Housing & Development Board Analysis Essay

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This is the highest rate of addition this twelvemonth compared to the 0. 1-per cent bead in the first one-fourth and the 0. 4-per cent addition in the 2nd one-fourth. It was besides higher than the brassy estimation of 0. 5 per cent released earlier this month. Meanwhile. resale monetary values of Housing & A ; Development Board ( HDB ) flats in Singapore hit a record high. HDB’s Resale Price Index ( RPI ) rose from 194 in the 2nd one-fourth of this twelvemonth to 197. 9 in the 3rd one-fourth. This represents an addition of two per cent over the old one-fourth. the same as that of the brassy estimation released on October 1. – Evidence for an addition demand for resale flats But with a bumper harvest of 27. 000 Build-to-Order flats being rolled out this twelvemonth. analysts said the resale market may be demoing marks of moderating.

Growth for the first three-fourthss of this twelvemonth is 3. 9 per cent. This is lower than the one-year RPI growing of 14. 1 per cent in 2010. and 10. 7 per cent last twelvemonth. Donald Han. particular adviser at HSR Property Consultants. said: “Buyers who are able to wait for the merchandise to be completed in 24 to 36 months are acquiring better value proposition in footings of cheaper monetary values. and possibly better comfortss compared to one who’s purchasing a resale flat. The volume of resale minutess besides fell for the first clip in 12 months.

Resale minutess besides fell by about six per cent from 7. 011 instances in 2nd one-fourth to 6. 560 instances in the 3rd. – Number of purchasers dropped The last autumn in resale minutess was in the 3rd one-fourth of last twelvemonth when minutess fell from 6. 581 in the 2nd one-fourth. to 5. 903 in the 3rd. Analysts said that this might non be because purchasers are remaining off. but because there is a short supply of resale flats in the market. – Reason for the lessening in the demand ( Isnt this is for supply?

The figure of Sellerss in market. ) They added that this has pushed the average cash-over-valuation ( COV ) up by S $ 4. 000 to S $ 5. 000 compared to the last one-fourth. Harmonizing to existent estate house Propnex. COVs hovered between S $ 25. 000 and $ 28. 000 in the first two quarters. before lifting to $ 30. 000 in Q3. This means a 20 per cent addition quarter-on-quarter. Chris Koh. manager of Chris International. said: “Regardless of whether there are BTO flats. if private belongings monetary values are excessively high. many are unable to afford private belongings.

So they turn to a resale market to purchase a level alternatively. So you still see a strong demand from those non eligible to purchase trade name new flats. those who can’t afford private belongings and have to purchase a resale level. – Reason for the addition in the demand. ( Price of related good ) “There’s one more group. I call them the ‘downgraders’ . They have cashed out their private belongings. that’s why they don’t mind paying a premium for some of these resale flats. ” In the rental market. subleasing minutess rose by about four per cent.

The figure of instances increased from 6. 891 in the 2nd one-fourth to 7. 142 instances in the 3rd one-fourth. The entire figure of HDB flats approved for subleasing besides rose to 42. 920 units in the 3rd one-fourth. compared to 41. 814 units in the 2nd. Mr Han said: “In the last five old ages. monetary values have non gone south. In fact. monetary values have grown by 92 to 93 per cent since five old ages ago… So. a batch of the able Sellerss are maintaining it for hopefully higher capital returns for the following 12 months. ( supply )

If you look into a rental proposition. HDB rental flats – if you look at mean four-room or five-room. you’re looking at approximately about S $ 2. 000 to S $ 2. 500 per month. It provides a really good fertile land support for renters out in the market looking for inexpensive adjustment. “The output coming from HDB flats is reasonably attractive as good. compared to other categories of residential belongings. We’re looking at outputs of 4. 5 to five per cent. compared to private belongingss which would be about 2. 5 to about 3. 5 per cent. “

Mr Koh added: “I’m non certain if there’s a co-relation. but I won’t deny that if monetary values of resale flats are excessively high. some would non be able to afford it. So the following best option will be to lease and wait for monetary values to come down. “- Reason for lessening in demand when monetary value rise. ( Taste and penchant? ) The HDB said it introduced a new e-service on Monday to enable the populace to seek for the market leases of full HDB flats rented out by proprietors. It is hoped that this will let better transparence in the subleasing market. and assist possible renters and level proprietors make informed determinations.

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