Housing Ahead


The income cap for HDB BTO would be raised to $10,000 from the $8,000 probably. Hence, this would affect the HDB resale market since those who earned up to $10,000 can now choose to buy a new HDB instead of a resale HDB. Pushing resale HDB prices down because of reduced demand, and a knock on effect on mass market condos even.

Furthermore, the new HDB flat new couples might want to buy is perceived to be in a better location. There would be more BTO and not only that, BTO in matured estates where transport and other infrastructure is up already, and near where their parents stay. Hence, these would be more attractive to younger couples as they can enjoy the added HDB grant of staying near their parents. The reports are that Kallang and Tampines would be sites for the new BTO. Already, 4,000 units were launched for Tampines and Pasir Ris. So therefore, it is not only increased supply, but the right kind of increased supply. MND released 12,000 this year and 13,000 more in the next 7 months.  With the anticipated average of 14,500 private homes released annually till 2014 , there is a concern of over-supply even if the government is serious about cutting down foreign immigration here drastically.

A mass market condo dampener would be sale of more EC. EC, popular in the late 1990s and early 2000s, have seen a renaissance lately. However, the release of more land for EC is controversial as should the HDB fill in this middle class demand by adopting to changing demographics and demand, or should the HDB stick to providing basic housing so that the private property market is not distorted with more ECs?

Khaw is settling fast into his new job and tackling the supply side of the house. In particular, the supply of new HDB which they control and MND is not going into stamp duties, criteria for new and resale HDB owners etc for the moment. The previous cooling measures by Mah Bow Tan did not slow down the property market boom and that was one reason which finished the former MND minister’s political career. However, while there is increased supply of new HDB flats, would it bring down the price of new HDB flats too since HDB house pricing is a magic one plucked out of the air, something about being a reflection of market subsidy.

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