Foreigners, including permanent residents (PRs), bought 321 ECs or 33 per cent of all resale homes last year, said Savills research and consultancy, with Indian nationals by far the biggest segment.

This is up from 18 per cent in 2004, when PRs were first eligible to buy exec condos, the poshest form of public housing.

The foreign market presence was even higher in the first two months of the year with foreigners comprising 45 per cent of transactions in the exec condo resale sector.

Foreigners made up 34 per cent of buyers in the private mass-market resale segment in the same period, indicating the increased appeal of exec condos.

This interest, coupled with the booming property sector, is also affecting values. The average price of a resale exec condo unit hit $634 per sq ft (psf) in the first two months of the year – up 31 per cent on the previous peak in the third quarter of 2008.

Exec condos, like other Housing Board (HDB) flats, are subject to a minimum occupation period of five years. After that, they can be sold only to Singaporeans and permanent residents. They become private property after 10 years and can then be sold to foreigners.

PRs can have their pick from about 9,494 exec condo units while non-PR foreigners have about 6,318 units open to them, Savills said.

Some of these units are in Bishan Loft, The Eden in Tampines and Simei Green condominium.

Foreign interest in resale exec condos is also expected to remain strong as many cannot buy an HDB resale home under the new property rulings, added Ms Christine Sun, senior manager at Savills research and consultancy.

The rules introduced last year require that those who buy an HDB resale flat on or after Aug 30 must dispose of their private property – including any overseas – within six months of the purchase.

Savills also said sales data showed Indian nationals have bought 296 resale exec condos since 2004, making them the biggest group of foreign buyers.

Malaysians were next with 276 units while buyers from China accounted for 222 units.

Woodsvale in Woodlands is the most popular estate with 138 transactions since 2004. Northoaks – also in Woodlands – and Simei Green condominium are slightly behind.

But Bishan Loft holds the price record with a 1,991 sq ft unit selling for $944 psf last October.

Price gains have been moderating lately with values inching up just 1 per cent in the first two months of the year compared with the last quarter, Savills said.

This could be down to the recent property measures, price resistance and an increased mass-market home supply from the bumper release of state land, the firm added.

Experts noted that exec condos are often value-for-money purchases as they can be up to 25 per cent cheaper than private mass-market homes.

‘New mass-market home prices have surged to record highs in recent quarters… Resale ECs that are more affordable than mass-market homes offer good alternatives for most of these buyers,’ Ms Sun said.

PropNex chief executive Mohamed Ismail said exec condos are also often relatively new and in reasonably good condition as most are less than 10 years old.

‘Most foreigners might have been relocated here and would buy exec condos for owner-occupation, often with a mid- to long-term perspective,’ he added.

Global Property Strategic Alliance chief executive Jeffrey Hong added that exec condos are more popular when the gap between public and private housing widens, as has been the case over the past year.

He expects interest from foreigners to continue increasing as more exec condos reach their 10-year mark and become eligible for purchase by foreigners.

Mr Marc Grange, a Singapore PR who works in the electronics sector and rents a flat in Bishan, said he would consider purchasing an exec condo unit as prices at new condos are out of reach for him and his fiancee.

‘Exec condos are a good middle ground. But their limited numbers mean finding a suitable place that’s in a good location is the hard bit,’ he said.

Source: Straits Times (subscribers only)

Could HDB and the Immigration and Checkpoints Authority, for example, have been more coordinated in monitoring the influx of foreigners and its impact on housing demand?

The argument is that if HDB had seen it coming, it should have built more flats earlier and eased the current supply crunch.

In answering the question, Minister Mah Bow Tan invoked images of the infamous HDB ‘ghost towns’. It was less than a decade ago that a surfeit of completed but unsold flats led to many near-empty HDB blocks in areas like Sembawang, Jurong West and Sengkang.

In 2005, there were still a staggering number of about 10,000 flats that were languishing in the market unsold.

‘Home-owners paid a price for the oversupply then,’ said Mr Mah, recalling the concern from citizens about safety, theft and deterioration of the empty flats.

Others griped about the negative effect the overhang of unsold flats was having on home prices.

Now, Singapore seems to have swung from one extreme to the other – from oversupply to undersupply. There is much unhappiness about the latter, but people have forgotten that oversupply is just as bad as undersupply, said Mr Mah.

The Government’s challenge, therefore, is to find the ‘sweet spot that is not too much, not too little’, he added.

It’s worth looking at both these statements more closely. Is an oversupply of flats really just as bad as an undersupply? I think many would disagree, for two reasons.

The first is that an oversupply of flats is a hyper-local problem that affects only certain new towns. For those who do not live in them or near them, the problem is out of sight and out of mind.

An undersupply of flats, on the other hand, is very much a national problem that affects all young married couples and others such as upgraders.

Second, an oversupply problem potentially depresses flat prices, but this affects mostly potential sellers, who already have a home.

An undersupplied market, on the other hand, affects buyers who do not yet have a home to call their own and are in urgent need of one to start families.

They also include upgraders who need more space because their children have grown.

The impact is more immediate on a wider spectrum of the population – people who want a home so they can move on with their lives.

This unhappiness could translate into a higher cost, politically, compared with an oversupply situation, for the current Government.

This brings us to the second of Mr Mah’s points: that however difficult it may be, it is critical for the Government to find the ‘sweet spot’ between the two evils.

Logically, this means finding some sort of middle ground between two systems that have been at opposite extremes.

HDB used to have a queueing system where it would build and complete flats before they were sold to buyers in the queue. This exposed HDB to considerable holding risk. If HDB misjudged the demand, or if demand evaporated for some reason, the result would be a big stock of unwanted, empty flats.

After the 1997-98 Asian Financial Crisis and the oversupply situation in the early part of the last decade, HDB switched to the build-to-order (BTO) scheme. Here, the opposite is true and HDB bears minimal risk: It builds a project only if there is a certain number of buyers for the flats.

Perhaps finding that ‘sweet spot’ requires fine-tuning this supply mechanism to something in-between: that is, HDB could consider permanently maintaining a buffer of completed flats.

This idea had been mooted before by MP Cynthia Phua (Aljunied GRC), who asked if HDB could consider keeping a stock of ready flats for families who are in urgent need of a home.

Mr Mah had pointed out that although HDB does not plan for a buffer, there is in reality a buffer of flats over and above the BTO flats that are available, and they have shorter waiting times.

These available flats are leftovers from other HDB schemes – such as the Selective En-bloc Redevelopment Scheme and surplus BTO flats – which are sold under HDB’s sales of balance flats exercise.

In a market like the current one, however, this buffer almost completely disappears. Recent BTO projects have also seen 95 per cent take-up rates, which means that in the coming years, there are unlikely to be many buffer flats.

Looking back, perhaps what the HDB could have done – and what some MPs have mooted before – is build 10-20 per cent extra new flats each year as part of a ‘steady state’ policy. The flats would be built regardless of whether or not they are bought at launch.

To minimise the risk of ‘ghost towns’ of empty flats, the HDB could plan it such that these flats are scattered in projects across the island, on plots that are perhaps extensions of established estates like Tampines or Yishun.

By the time the flats are built, the allure of immediate occupation would naturally attract buyers who are reluctant to wait three years for a new flat but who are also unwilling to pay the higher premium associated with resale flats.

If demand is weak, such as in an economic downturn, the HDB will have to hold on to the unsold units, but the holding risk is minimised compared with the old system.

If demand is strong, the HDB will not be left high and dry with nothing in reserve to offer. This buffer may then help alleviate the unhappiness on the ground.

Of course, there are risks associated with building extra flats. The HDB is answerable if thousands of completed flats are unoccupied.

The question turns on whether the public regards new HDB flats more as a necessity or a luxury.

The Government would never be faulted for stockpiling emergency supplies of essential items like rice, for example. If HDB flats are more like necessities, then the risks of undersupply outweigh that of oversupply.

If the experience of the last 10 years is anything to go by, finding that ‘sweet spot’ between oversupply and undersupply would be well worth HDB’s effort.

Source: Straits Times (subscribers only)

It is our priority to ensure that both landlord and tenant are comfortable with each other and have a common understand on the terms of tenancy.

As we are representing the landlords in renting these units, we do not require tenants to pay us any commission.

Please contact us if you are interested in renting one of the units below.

Block 13 Toa Payoh Lorong 7
Landlord is looking for 1 more tenants to take up a partial furnished room sharing with existing 3 tenants. Light cooking is allowed, with washing machine available for use once a week. Landlord is looking at renting at $300 per month for each tenant.

Common room for rent

Block 14A Toa Payoh Lorong 7 (Rented)
Landlord is looking to rent a common room to 1-2 tenant(s) at $600 per month. The room is fully furnished without aircon, equipped with television antenna. You will be staying with a couple and their maid. Excellent condition. Just move in with your luggage!

Block 235 Toa Payoh Lorong 8
Landlord is looking to rent a utility room to 1 tenant at $350 per month. The room is partially furnished with bed and cabinet. The room is equipped with television antenna so the tenant can use their own television. Light cooking is allowed, but no pork as landlord is Muslim. Ideal for working professional who is working nearby and looking to stay somewhere within walking distance to workplace.

Block 304 Canberra Road
Landlord is looking to rent 2 common rooms to 2-3 tenant(s) at $1100 per month ($550 each room). The rooms are partially furnished with beds and wardrobes. One of the rooms is equipped with television antenna. Light cooking is allowed. Only 8 minutes walking distance from MRT! Ideal for a group of working professionals who are interested to stay together but cannot afford the budget to rent an entire flat.

Senior Minister of State for National Development Grace Fu yesterday told Parliament that the Housing Board would discontinue the scheme with immediate effect as it “is no longer necessary”.

It was introduced in 1990 to enable unmarried Singaporean and PR siblings to buy an HDB flat. To qualify, their parents cannot own another HDB flat and must reside overseas.

“This was necessary then because the sublet market for HDB flats and rooms was limited, and there were few viable housing options for these siblings,” Ms Fu said in response to Marine Parade GRC MP Lim Biow Chuan’s question.

Under the scheme, Singaporean siblings could buy a new or resale flat while PR siblings could buy only a resale flat.

Ms Fu also revealed that only about 300 such cases got the go-ahead each year. That is less than 1 per cent of total flat transactions.

But there was no longer a need for the scheme, she said, because “with the liberalisation of the subletting market for HDB flats over the years, unmarried Singaporean or PR siblings whose parents are residing overseas can now rent a room or a small flat from the open market”.

The HDB first announced a review of the scheme last month, after The Straits Times sent in questions about netizens’ perception that the scheme enabled unmarried PR siblings above the age of 21 to buy HDB resale flats, whereas Singapore citizen siblings could not.

The HDB later clarified that citizen siblings whose parents live abroad can also apply to buy resale flats and that all such applications will be considered on a case-by-case basis.

But now, the Government has decided to do away with that scheme altogether.

Citizens who are single and aged 35 or older can buy a resale flat under the Single Singapore Citizen Scheme. Unmarried siblings whose parents are dead can also buy flats under the Orphans Scheme.

When contacted, Forum letter writer Tony Tan Keng Hong, 33, who raised this issue previously, said he was glad that the scheme has been discontinued.

“I think it’s a fair policy. HDB flats are meant for families primarily,” he said.

During yesterday’s Parliament sitting, National Development Minister Mah Bow Tan also fielded questions on the property cooling measures introduced last month. He said they were “pre-emptive in nature” as the Government wanted to act before a property bubble formed.

It was too early to say how effective the measures have been. The Government “will continue to monitor the property market closely”, he added.

Mr Mah revealed last Sunday that the median cash-over-valuation for HDB resale transactions in January has dipped to $20,000, from $23,000 in the fourth quarter of last year.

Source: Straits Times (subscribers only)

Today, her rental income is $2,300.

She and her husband, who live with her parents, said: ‘The rental market is getting stronger, so I plan to hold on to the flat for as long as I can.’

The median rental for those who have rented out their flats has been rising steadily in the past year or so, except for a slight dip in the second quarter of 2009. A two-room flat that commanded $1,100 in 2009 will fetch $1,300 now; a five-room unit, which could be rented out at $1,800 back then, will earn $2,150 now.

But despite this, the number of subletting transactions among public housing units has fallen, latest figures from the Housing Board show.

At the end of last year, there were 5,868, a 22 per cent fall from 7,540 in the third quarter.

Analysts and industry players The Straits Times spoke to said rentals are likely to head north as the economy grows and more workers come here to take up jobs. And with high property prices now, people will choose to rent instead of buy.

However, these factors have come up against the recent cooling measures: The Government has announced it will ramp up the supply of new flats from 17,700 last year to 22,000 this year.

PropNex spokesman Adam Tan said: ‘With an increased supply and a faster completion time for build-to-order flats, there is less of a push for home owners to rent a flat if they can wait it out.’

ERA key executive officer Eugene Lim said that in any case, rentals for HDB flats will not go past $3,000, because at that price, one can rent a private property.

Mr Colin Tan, research and consultancy director of Chesterton Suntec International, said: ‘Demand could also be coming from home owners who have sold their homes and are renting HDB flats, while waiting for prices to fall in a market correction.’

Among those who rent their homes and are being hit by rising rentals, some are examining their options. Mr Melvin Seow, 32, who pays $2,000 a month to rent a four-room flat in Punggol, said: ‘If rental prices are going to increase and I cannot get a flat soon, I may move back with my parents.’

Source: Straits Times (subscribers only)

They are agreeing to grant loans of up to 60 per cent of the property’s value first, and raising them to 80 per cent later.

The move is helping property upgraders save time and money as they navigate tricky timelines created by new property financing rules first introduced last August.

To recap, the rules stipulate that home owners with an existing home loan can obtain only 70 per cent financing for a second home they wish to buy. The limit was reduced further to 60 per cent this month. The usual loan limit is 80 per cent.

This makes it hard for home buyers, particularly those in the Housing Board market, who simply want to move from one property to another. They now have to prove they have sold their existing flat before qualifying for 80 per cent financing.

The problem is that the proof of sale is a letter of approval from the HDB, which is issued two weeks after what is known as the ‘first appointment’. This appointment, part of the HDB buying process, takes place six to eight weeks from when the deal is struck.

What this means is that an HDB upgrader or downgrader would have to sell his unit first and wait about two months before he can get 80 per cent financing from a bank for his next home. Otherwise, he will get only 60 per cent.

Logistically, he will also have to move out of his existing flat way before he can move into his new one.

This has translated to hundreds of property buyers moving to an interim location. Some even ask for an extension of stay at their existing homes beyond the legal completion of the sale, which is technically illegal under HDB rules.

Most banks here say they are prepared to grant these buyers 60 per cent financing on a new home, and then restructuring the loan to 80 per cent financing when the buyer proves he has sold his home.

HSBC personal financing services head Greg Zeeman said: ‘We are flexible about reviewing loan quantums, as we understand customers sometimes need more time to sell their existing property or decide on the proportion of loan and CPF savings used to finance their new property.’

This is a radical departure from past practice. Previously, once the letter of offer from a bank was accepted by a borrower, the terms could not be changed, said Dennis Wee Group director Chris Koh.

United Overseas Bank (UOB) loans division head Chia Siew Cheng said UOB also offers this flexibility, but added that it also takes into account ‘current market regulations and guidelines, customers with good credit records, stable income and the ability to service the loan’.

Private property owners who are buying and selling their homes in back-to-back transactions also potentially benefit from this increased flexibility. But the problem is less acute for them because in the private property market, home sellers can stipulate a longer period of time for a sale to be completed.

The stamp duty certificate – the proof needed for 80 per cent financing for private property – is also obtained earlier in the sale process.

One home owner looking to move is housewife Koh Lay Hua, 55, who cheered the new flexibility offered by banks. ‘I’m glad some banks are allowing this… I definitely would have to sell my flat to pay for the next one.’

Source: Straits Times (subscribers only)

Such applications, which are considered on a case-by-case basis, are small in number, the HDB added.

It had recently clarified that siblings can apply to buy HDB resale flats if their parents live overseas and do not already own a public flat. They could be citizens or PRs.

It made these points in response to queries from The Straits Times, following recent concerns that surfaced in online forums, where users noted that unmarried PR siblings above the age of 21 were allowed to buy HDB resale flats, whereas Singapore citizen siblings could not.

Some had asked why there was a difference in the rules.

Under the current rules, unmarried Singapore citizens can buy HDB resale flats only if they are above the age of 35 under the Single Singapore Citizen Scheme, or with their siblings if their parents are dead under the Orphans Scheme.

The HDB has since clarified that citizen siblings can apply to buy resale flats and that all such applications will be considered on a case-by-case basis.

It reiterated yesterday that one of the key principles regarding public housing ownership is that ‘each family can own only one flat at a time’.

‘This is applicable to Singaporeans and PRs. Therefore, applications from unmarried siblings whose parents reside overseas are considered on a case-by-case basis,’ it said.

‘Their parents must not already and cannot subsequently own another HDB flat concurrently.

‘We have been very stringent in assessing such applications. The numbers granted so far are small,’ the HDB pointed out.

It added that it will be reviewing the scheme ‘as part of our ongoing policy reviews’.

The competition for public housing between citizens and PRs, with flat prices hitting historic highs, has caused some unhappiness among the population.

The HDB had addressed some of these concerns in March last year when it made a bigger distinction between benefits for citizens and PRs, including setting new quotas on PR ownership of flats in specific blocks and neighbourhoods and giving less in the way of subsidies.

But even after the recent clarification, people such as Mr Leong Sze Hian, who wrote to The Straits Times Forum page, noted that the public was ‘largely unaware’ of the scheme.

He said he felt it hard to agree that the HDB’s rules treat citizen and PR siblings similarly.

‘It is almost a given that the parents of most PR siblings would be overseas and do not already own an HDB flat, whereas much fewer parents of citizen siblings would be abroad and do not own an HDB flat,’ he said.

Source: Straits Times (subscribers only)