Housing & Development Board Analysis Essay Example
Housing & Development Board Analysis Essay Example

Housing & Development Board Analysis Essay Example

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  • Pages: 2 (497 words)
  • Published: September 30, 2017
  • Type: Article
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This year has seen a higher rate of addition, surpassing the estimated 0.5 percent increase from previous quarters. In Singapore, Housing & Development Board (HDB) resale prices have reached an all-time high, with the Resale Price Index (RPI) experiencing a two percent rise from the second quarter to the third quarter. However, this surge in demand for resale flats may be indicating signs of moderation due to a large number of Build-to-Order flats being released this year. Despite this, buyers who are willing to wait for completion are obtaining better value and potentially improved amenities. Furthermore, there has been a decline in the volume of resale transactions for the first time in 12 months. In the third quarter of last year, there were 560 instances where the number of purchasers in resale transactions decreased from 6,581 in the second quarter to 5,903 in the third quarter. This decrease may not be attributed


to buyers staying away but rather due to a scarcity of available resale flats. As a result of reduced demand, there has been an increase in average cash-over-valuation (COV) by S $4,000 to S $5,000 compared to the previous quarter.According to real estate firm Propnex, the Cash Over Valuation (COV) for private properties in Singapore increased by 20% on a quarterly basis.During the first two quarters, COVs ranged between S $25,000 and S $28,000 before rising to S $30,000 in the third quarter.
The exorbitant prices of private properties have created difficulties for numerous individuals in affording them. Consequently, there is a significant demand in the resale market from those who are ineligible to purchase new flat

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or cannot afford private properties. This surge in demand has also resulted in an increase from "downgraders," who have sold their private properties and are willing to pay extra for some of these resale flats. In terms of rentals, instances of subleasing rose by approximately four percent, with 6,891 occurrences in the second quarter increasing to 7,142 instances in the third quarter. The number of HDB flats approved for subleasing also saw an increase from 41,814 units in the second quarter to 42,920 units in the third quarter. Mr Han mentioned that property prices have actually risen by 92% to 93% over the past five years instead of decreasing. Due to this trend, many sellers opt to retain their properties with hopes of higher capital returns within the next year. Renting HDB rental flats with four or five rooms typically costs around S $2,000 to S $2,500 per month – an appealing option for those seeking affordable accommodation. Furthermore, compared to other residential property types, HDB flats offer higher yields ranging from 4.5% to five percent compared to only 2.5% to 3.5% for private propertiesMr Koh stated that if resale flat prices are excessively high, some people may opt to rent instead until prices decrease. In response, the HDB has introduced an online service that enables the public to search for fully rented HDB flats offered by owners. This initiative aims to enhance transparency and provide valuable information to prospective renters and flat owners, empowering them with better decision-making capabilities.

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