Sunday 18 October 2015

More BTO flats likely in 2016 to meet demand: Lawrence Wong

But figure expected to be under 20,000 - well below the numbers from 2011 to 2013
By Yeo Sam Jo, The Straits Times, 17 Oct 2015

The supply of new Housing Board flats is likely to go up next year to meet higher demand arising from recent policy changes.

National Development Minister Lawrence Wong, who took over the portfolio just this month, said yesterday that he has asked the HDB to look into building more new flats.

But this figure is likely to be under 20,000, he noted - higher than this year's number but well below the levels seen from 2011 to 2013.

During a visit to the Waterway Terraces I project in Punggol, Mr Wong said: "Because of the new measures that were introduced, we expect demand to go up. So I've asked HDB to look at supplying more BTO (Build-To-Order) flats next year in order to accommodate higher demand."

Policy tweaks have widened the pool of eligible buyers. These include raising the household income ceiling for new flats from $10,000 to $12,000, enhanced housing grants and a new two-room flexi scheme that offers elderly buyers units for shorter leases.

But the Government is not changing its tapering approach, Mr Wong stressed. "We are continuing to taper the housing programme, and we will continue to move in that direction," he said, describing the supply boost as "temporary adjustments".

He said the HDB will be looking at the response to next month's BTO sales exercise before putting a number on next year's flat supply.

From 2011 to 2013, then National Development Minister Khaw Boon Wan ramped up construction to meet "pent-up demand". More than 25,000 BTO flats were launched each year then. As demand was met, last year's flat supply was tapered down from 24,300 initially to 22,455.

The HDB further trimmed this year's supply from 16,900 to 15,000.

Another increase in supply will be good news for prospective buyers like art director Alan Choong, 26, who is looking for a unit with his girlfriend. He said: "We always want to hear that there are more flats - our chances are better and there are more choices."

ERA Realty's Mr Eugene Lim said the step-up in supply will have a "minimal" impact on the resale market, as many BTO flats are in non-mature estates like Punggol. "For resale flats, buyers still want homes in mature estates," he said.

He added that the new Proximity Housing Grant of $20,000 will also serve as an incentive for many families to opt for resale flats near their parents or married children.

When asked about recent complaints about defects in new flats, Mr Wong said such feedback comes "partly because HDB has been building so many flats". "Given the bigger base, you will have more feedback about defects," he said. "HDB tries its best to build quality flats but there will always be some of these issues arising from construction quality. It happens to all developers, private and public, no matter how hard they try.HDB's assurance is that if there are issues that are raised, HDB will do everything it can to make sure that the defects are resolved. And they are doing so."

Mr Wong also visited some families at Waterway Terraces I. Close to 10,000 BTO flats along the Punggol Waterway have been launched since 2010. About 6,000 of them will be completed by the year end.

He also said property cooling measures are set to stay put, at least for now, but added that the situation is "fluid" and "very dynamic".

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Not time yet to unwind property cooling measures: National Development Minister Lawrence Wong
Govt monitoring economic situation closely and will adjust 'if and when conditions change'
By Yeo Sam Jo, The Straits Times, 17 Oct 2015

Property cooling measures are set to stay put, at least for now, National Development Minister Lawrence Wong said yesterday.

"The price adjustments that we've seen so far have been moderate compared to the increase in prices that took place very quickly in the past few years," he said on a visit to the Housing Board's Waterway Terraces I project in Punggol.

"It's still not time yet to unwind the cooling measures. We don't want to risk a premature market rebound."

But Mr Wong added that the situation is "fluid" and "very dynamic".

"Economic conditions both externally and within Singapore are changing, so we are monitoring the situation very closely and we will adjust as necessary if and when conditions change."

HDB resale prices rocketed up by almost 50 per cent between 2009 and 2013.

Since their peak in the second quarter of 2013, prices have fallen about 10 per cent.

Private home prices are also down 8 per cent from their last peak in the third quarter of 2013.

These price drops have been in part due to several measures introduced to tame the hot market.

These include a mortgage servicing ratio limit of 30 per cent, introduced in 2013, capping the proportion of gross income that can be used to service a loan for an HDB flat.

Another measure, the total debt servicing ratio of 60 per cent, was also introduced in 2013. This prevents financial institutions from granting a home loan if the total monthly repayments of prospective borrowers exceed 60 per cent of their gross monthly income.

PropNex chief executive Mohamed Ismail Gafoor said that a total removal of these cooling measures could backfire with yet another price surge. "All the effort in the last three years would go down the drain if they reverse the measures too quickly," he said.

But he added that the market might benefit if some, such as the Additional Buyer's Stamp Duty (ABSD), are relaxed in stages.

Foreigners currently have to pay an additional 15 per cent of the property price when they purchase a home here. Singaporeans buying their second and third home have to pay 7 per cent and 10 per cent respectively.

Mr Ismail said this discourages property investment and badly affects the market in the core central region, where many foreigners live.

According to the Inland Revenue Authority of Singapore, the number of ABSD transactions by foreigners was 1,149 last year, down from 1,980 in 2013 and 2,432 in 2012.

Mr Wong did not rule out the possibility of lifting certain measures ahead of others, but stopped short of committing to which might be the first to go.

"We don't have to adjust by unwinding everything... but it's premature to say what exactly we will unwind, what will happen."

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