Will Raising the Ceiling for the HDB Income Affect Prices of Your Homes? Part 1

During the National Day Rally speech, the Prime Minister of Singapore, Lee Hsien Loong, declared that the ceiling rates for the HDB build to order or BTO flats will increase to $10,000 from its current rate of $8,000. The executive condominium prices will also increase to $12,000 from its current rate of $10,000. For a couple to qualify in buying a BTO or Build to Order property from the HDB, a couple’s joined total income should be below $8,000 per month. This amount is about 20 to 30% lower than the amount of the prices for resale flats in Singapore. stars77

Considering the plan of the Prime Minister, the income ceiling will be raised to $10,000 for studio apartments, 4 or 5 room flats, and mature town or estates in Singapore that offer 3 rooms. The income ceiling for the 3 room standard non-mature towns or estates will be raised to $5,000. All 2 room types of flats will be raised to $2,000. thekayelist

HDB supply and demand in Singapore

HDB represents the Housing and Development Board in Singapore, which is a housing provision that introduces low rental and low cost housing programs. The HDB was created in February 1960 as a 5 year building program that replaced the SIT or Singapore Improvement Trust. The HDB covered housing standards and building criteria that will qualify for a 5 year plan. The HDB currently provides the highest percentage of population in Asia.

The HDB implemented the increase in the ceiling prices in 2010. The new program thoroughly considered the needs of the groups of people living in Singapore who showed interest in rental housing. Looking at the HDB supply and demand, the statistics showed that even HDB has been found to hardly meet the local domestic needs of the population. This did not even include the massive migration of foreigners, workers, and Permanent Residents.

Based on my estimate, the Ministry of the National Development may have taken the wrong numbers for the new pricing. There were remarkable 100,000 units under supply of HDB flats. Even thought there is still a long line of people waiting for registration at the BTO, one cannot deny that there are about 22,000 to 25,000 marriages occurring for each year. Looking at the existing demand for HBD flats, Singapore is still experiencing short supply of HDB flats.

Even the Balance Flats do not provide adequate supply to its consumers too because most of the sites that were offered under the Sale of Balance Flats were either in status of near completion of still under construction. There is a very slim probability that consumers may be able to get a flat from the Sale of Balance Flats exercise because of the very high demand and inadequate supply. atlasmatras

Consumers who were not given an invitation by the government to buy under the Sale of Balance Flats exercise may consider pursuing their housing loans under the BTO system. The main supply of flats was focused on the BTO. The only way to meet the inadequate supply of Balance Flat exercise units is to offer the BTO units of the HDB. This means that the shortage experienced by the consumers will stay for at least some time until the government completes construction of the BTO flats. The estimated time expected to complete the units is 2 to 4 years. It takes an average of 2 years to complete even one project of the HDB. clothing wholesale

Supply of BTO

Looking at the current supply of BTO units, there were only 5,500 units available based on the 22,000 to 25,000 marriages occurring each year. In September 2011, the BTO launched 260 new units of standard 3 rooms studio apartment at the Ang Mo Kio, 520 new flats of 3 rooms and 4 rooms standard apartment at the Jurong East, and 190 new units of standard studio flats at the Jurong West. The government built new 2,000 units of 3 rooms, 4 rooms, and 5 rooms premium studio apartments at the Punggol area. Another 2,450 new units of standard 3 rooms, 4 rooms, 5 rooms standard studio apartment at the Sengkang area. Casanovabrooks

We may not be able to cover all angles about the BTO and HDB housing programs because of the difficulty in finding the appropriate data at the HDB website. The Adora Green and Centrale 8 in Tampines were under the list of the HDB properties from DBSS confirmed sales launches. The confirmed list of areas for DBSS Development were:

Bedok PH1 at Bedok Reservoir Crescent
Awarded 04 Nov 2010
Won by CEL Development Pte Ltd

Hougang PH2 at Upper Serangoon Road
Awarded 02 Dec 2010
Won by Kwan Hwee Investment Pte Ltd

Yuan Ching Road
Awarded 10 Jan 2011
Won by Hoi Hup Realty Pte Ltd

Clementi Avenue4
Awarded 10 Mar 2011
Won by EL Development Pte Ltd

Pasir Ris Central / Pasir Ris Drive 1
Awarded 3 Jun 2011
Won by Singxpress Land (Pasir Ris) Pte Ltd and Kay Lim Holdings Pte Ltd หนังใหม่ 2023

Based on the 400 to 500 units per project, the estimated outcome would at least be 2,000 to 3,000 additional units for the HDB supply. This supply for sure would not meet the increasing needs of the population. I can see that there might be another price increase to keep the balance between the supply and the consumers. People were already voicing complaints about the inflated $880,000 prices of the new HDB DBSS flats. Even though if the prices were reduced to $780,000 in a few days,

 

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