Home buyers taking wait-and-see approach with latest changes to public housing classification
Some sellers might leverage the new classification and term their own property as a “Plus” flat in order to charge a premium, said one property analyst.
An MRT train against a backdrop of HDB blocks. (File photo: CNA/Jeremy Long)
SINGAPORE: Some home buyers are taking a wait-and-see approach before getting a flat off the resale market, after a new public housing framework was announced to ensure homes remain affordable and accessible for all.
The new classification system, announced by Prime Minister Lee Hsien Loong at the National Day Rally on Sunday (Aug 20), will replace the decades-old labels of mature and non-mature estates.
From the second half of next year, Build-to-Order (BTO) projects will be classed Standard, Plus or Prime, with different resale conditions attached to each housing type. The categories will not apply to existing flats or flat owners, or to flats that have already been booked.
BUYERS, SELLERS MONITORING HOME PRICES
Newlyweds Marcus Lim and Tris Marlis are waiting to see how the upcoming changes will affect their home-buying plans.
They have been looking for a resale flat for the past three months, and are hoping to get a place that is more central, near their workplaces and close to their parents. Their budget is below S$1 million.
“We are not sure if prices will start to rise or drop, or if there is more demand,” said Mr Lim.
The couple have contacted their property agent to help them understand what the changes mean and narrow down their options. They will also be tracking the prices of the units that they are keen on before they make a purchase.
PM Lee had said that the new system will change the way the Housing and Development Board (HDB) sells flats. He added that there will be a good mix of projects to cater to different needs and budgets.
Analysts are mixed on the impact the move may have on the property market, with some saying both buyers and sellers may monitor developments before making any decision.
Professor Sing Tien Foo, provost's chair professor in the Department of Real Estate at the National University of Singapore Business School, said buyers could wait for the new Plus flats to come into the market next year.
The new Plus flats will be in choicer locations within each region, such as near MRT stations and town centres.
For sellers of resale flats in such locations, they may “face the pressures of not being able to command a higher price,” Prof Sing added.
“I think in a sense, this will help to stabilise the market, both in the resale market or for these Plus housing and also, on the other hand, to make sure that these people who are waiting for BTO are able to afford the housing prices at a reasonable price range.”
IMPACT ON THE RESALE MARKET
Some sellers, though, may leverage the new classification and term their own property as a Plus flat in order to charge a premium, said Ms Christine Sun, senior vice president of research and analytics at OrangeTee & Tie.
“However, I suspect that there will not be a major impact on the resale market or resale prices right now,” she added.
“Because these flats by virtue of their location - they could be like nearer town centres, schools, shopping malls or near MRT stations - they already command a higher price premium when compared to standard flats under the old model.”
Ms Sun said there might also be a short-term surge in demand for properties in other markets.
Some may turn to the resale market or buy older condominiums if they do not want to be subjected to the 10-year minimum occupation period in Plus and Prime locations.
Dr Lee Nai Jia, head of real estate intelligence at PropertyGuru, said HDB flats in the choicer locations, especially those close to MRT stations, always fetch a premium.
“With this new classification, we should see these flats which are in the choicer locations to appreciate at a slower pace,” he told CNA’s Asia First on Monday.
“Now, we have seen before the likes of Duxton and other very prime locations, the prices actually went up very significantly and that could actually drive up the overall market sentiments.
“And so we see that with this new classification, the growth will not be so fast and I think future generations will also benefit from it.”
