Over 200,000 public, private homes to be completed by 2016

SINGAPORE — More public and private homes will be ready for occupation in the next three years. A total of 204,461 units will be completed over the next three years, outstripping the National Development Ministry’s earlier projection of 197,559 units.

Revealing this on his Facebook page yesterday, National Development Minister Khaw Boon Wan said “good progress” is being made in the ramp-up of the home-building programme. The increase comes from private housing and executive condominiums (ECs), with 4,608 private homes and 2,294 more EC units set to be completed.

Mr Khaw’s post came after figures released by the Housing and Development Board (HDB) showed that resale flat prices fell more than estimated in the last three months, registering the first decline since the first quarter of 2009 when Singapore’s economy was in recession.

The HDB said resale flat prices fell 0.9 per cent in the last quarter. Its estimate released earlier this month had placed the decline at 0.7 per cent.

There were also fewer resale flat transactions in the last three months, as the number fell by 13 per cent to 4,529 cases as compared to the 5,235 cases in the previous quarter.

The difference between HDB’s estimate and the final figure did not surprise analysts, as they noted that transactions from the last few days of September were not captured in the estimate.

CEO of PropNex Realty Mohamed Ismail also noted that the “full effect” of the tighter housing loan restrictions — known as the Total Debt Servicing Ratio and the Mortgage Servicing Ratio (MSR) — were felt last month, leading to a fall in resale transactions. “The slide continued in the last few days of the month, that’s why it contributed to the overall drop to 0.9 per cent,” he added.

Industry watchers are expecting demand and prices of resale flats to continue falling this year, citing the loan restrictions, a larger supply of build-to-order (BTO) flats and moves to allow singles to buy new flats, which have dampened demand. The HDB said yesterday it is on track to launch 25,000 BTO flats for this year. Next month, it will offer 4,950 new units in Bukit Batok, Hougang, Jurong West, Sembawang and Woodlands, while concurrently offering another 3,000 remaining units up for sale.

Mr Ismail said: “The HDB resale market is effectively only serving upgraders and limited permanent residents now, resulting in the weakening of prices and volume of transactions.”

Cash-over-valuation (COV) prices for resale flats have also spiralled downward to between S$17,000 and S$18,000, according to data from PropNex and ERA Realty Network, with Key Executive Officer of ERA Realty Network, Mr Eugene Lim, pointing out that COV for four-room flats fell the most.

According to ERA’s figures, COVs for four-room flats fell 37.9 per cent to S$18,000 in the last quarter. “The sellers of three or four-room flats with not-so-prime attributes are also worried that if they do not lock in their buyers now, COV will dip some more, so the mood amongst sellers is that they are generally more accommodating,” said Mr Lim.

Buyers also had to compromise and go for cheaper flats which are smaller or had poorer locations in the wake of the tighter loan restrictions, he added.

According to HDB data, Queenstown had the highest COV at S$50,000 for four-room flats in the third quarter. In comparison, COV for a similar-sized unit in Punggol, was S$10,000.

Analysts are predicting total resale transactions for this year to be less than 20,000 cases, as market conditions are not expected to recover in the coming months. This will make it the lowest volume of transactions in the resale market historically since the turn of the decade, noted Mr Ismail.