Priced for the market

Source : Today - 19 Dec 2008

Increased supply of flats in Yishun a response to demand, says HDB

BUOYED by demand for its previous Build To Order flats (BTO), the Housing and Development Board (HDB) announced yesterday the launch of its latest BTO project - Dew Spring@Yishun.

“The previous BTO launch in Yishun - Jade Spring Phase One and Two was five times subscribed, and therefore, we feel that there could be demand for flats in Yishun, which is why we’re putting out this contract,” said the Board’s deputy chief executive Tan Poh Hong.

A total of 864 standard flats will be built, comprising 144 two-room, 216 three-room and 504 four-room units, with Dew Spring@Yishun having the largest number of two- and three-room flats - 170 more than Senja Green, a BTO project launched in August.

Located at the junction of Yishun Ring Road and Yishun Street 41, prices for the two-room units start at $76,000, the three-room flats at $120,000 and four-roomers at $197,000.

With the latest release, the Board has launched a total of 833 units of two- and three-room flats, and there are plans to offer another 280 similar units soon.

In all, the HDB plans to offer 4,000 smaller flats over the next two years.

When it was pointed out that 90 per cent of BTO flats are reserved for first timers and that the remaining 10 per cent may not be sufficient to meet the demand of downgraders forced to monetise their flats during bad economic times, Ms Tan assured: “If there is a need for more, we will build more.”

This is in line with National Development Minister Mah Bow Tan’s statement to Parliament last month that lower-income families and those who need to downgrade could look forward to a steady supply of smaller flats.

Property firm, PropNex’s chief executive Mohamad Ismail called HDB’s launch of the smaller units “timely” amidst the current economic uncertainty.

“These flats are priced very attractively,” he said. “The smaller units are actually going at below $200 per square foot, which is very much below the median resale prices for that area in the last quarter.”

As the units are situated not far from the Orchid Country Club and the Sungei Seletar Reservoir, Mr Ismail expects an over-subscription for these units. He also commended HDB for reaching out to the lower-income bracket with more affordable units.

In pricing the new flats, HDB said it considers several factors, such as prevailing market conditions and the resale prices of similar units in the vicinity, making adjustments for differences like location, amenities, design of the project, age and orientation.

It added that when comparing prices of flats it should be like-for-like.

Said Ms Tan: “It is not correct to compare a flat in Yishun and Sengkang, because they are two different towns, having different attributes. When we do comparisons, we use comparables within the same vicinity.”

She was responding to media reports which compared the prices of new BTO flats to resale flats, and to criticisms that new HDB flats were not affordable.

The Board also clarified that construction costs do not affect prices of HDB flats as HDB adopts a market-pricing approach which reflects the true value of flats - how much Singaporeans are willing to pay for such flats in the open market.

It also ensures the optimal use of public resources.

Said HDB’s acting deputy director of marketing and projects, Mr Ignatius Lourdesamy: “If it’s too high, there will be no demand for new flats. If it’s too low, it diminishes the market value of existing flats and we will be over-spending public funds on housing.”