Tall Orders For HDB Flats

Source : TODAY, Wednesday, 12 March, 2008

BTO project Punggol Spring four times oversubscribed

THE demand for public housing continues to be brisk. Case in point: The Housing Development Board's (HDB) first build-to-order project this year at Punggol Spring (artist's impression) is already four times oversubscribed.

New flats aside, property agents have also described the HDB resale market as the kingpin for the real estate sector this year.

The application for Punggol Spring, where 494 units of four-room flats will be built, will not close until March 17 but the project is already oversubscribed with 2,093 applications.

The Punggol Spring development makes up some of the 4,500 new flats that the HDB has committed to building for the first half of this year. Prices of the Punggol Spring flats range from $204,000 to $259,000.

Apart from this build-to-order development, the HDB's bi-monthly sale of four-room and larger flats last month also drew overwhelming response, with more than 10,000 flat buyers vying for just 278 units.

Mr Eugene Lim, associate director of ERA, said: "The buyers are usually first timers and they do not have so much cash. As the norm is to pay cash over value for the resale market, they are inevitably being pushed to the new flat market where they don't have to come up with as much cash or any cash at all."

Still, the transaction volume in the HDB resale market is expected to remain strong. Industry players expect 30,000 units to be sold this year, 1,000 more than last year.

They also expect prices to increase by about 10 per cent, compared to last year's rise of more than 17 per cent.

Property agents said the spike last year was partly due to a sharp rise in cash over valuation (COV), but this is likely to change, they added, as buyers have hit a threshold when it comes to forking out more cash.

Propnex CEO Mohamed Ismail said: "The central areas — Queenstown, Bukit Merah, Toa Payoh — were getting as high as $100,000 but such prices are not sustainable in the long term.

"Therefore, I foresee that for the very high-end side in the central location, the COV will dip quite drastically."

Despite the high demand for flats, agents are confident there will be enough to go around, whether it is for families or singles.

They also welcomed the HDB's new incentive to offer an extra $9,000 grant to singles who buy a resale flat and live with their parents, as announced by Mr Lim Boon Heng, Minister in the Prime Minister's Office, in Parliament last week.

The scheme, however, is unlikely to have any impact on the market given the small segment it serves. — CHANNEL NEWSASIA