Breathing new life into old estates: As part of the move to revamp mature estates across Singapore, some 10,000 flats have been planned for Alexandra Canal (SINGAPORE) The Housing and Development Board (HDB) appears to have taken on an expanded role as a guardian of the low income and the elderly, as well as a champion of the young by providing more revamped old estates and trendy new ones.
Following Prime Minister Lee Hsien Loong's National Day Rally speech on Sunday, Citigroup economist Chua Hak Bin said that there seems to be a 'major shift' in the thinking behind HDB's role.
Noting that the government was actively addressing issues like the income divide, ageing population and affordability of housing, Mr Chua added: 'There is a sense that the social support system is centred on HDB.'
Beyond these social implications, HDB could also be taking a greater role in shaping market forces.
On Punggol 21 Plus, CIMB-GK regional economist Song Seng Wun noted that up to 18,000 high quality flats, mostly by HDB, have been planned and that PM Lee's underlying message appears to be 'jangan panic' (don't panic) as there is a lot of supply coming on.
Another 10,000 flats have been planned for Alexandra Canal as well.
PM Lee did not directly address the issue of rising private property prices but Mr Song believed that an 'accelerated HDB building programme', including HDB estates of such apparent high quality as Punggol 21 Plus could have some influence on the lower end of the private property market.
Whether Punggol 21 Plus is meant to take some heat off the private property sector is unclear but Mr Song said that many of his colleagues were impressed enough by PM Lee to want to move there.
The National Day Rally speech is generally seen as an address meant for heartlanders but Savills Singapore director (marketing and business development) Ku Swee Yong believed that PM Lee's stand on maintaining income tax rates for the wealthy suggests that 'luxury property prices should be allowed to go the way of market economics'.
'PM Lee prefers to raise the bottom, including the standards for government housing and the mass market,' added Mr Ku.
An immediate impact of the new policies is likely to be the formation of more family units.
As ERA Singapore assistant vice-president Eugene Lim noted, private property has moved beyond the 'threshold of affordability' for many.
'Before, a three-bedroom condo might be in the range of $500,000, but this has now increased to between $600,000 and $800,000,' he said.
Propnex CEO Mohamed Ismail estimated that with the additional $30,000 CPF Housing Grant, lower-income families can take advantage of up to $70,000 in grants, if the $30,000 family grant and the $10,000 grant for families buying a property near their parents are included.
Considering today's average resale price of $170,000 for a three-room HDB flat, buyers will then only have to take a loan of $100,000.
'This will fit into the budget of many young families and will be an incentive for married couples to purchase their own property,' Mr Mohamed added.
On the HDB policies as a whole, Cushman & Wakefield managing director Donald Han said: 'It's all coming together.'
Saying that the HDB market is the only sector that is lagging, Mr Han added: 'What will keep the HDB market afloat is a value proposition.'
Interestingly, the group of people the policies are meant to help - the elderly - may offer the most resistance, especially when it comes to buying back their flats on a shorter lease.
Citigroup's Mr Chua noted that the private sector does offer reverse mortgages, but this has had poor take-up.
Mr Chua believed that the issue of buying back of flats as well as the proposed compulsory annuity scheme may need to be 'centrally administered' to succeed.
On a philosophical level, Mr Chua noted that the government has profited from the booming global economy. 'With this revenue, it can cushion the impact of globalisation,' he said.
'In terms of fiscal traffic, it's good because it means the government will be spending more,' he added.
.jpg)
No comments:
Post a Comment