They should build more HDB (at least equal to last year marriage couple numbers), REMOVE all those stupid ABSD taxes, and let market decide the price without any intervention.

In this case, to build 16k is definitely insufficient for future demand. Why not build 30K HDBevery year and remove all cooling measures? You see what is the purpose of those additional taxes while keeping supply low?

Imagine they oversupply the HDB housings with 30K units every year, you walk in to HDB, you can even move in to a BTO immediately without waiting, you can get 30 year loan at 10% downpayment easily without those TDSR. The rich of course can buy a few units at good price as they pleased as the supply is huge. Resale transaction is active with many buyers and sellers, no penalty to flip, easy to sell and buy. No taxes and so more people find it cheap to buy.

So, what is the purpose of controlling the market with heavy taxes and limited supply?

ABSD does nothing to curb non-speculative demand, which is what we are talking about here (new marriages vs new BTO supply). What ABSD does is it removes the speculative element in housing, no newly wed couple is going to get penalised or taxed if they are only buying one unit of housing for self stay. You might ask why must the govt curb speculation? Its simple. Just look at what happened to all the countries with housing bubbles, it all ends badly at some point. I'm sure the govt will remove the cooling measures at some point, possibly when interest rates are no longer at zero anymore.

Singaporeans ought to count themselves lucky that the govt intervened early, look at how badly oversupplied the market is right now, vacancy rates are rising and its approaching pre-crisis highs, a lot of speculators are stuck with empty units that they cannot lease out. I myself know a few HDB upgraders who bought another BTO or EC and they are currently holding 2 HDB flats because they cannot sell the old flat unless they sell at a deep discount to valuation. The situation isn't so bad now because prices stopped rising about 1.5 years ago, imagine the consequences if people had continued to bid up properties amid rising vacancy rates.

And HDB flats don't cost nothing to build, so the govt is not going to deliberately oversupply the market, its always been a balance between keeping the masses happy and the market stable.

 

[hindsight]

Cause you don't know that hdb actually stop building new flats for 5yrs during mah bow tan that time. He is the reason why we have high property price. If i rem correctly that 5yrs they didn't even release any land sale for private condo.

Anyway the even if hdb is able to launch 26k per year, they still need 3-4yrs to build it.

I know the market was undersupplied during MBT's time, but thats in the rear view mirror now, its all reflected in the very high prices we see today anyway, what we are discussing now is the market going forward.

And you still don't understand... the BTOs were already launched between 2011 - 2014 after KBW took over, most will be completed between 2014-2017, we are in May 2015 so the market is in the midst of being oversupplied, this is why vacancy rates are rising so quickly. KBW now has plans to cut supply from 2015 onwards, assuming a 3-4 year lead time supply will only be reduced in 2018 or 2019, but the slight supply deficit will not be sufficient to overcome the large housing stock oversupply thats been built up in the last few years.

 

[Perisher]

Healthy discussion going on here, just don't get too heated. Afterall, it's just a discussion, nothing's gonna change no matter what we say here.

Whether it's oversupply with empty units and rising prices or under-supply with many couples unable to get their BTO with cooling measures, ultimately average masses' wages can't keep up.

 

[Mr.Canberra]

Healthy discussion going on here, just don't get too heated. Afterall, it's just a discussion, nothing's gonna change no matter what we say here.

Whether it's oversupply with empty units and rising prices or under-supply with many couples unable to get their BTO with cooling measures, ultimately average masses' wages can't keep up.

Yes I agree stick to healthy discussions even views may differ. After all we are all Singaporeans.

Wages unable to rise significantly and will continue to be suppressed due to globalisation.

Not say I carry government's balls but because I prefer to see the bigger picture. Just look at Hong Kong's public housing. Sibei jialat you know?

Hong Kong auntie can break down and cry in front of the MP due to the ridiculous real estate prices. A 47 sqm 2-Room HDB BTO at around S$100K with or without grants is considered very cheap liao. Many Hong Kongers are willing to trade places with us.

The recent survey on Singapore being the most expensive city to live in Asia is bollocks. It should be Hong Kong and Japan. Not Singapore!

 

[zoossh]

Wages unable to rise significantly and will continue to be suppressed due to globalisation.

globalisation? u mean indiscriminate immigration policy bah?

Not say I carry government's balls but because I prefer to see the bigger picture. Just look at Hong Kong's public housing. Sibei jialat you know?

Hong Kong auntie can break down and cry in front of the MP due to the ridiculous real estate prices. A 47 sqm 2-Room HDB BTO at around S$100K with or without grants is considered very cheap liao. Many Hong Kongers are willing to trade places with us.

The recent survey on Singapore being the most expensive city to live in Asia is bollocks. It should be Hong Kong and Japan. Not Singapore!

u should check out income to housing ratio. japan is cheaper than sg. hk is the worst. sg is among the worst. but should we compare with the worst? ie if u score 20 mark out of 100, u dun compare with the one who score 10 mark, but all those who score from 20-100.

 

[Mr.Canberra]

globalisation? u mean indiscriminate immigration policy bah?

Hahaha if you want to put it that way.

 

[Izumi8]

And you still don't understand... the BTOs were already launched between 2011 - 2014 after KBW took over, most will be completed between 2014-2017, we are in May 2015 so the market is in the midst of being oversupplied, this is why vacancy rates are rising so quickly. KBW now has plans to cut supply from 2015 onwards, assuming a 3-4 year lead time supply will only be reduced in 2018 or 2019, but the slight supply deficit will not be sufficient to overcome the large housing stock oversupply thats been built up in the last few years.

Sound like the exact same quotes from local media or officials.BUT have you think about why we have this so called oversupply issues? If everyone can afford to buy, there will be no supply issues. The problem is the demand side purposely lowered by gov. Of course local media will not tell you this. They keep insisting oversupply but the fact is many people postponed their purchases due to gov policy. DO you know who is causing this oversupply issues which will not exist if they just remove the cooling measures

 

[hindsight]

Sound like the exact same quotes from local media or officials.BUT have you think about why we have this so called oversupply issues? If everyone can afford to buy, there will be no supply issues. The problem is the demand side purposely lowered by gov. Of course local media will not tell you this. They keep insisting oversupply but the fact is many people postponed their purchases due to gov policy. DO you know who is causing this oversupply issues which will not exist if they just remove the cooling measures

I addressed this in an earlier post. The cooling measures do nothing to curb non-speculative demand, all it does is remove the speculators from the market because they were distorting the market.

Everyone wanted in because the market was undersupplied during the MBT days, vacancy rates were extremely low so it was easy to find a tenant, speculation was rife because the short term undersupplied market looked like it would never end. What most people don't know about property is that it has an extremely long lead time, in most cases supply can catch up with demand within a couple of weeks, Apple can crank up supply quickly if demand for IP6 is higher than anticipated, but you can't do that with property, the lead time is 3-4 years, not weeks. Price is not allowed to correct due to this very long lead time (i.e present supply CANNOT increase), prices can continue to move up for years but it ultimately leads to a crash when the overly large future supply comes onto the market. Economists call this "price elasticity of supply", property is very price inelastic in the short run, which means that supply doesn't respond to price changes at all in the short run.

I think the govt will only remove the cooling measures when it makes no more sense to speculate in the property market, could be due to higher physical housing stock, higher interest rates and higher vacancy rates. It will be removed at a time when it will not invite further speculation. I also sense that the govt views current prices as too high since the median wage has only gone up by ~50% in the past decade while property prices have doubled. Ideally property prices should correct by 25% to bring the increase in the past decade in line with wages, but I think such a large decline would have terrible consequences, so thats not going to happen. More likely scenario is a steady decline to maybe 15% while wages catch up in the next few years.

 

[Mr.Canberra]

Sound like the exact same quotes from local media or officials.BUT have you think about why we have this so called oversupply issues? If everyone can afford to buy, there will be no supply issues. The problem is the demand side purposely lowered by gov. Of course local media will not tell you this. They keep insisting oversupply but the fact is many people postponed their purchases due to gov policy. DO you know who is causing this oversupply issues which will not exist if they just remove the cooling measures

How can there be oversupply of HDB flats when the 2, 3, 4 and 5-Room HDB BTO flats are mostly snapped up in each exercise?

 

[hindsight]

How can there be oversupply of HDB flats when the 2, 3, 4 and 5-Room HDB BTO flats are mostly snapped up in each exercise?

And when will these BTOs be delivered? Tomorrow? Or the week after?

 

[MaoZeDuo]

Amk chengsan court 2018 500k

 

[hindsight]

How can there be oversupply of HDB flats when the 2, 3, 4 and 5-Room HDB BTO flats are mostly snapped up in each exercise?

No impending oversupply? Think again.

More empty homes on the horizon

The housing vacancy rate in Singapore may hit a record high of 9.8 percent in 2016 as private home completions rise from 19,900 units in 2015 to 20,900 by the end of next year, according to media reports citing a Barclays report.

Aside from the private home supply glut, the occupancy rate will also be pressured by growing public housing completions over the coming quarters.
Barclays expects public housing completions to increase from 28,000 units in 2014 to 26,000 this year and 20,000 by end-2016.

As a result, the overall vacancy rate increased to 7.2 percent at the end of Q1 2015. Island-wide private home rents have fallen five percent from their Q3 2013 peak, while suburban rents have fallen six percent from their Q2 2013 peak, the report said.

History shows that prices tend to drop significantly when the vacancy rate exceeds eight percent.

During the Asian financial crisis between Q2 1996 and Q4 1998, for instance, private home prices plunged 45 percent as the vacancy rate climbed from 6.2 percent to 9.7 percent.

With an annual private home demand of only 15,000 units we estimate 55 percent of total annual household formation of 26-27,00 to live in or enable upgrades to private homes we estimate the vacancy rate could reach 9.8 percent by 2016E, noted Barclays.

 

[djchris]

No impending oversupply? Think again.

Apple and orange man...he's talking about hdb and you are talking about private properties.