Will an increase of the income ceiling of the HDB affect other home prices in Singapore? Part 3

People who just marry find it difficult to meet the financial requirements of buying an executive condominium. This type of housing accommodation requires higher prices and at the same time have many government restrictions to follow than most regular condominiums. The HDB implemented a minimum occupancy of at least 5 years for all applicants. However, they have the right to sell the estate or make it become a private estate only after 10 years. Below is the list of the latest HDB flats sales launches in different areas in Singapore

1. FCL Compassvale Pte Ltd at the Esparina Residences
2. MCC Land (Singapore) Pte Ltd at the Canopy
3. Punggol Field EC Pte Ltd at the Prive
4. Maxdin Pte Ltd & Lee Carriers Pte Ltd at the Austville Residences
5. Pasir Ris EC Pte Ltd at the Belysa
6. Qingdao Cosntruction (Singapore) Pte Ltd at the RiverParc Residence
7. Grand Isle Holdings Pte Ltd at the Blossom Residences

Here is the list for future EC development in Singapore

1. Hoi Hup Realty Pte Ltd at the Tampines Avenue 8
2. Camborned Developments Pte Ltd at the Choa Chu Kang Drive
3. Sim Lian Land Pte Ltd at the Tampines Central 7
4. FCL Tampines Court Pte Ltd & Keong Hong Construction Pte Ltd at the Punggol Way Punggol Field

In 1996, the government of Singapore launched the executive condominium in an attempt to improve the standard of living of the people as well as gradually change the image of most areas to better up market residential areas. The architecture of the HDB flats was inspired from the design and layout of private condominiums. The introduction of the HDB flats was a good idea to raise and meet the match of the population’s income level and at least, hopefully, will promote the economic activity of the region. The architecture was recycled from the condominium formula and designed to make the housing better accessible to the lower income group of the population.

The objective is to make it easier for couples to access flats if their total monthly income falls within or below $10,000. The idea is to create supply for the people. The state has been helping the people access decent housing by taking advantage of the indirect financing provided by the government. The government required interested buyers to pay 20% equity in cash. The remaining balance could be settled through monthly amortizations or installments. The government allows the occupants to sell the units only after 5 years tenure.

Resale prices of HDB flats

There is no formal way of telling about the new prices that the government planned for the HDB flats. Even if you read the whole manual, it is still vague. However, our research has come out with the price ranges and supply statistics of the different flats offered at different areas in Singapore

Based from the 2009 to 2010 key statistics, the price range of flats offered were

1. Jurong West offered $86,000 to $103,000 for a 2 room condo, $138,000 to $173,000 for a 3 room condo, and $223,000 to $266,000 for a 4 room condo.
2. Choa Chu Kang offered $140,000 to $169,000 for 3 room condo and $225,000 to $278,000 for a 4 room condo.
3. Bukit Panjang offered $72,000 to $94,000 for a 2 room condo, $125,000 to $157,000 for a 3 room condo, and $210,000 to $250,000 for a 4 room condo.
4. Woodlands offered $141,000 to $175,000 for a 3 room condo and $228,000 to $288,000 for a 4 room condo.
5. Sembawang offered $83,000 to $104,000 for a 2 room condo, $128,000 to $172,000 for a 3 room condo, and $212,000 to $275,000 for a 4 room condo.
6. Punggol offered $89,000 to $114,000 for a 2 room condo, $151,000 to $188,000 for a 3 room condo, and $234,000 to $322,000 for a 4 room condo.
7. Sengkang offered $74,000 to $98,000 for a 2 room condo, $116,000 to $171,000 for a 3 room condo, and $203,000 to $271,000 for a 4 room condo.
8. Hougang offered $88,000 to $111,000 for a 2 room condo, $142,000 to $182,000 for a 3 room condo, and $231,000 to $288,000 for a 4 room condo.

The prices and areas we gave you were the actual pricing of the BTO housing program. If we are to analyze the price ranges, we could say that the total income of the potential buyers, in this case, the couples, should be at least below $8,000. Still, the current prices are 20 to 30% less than the resale flats average pricing. The prime minister of Singapore also declared this.

Resale flat income ceiling

I believe that there should be no regulation for resale flats concerning income ceiling because having an income ceiling is only acceptable or applicable to HDB loans or housing grants. A careful examination of the figures would give us the idea that the income ceiling for buying a 3 room mature town estates or 3 room premium flats should be $10,000. This includes purchase of 4 room bigger flats. This further tells us that buying an extended family flat should not exceed $15,000.

Analyzing the situation, the income ceiling makes it difficult for first time buyers to buy HDB flats but does not defer or curb the demand. This means that raising the income ceiling is not effectively bridging the gap between the supply and demand because of these data

1. In 2008, there were about 3,642.7 permanent residents combined with Singaporeans out of the total population of 4,987.6 in Singapore.
2. In 2008, there were about 3,642.7 permanent residents combined with Singaporeans out of the total population of 4,987.6 in Singapore.
3. In 2010, there were about 3,771.7 permanent residents combined with Singaporeans out to the total population of 5,076.7 in Singapore.

Related posts:

1. Will an increase of the income ceiling of the HDB affect other home prices in Singapore? Part 1
2. Will an increase of the income ceiling of the HDB affect other home prices in Singapore? Part 2
3. Singapore Property Investors take note: MM Lee Says HDB prices to rise