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Thread: Buyers home in on larger flats in mature towns

  1. #1
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    Default Buyers home in on larger flats in mature towns

    http://www.straitstimes.com/archive/...towns-20130205

    Buyers home in on larger flats in mature towns

    Such units in Ang Mo Kio, Tampines prove popular at latest BTO launch

    Published on Feb 05, 2013

    By Daryl Chin


    LARGER flats in mature estates have once again drawn the most interest in the latest Build-To-Order (BTO) exercise, a trend that is likely to continue along with the promise of rising resale values.

    When the most recent exercise closed last night, there were 12 applicants for every five-room flat on offer in Ang Mo Kio and six for every four-room unit there.

    In Tampines, each four-room flat drew about seven bids.

    With the Government's promise to keep prices of new flats affordable, bigger units offer top prospects for price appreciation amid rising resale prices, analysts noted.

    "Large flats in mature towns always command a premium due to their scarcity in a built-up area," said PropNex chief executive Mohamed Ismail. "At the end of the minimum occupancy period, they will also hold much more value than comparable flats in outlying areas."

    Last week, National Development Minister Khaw Boon Wan made it clear that he had delinked prices of new flats from that of resale units to keep them affordable for first-time buyers.

    He had implemented the change since taking over the housing portfolio 18 months ago, and would continue to do so, so long as "property remains hot".

    For instance, prices of four-room units in Tampines start from $293,000 in the latest exercise, similar to last September's BTO rollout where prices started from $305,000. Prices for resale counterparts in the area range from $440,000 to $481,000, according to the Housing Board's website.

    HDB resale flat prices have been climbing steadily after a slight dip in 2009 due to the financial crisis.

    Coupled with higher cash premiums, this will help drive some demand back to the new flats, said SLP International research head Nicholas Mak.

    The overall application rate for the first exercise of the year, which offered 3,346 flats in six towns, is 3.5. The overall rates for the past three years, from 2010 to last year, had been 5.7, 3.8 and 2.9 respectively.

    "Strong demand this time round was also due to the fact that half the flats launched were in mature estates," Mr Mak noted.

    Dennis Wee Group spokesman Lee Sze Teck said another factor could be the implementation of a priority scheme for married couples with children younger than 16, although the application rate for this group was not made known.

    Now, 30 per cent of the BTO-flat supply is reserved for them.

    In the past, they had to vie with other first-timers, including engaged couples.

    Among the non-mature towns, Choa Chu Kang emerged as the poorest performer due to its location, while Hougang attracted the most bids as it was considered developed by many buyers.

    Those who have yet to apply for a flat said they are assured that there is a strong supply in the pipeline.

    Mr James Choi, 26, plans to wait for about a year to see if resale flat prices drop before he goes for a new unit. He feels he can afford to take his time, given the stable BTO flat costs.

    "If all else fails, I'll go for a flat in a non-mature town and hope that there will be enough amenities by the time it is built," said the accountant.

    HDB has promised to launch at least 23,000 flats this year.

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    1) always good to cater for more space as the family nucleas can expand very quickly for young families.

    2) so much taxes to pay upgrading, best to buy one big big one and squat there long long.

    big is good...

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    Is bto really unaffordable or too affordable?

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    Quote Originally Posted by Rosy
    Is bto really unaffordable or too affordable?
    they just want to catch the boat before it becomes too unaffordable.

    now maybe stretch somewhat can get, next time stretch also cannot get.

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    Most of them hoping to get the biggest unit to make a killing after MOP?

    Options to monetize by renting out rooms during MOP period too.

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    Quote Originally Posted by Rosy
    Most of them hoping to get the biggest unit to make a killing after MOP?

    Options to monetize by renting out rooms during MOP period too.
    actually, the best ROE, and at times ROA, is 4 room flat. 5 room is good living space that's all. rental yield is also lower for 5 room flat.

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    Quote Originally Posted by kane
    actually, the best ROE, and at times ROA, is 4 room flat. 5 room is good living space that's all. rental yield is also lower for 5 room flat.
    5rm flat commands the highest COV and highest profit quantum after MOP. First timers are not stupid. They have only one chance.

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    Quote Originally Posted by Rosy
    5rm flat commands the highest COV and highest profit quantum after MOP. First timers are not stupid. They have only one chance.
    ah, so the market has finally woken up to the fact that size matters?

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    Quote Originally Posted by kane
    ah, so the market has finally woken up to the fact that size matters?
    Only happening for hdb now. Big CCR unit will regain once ltv increase to 80/90%

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    Quote Originally Posted by Rosy
    Only happening for hdb now. Big CCR unit will regain once ltv increase to 80/90%
    i await that day with eagerness. we are so so far from those 80% LTV days. I don't even think we need to get to 90%, that's just to speculative.

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    Quote Originally Posted by kane
    i await that day with eagerness. we are so so far from those 80% LTV days. I don't even think we need to get to 90%, that's just to speculative.
    I am afraid it will only happen after a recession.

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    Quote Originally Posted by Rosy
    I am afraid it will only happen after a recession.
    it may not come so soon...

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    Quote Originally Posted by kane
    it may not come so soon...
    I do not see it coming this year. I am very positive on the stock market. Waiting to buy in after current correction.

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    Good for you and good luck.

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    Quote Originally Posted by kane
    Good for you and good luck.
    Same to u.

    Cheers.

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