Ministry of National Development Board (MND) had recently announced that they will be starting to reduce the supply for BTO as the supply is close to meet the demand for BTO. From the figures shows that 1st time applicant for BTO has drop to less than 2 times which is far fetch from the earlier figures of more than 10 times a few years ago.

This have clearly shown that all these years there had been strong demand in the market for BTO. It took almost 3 years of ramping up the supply to just clear the backlog and the wait for the collection of keys are even longer. Let’s hope regular review of the supply of BTO is not resisted to past bad experience.

With more 2nd timers opting to buy BTO (Minister commit to try to satisfy them as much possible) instead of just upgrading by buying a resale unit, hence where is the resale market heading towards?

With record numbers of BTO and balance units being introduced recently, most Singaporean would opt to try their luck in BTO or balance units. The motivation behind could be that most would like to move to a newer units as their had brought a resale units and it would give a better value after its minimum occupational period (MOP). And it becomes very attractive when the location release is very good, such as near MRT or famous schools.

If most Singaporean were to buy BTO, then who would be buying the resale HDB units? The Permanent Residence (PR), since they can’t buy BTO? This isn’t totally true, with the recent change in regulation any PR must have receive this status for 3 years before they can buy a HDB unit. Not forgetting the block ethnic group quota and 5% additional buyer’s stamp duties (ABSD) that they have to pay for the 1st property. In a way, PR are being discouraged from buying even their 1st property here with the cooling measure in place.

How many buyers are left in the resale market?
Figures shows that the cash over valuation (COV) has dropped to $12k by Singapore Real Estate Exchange and Straits Times reported on 2nd Dec 2013 that there are 105 units sold below valuation in October. Which means that many sellers are willing to compromise their prices just to dispose their unit. In short, the market is moving towards a buyers market. It is no longer surprising to see units asking to be sold at valuation as compared to a year ago.

If you have been selling your unit for a long period of time, it is time to consider a more realistic selling price before more regulation kicks in and affect your chance of getting a better price. The revised Total Debt Servicing Ratio (TDSR) and Mortgage Servicing Ratio (MSR) has greatly affected the loan buyers can take, hence the choice of units is reduced. Many units with high valuation are now no longer affordable to the mass.

Fast forward, with the BTO ‘flooding’ the market to stabilise the housing needs; seller no longer able to ask for sky high prices. It is good for buyers who wish to buy with lower cash outlay but but for seller who wish to get a handsome sum of money from the sales proceed have to rethink. Having said that, don’t forget that the selling price had went up more than 100% in the last 10 years.

Is our public housing is well affordable as being labeled? I think it is far from the vision HDB had set for itself. Things had changed over the years, to create a affordable housing for every Singapore to pay till you retire. Public housing price shouldn’t have inflated in the way of private housing does. Having to pay for more than half a million for a BTO regardless of the location is not that sensible. Public housing should’t be comparing prices with private and the pricing shall have some sort of regulation.

Looking forward to a day that public housing is affordable to all and a average Singaporean don’t have to pay more than 10 times their annual income.