Prices of resale HDB flats may rise further as PR quota reached in several estates
March 17th, 2010 | 
Author: Written by Our Correspondent
The prices of resale HDB flats may rise further as the PR quota is reached in several estates. Under the new Singapore Permanent Resident (SPR) quota introduced lately, a cap of 8 percent is set for PR households in each block and 5 percent within each neighborhood to prevent ethnic enclaves from emerging in the HDB heartlands.
The HDB’s website showed that several HDB estates reached their PR quota such as Admiralty Drive and Canberra Road in Sembawang, Anchorvale Link in Sengkang, Choa Chu Kang Avenue 5, Bukit Batok East Avenue 3, Woodlands Avenue 6 and Jurong West Central 1.
However, the quota applies only to HDB flats owned by PRs and not those rented by them and as such it may not be able to tackle the problem it seeks to resolve in the first place.
For example, foreigners who live in rented flats are not covered under the new rule and so ethnic enclaves can still form though the PR quotas are kept.
Due to the PAP’s liberal immigration and pro-foreigner policies, foreigners now make up 36 percent of Singapore’s population, up from 14 percent in 1990. Of the remaining 64 percent who are citizens, an increasing number are born overseas.
There are now large number of foreigners living in certain parts of Singapore such as the mainland Chinese in Geylang, Indians in Seng Kang and Burmese in some precincts of Jurong.
In fact, Geylang has its own PRC restaurants, shops, KTVs and supermarkets that it resembles more like a county in China than Singapore itself.
PRs comprise about 14 per cent of the population in HDB flats, according to 2009 figures. National Development Minister Mah Bow Tan claimed that the number is too “small” to affect the prices of resale flats.
Property analysts warn that the quota system might cause an increase in prices unwittingly.
PropNex CEO Mohamed Ismail told the Straits Times “that PRs selling HDB flats in neighbourhoods or blocks that have reached their quota will be able to quote a higher price when selling to other PRs.”
“Assuming PRs can afford it, they might be willing to pay for a flat that might be nearer to good schools or the MRT, or to get a good view. But if the quota is reached they won’t be able to buy unless they offer a higher price,” he added.
Some PRs are flushed with cash and have no qualms paying an above market price for flats in prime estates. An Indonesian PR paid $653,000 for a a 4-room resale flat in Queenstown last year though he could well afford a condominium.
Though HDB flats are supposedly public housing, foreigners (PRs) are allowed to purchase resale flats in the open market without any minimum period of residency in Singapore.
They can also sell their flats for a hefty profit years later should they decide to leave Singapore and return to their homelands.
Despite rising concerns, worries and fears on the ground that HDB flats are getting more and more expensive, Mr Mah continues to insist that HDB flats remain “affordable” to the majority of Singaporeans.
In an interview with CNA’s Talking Point last Sunday, Mr Mah reportedly said that HDB does not want flat prices to come down in the future.
The prices of HDB flats have sky-rocketed in recent years with that of resale flats growing by a record 8.2 percent in 2009 while median COVs doubled from $12,000 to $24,000 during the last quarter alone. Yet the salaries of Singaporeans have declined by 3.2 percent during the same period of time.
With no opposition in Parliament to hold Mr Mah accountable to his words or actions and no credible alternative to replace him, young Singaporeans wanting to start a family of their own will have no choice but to either “slug it out” with the PRs in the resale market, wait a few years for BTO flats in far-flung places or continue staying with their parents till they inherit their flats.
Related articles:
>> Mah Bow Tan: We do not want flat prices to go down
>> Taiwanese PR offers $50k COV for resale flat
>> Mah Bow Tan: PRs have minimal impact on resale flat prices
>> No empirical evidence to suggest that public housing is affordable in Singapore
>> When will Singapore’s property bubble burst?
>> Why HDB is unable to reveal break down costs of new flats now
>> HDB to consider introducing rules to curb property speculation
>> HDB blames Singaporeans for not selecting flats when given the chance
>> Singaporeans worried about retirement after depleting CPF to pay for over-priced HDB flats
>> Mah Bow Tan acknowledged that rising HDB flat prices has sparked “fresh concerns”
>> PM Lee: Govt does not have control over prices of resale flats”
>> COVs of resale flats shooting through the roof
>> HDB resale price index hit record high in 2009
>> Singaporean wants PRs to live in rented flats instead of buying resale flats
>> Singaporeans wants PRs to be banned from selling HDB flats at a profit
>> Shanmugam: Singaporeans likely culprits for driving up HDB flat prices
>> Mah Bow Tan: HDB flats remain affordable
>> Means testing for PRs to buy resale flats
>> Immigration and public housing: should the govt or people plan ahead?
>> Grace Fu: hard to predict demand for housing
>> Indonesian PR bought 4-room flat at $653,000
>> Mah Bow Tan asks home buyers to be realistic
>> PAP MP blames young couples who cannot get a flat for not planning ahead
>> Home affordability: HDB versus the public
>> Demand vs supply: so many applicants, so few flats
>> Number of applicants exceed number of flats
>> HDB to increase supply of flats
>> Mah: don’t compare with prices in the past
>> ERA: 40 per cent of HDB flat buyers are PRs
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non-malaysian PRs are a higher lifeform than malaysian PRs. unlike malaysian PRs, or singapore citizens if you insist, non-malaysian PRs once securing a flat in a precint that has hit quota, has got in his hands a valuable and unique prize. this is the ability to sell to anyone, including the newcomer foreigners, for a high price. malaysisan PRs can’t do that because the quota is hit. singaporeans, well, you know singaporeans can’t do anything in the first place.
let us gather together non-malaysian PRs and discuss how best to raise the COV of such unique flats in these unique precints. there are large networks of real estate agents out there who can figure out a scheme for you to market this prize and raise the COV to appropriately reflect the true nature of your New Unique Gift From Latest Government Rule Windfall.
singaporeans, if you want a windfall, please be mindful of your next mandate.
i use to stand on the other side until i got my flat.. now, i just hope house prices dun crash.. stay high and let me earn some money in 5 years before i move out of sg and go somewhere with a more acceptable cost of living..
Quota should make price drop since you can’t sell to cash rich PRs once it is reached. Even if they have money, they can’t buy.
Just get rid of the whole “Monkey Bunch” of Papes clowns.
@devil,
That was my initial thinking as well… as well as my current thinking.
The opposite is true for places whose quota haven’t been reach though. I am just wondering if HDB redraws lines on neighbourhoods, like the election committee who redraws GRC boundaries.
Sorry for my ignorance.
Don’t they need loans? Won’t it be a bit*h for them to pay the loan for such huge amount?
Or is it that only Singaporeans are so poor that they have to pay with CPF and loans?
6.5M people, remember this number.
We are at around 5M now, Gahmen has clearly stated that they have not changed their goal to reach 6.5M, what they have said is that they will slow down the pace of increase for the moment (until after the elections?).
Bottomline with every single person increase there will be a corresponding increase in demand for housing be it rental, HDB, private etc.
Therefore it will not be reasonable to expect housing price trends to be coming down until the influx has plateaued and the market has reached an equilibrium. No magic just common sense.
@devil on Wed, 17th Mar 2010 1:14 pm
Quota should make price drop since you can’t sell to cash rich PRs once it is reached. Even if they have money, they can’t buy.
I don’t think the quota will make the price drop. The quota only serves to limit the circle of buyers that is available to the seller. Ultimately, it all comes down to how much the seller is looking for and whether there is a willing buyer to pay that asking price. If I wanna sell my HDB for $x, having a quota just means that I can potentially only sell it to 64% of the population. The quota doesn’t stop me from asking for $x it.
So, on the surface it looks like the quota will “control” things, but in reality, I don’t think it would.
Mr Mah I would like u to resolve this issue and make Singaporeans your priority and give them the joy of owning a flat, a shelter and home to come back to. Every Singaporean matters, remember?
The secret is to be creative. Think out of the box. There is surely a solution. Every problem comes with a solution.
If I can help I would gladly do so. But how can Singaporeans help to make it better for ourselves? But please do not give me another bitter pill.
You sinkies are just too pathetic. So what got PR quota? Who keeps track of the statistics? Is it open to public? Govt just stroking your cocks to make you people blur. Standard pre-election tactics. Every politician does that all over the world. And yes, me and my PR friends are all earning good pay, more than $10K monthly salary. We target good locations like toa payoh, bishan, clementi, jurong east, kallang, simei, tampines to buy HDB flats. Why HDB and not condo? Easy … because the rental yield much higher. I buy 4-rm in toa payoh and rent out the extra bedrooms to fellow PRs and foreigners. The rental already cover the mortgage. The interest rate so low, only 1.6%, it’s a no-brainer. Somemore, I save money by not buying a $1.5M condo — the extra savings I bought 2 houses in my home country and renting out as well. Why rent when your govt makes it so easy for me to buy hdb and use room rental to cover mortgage?
Even if worse-case scenario of economic depression, property price crash, or interest rates shoot up, we already make plans to abandon the hdb flats and just take 1-way plane journey out of singapore. Most of our savings from salaries not kept in singapore banks anyway — every month I transfer back to my country’s banks. You see, you sinkies are so pathetic to treat hdb flat like gold — it is just concrete and bricks. We PRs are smart and methodical, money making machines. We recognise opportunities and trends, and ride the profits for all it is worth. When time comes to cut, we just cut and let go. We cover all our bases first.
They should then publish PR transaction prices separate from Citizens and show the difference.
We are at around 5M now, Gahmen has clearly stated that they have not changed their goal to reach 6.5M, what they have said is that they will slow down the pace of increase for the moment (until after the elections?).
6.5M is 30% more.
30% more HDB flats = 300,000
12,000 flats a year = 25 years to reach there
that is, provided they build 12,000 flats a year.
you think they’ll do it, over the next 25 years? heh.
Talk so much also no use, PAP won’t listen or understand.
Action speaks louder than words. Vote them out.
We don’t need anymore reason to vote them out. PAP sold out Singapore and betrayed the people that supported them.
I like your posting Rich PR. Way to go. Be mercenary and opportunistic.
Rich PR on Wed, 17th Mar 2010 2:24 pm “We PRs are smart and methodical, money making machines.”
PaRasites employ numerous strategies for getting from one host to another, a process sometimes referred to as parasite transmission or colonization.
SINGAPORE IS OVERCROWDED
35.80% of Singapore Total Population are now Foreigners: 1,786,900 Foreigners ( PRs: 533,200 + Others: 1,253,700 )
1960s mistake of “stopping at two” — but this time in reverse.
valuation agency and pubic HDB rental rate push up the HDB price which in turns depend on sustainable singapore economy. Rental rate is the ROI on property and proportional to the price of the property. By pushing up 3rm HDB rental from 1000 to 1400 is like pushing up the property worth by 40% assuming the same ROI rate.
The new rules cannot help anything as it is like an offer of orange and apple when indeed you need water.
The HDB price will drop only if the valuation formulate with lowest 50% citizen income and this inhibits further income gap. This forms a healthy cycle for GDP growth and returns the wealth generation to the citizen by sustainable increase in personal income. This will lower rental rates which in turns inhibit the foreign investor who pose themselves as PR.
If Singapore government insists to the increase country wealth as a whole by continue rising HDB price, old HDB can be demolished and converted to private residential development like condo or landed house which in turns could be own by rich easily because their wealth basically can buy over every HDB. To ensure this is sustainable, the stamp duty must be increased and higher grants for citizen. The grants to property ration was like 25% 2 years ago. By keeping the same ratio assuming Queenstown HDB 600k, the grant should be 150k for resale market.
If the price continue to rise, we can assure that the new PR are not the usual working class anymore but a new form of immigrants with enough cash to afford/repay loan and could be richer than those living in private area like orchard road. Existing Singapore citizen could enjoy this wealth through government subsidy. This multiplier effect will support a stronger currency further and attract even more foreigner investment.
Mah BT dont want flat price to go down .
You know why , if go down how to take back GIC and Termasek
losses .
So Singaporean 4get about retiring with CPF .
Need to work until 70 . Hehehe .
FT will take over your flats , your work and your life .
Thanks for building the infrastructure for FT to enjoy.
For you work lar…
It is bloody clear who is driving up the prices of HDB. Just stop PR from buying HDB, we will see stable HDB prices and future children will be able to have their home and get married.
@Rich PR
Good for you. Pray hard PAP still in power after election.
Rules will change.
1) PR owner can only sell their flat to Singaporean.
2) PR owner not allow to rent out room.
If you feel its unfair – take up citizenship then. I welcome you with open hand.
RichPR is an idiot. Clearly he has peaked in his life n career. And so resorting to cheap tricks to earn money like renting a couple of rooms here n there. Clearly shows has no talent to rise high in life. Most Singaporeans try the same cheap tricks to make money. I am sick of MEDIOCRE Singapore population. Greedy Materialistic Bastards.
We have vote more of the opposition in.
The PAP will only continue to gloat and do what they wish if they see that they have not lost any seats to the opposition.
In addition, as more of the Opposition gets elected into parliament, then perhaps more Singaporeans will be willing to join existing Oppositions or form their own parties.
The PAP needs to be informed that their own complacency will not be rewarded. They work for us, the people.
Not the other way round.
@X2
If we assume that there is a disproportional higher number of PRs with higher of cash flow compared to citizens, and the quota is hit, that means the seller can ask for the same high price but there will be lesser people that can afford it.
Also with quota, PR might think twice about putting money into resale HDB — they might not be able to sell as easily later.
Maybe should check with the Malay and Indian citizens how quota has affected them. I think the minority groups’ households experience its effects more.
yet another reason to be PR forever. i’m sure you citizens wish you could convert to PR, but sorry, not so easy.
it’s amazing how PRs are getting more and more privileges. I suppose that’s how they want to encourange foreigners to take up PR-ship. this latest special ability to sell their HDB flat in such a special manner is the best gift of all. bye bye $30k $50k COV, this alone can command yet another leap.
tip: singaporeans can try signing up with a nearby similarly desperate country and give up citizenship, then try to come back pretend nothing is wrong and apply for PR.
Mah BT …(MAN OF BARBARIC TALENTS) dont want flat price to go down .
You know why , if go down how to take back GIC and Termasek
losses .
So Singaporean 4get about retiring with CPF .
Need to work until 70
DROP DEAD OR PAY AND PAY
FT will take over your flats , your work and your life WITH NO MEANING ….PITY THE NEW GENERATION……
HA..HA …HA HA
ATTENTION TO MAH BOW TAN (MAN OF BARBARIC TALENTS)
DID YOU TRY TO MAKE A EFFORT TO HELP THE FAMILY IN CASHEW ROAD
BUKIT PANJANG
AFTER MANY A APPEAL
MIW has betrayed all of you who got them in. Now everyone is a sucker being double crossed. Let’s see if we commit the same mistake again.
Then again, many Singaporeans don’t know that they are rooting for themselves a second class citizenship.
Ask yourself this, where in the world is a country where PRs have more benefits than it’s Citizens?
Unfortunately years of MIW brainwashing would mean there’re still lots of supporters who are blind since birth.
Have you given your friends, relatives and family the valuable gift of sight?
i don’t see how the quota will lead to a price rise of ALL HDB flats in a filled block. after all, PRs can only buy from other PRs in such filled blocks, which means only 8% of the flats will be in great demand. and that benefits and affects only PRs; Singaporeans need not worry.
“SingaNigaMinga on Wed, 17th Mar 2010 3:59 pm
RichPR is an idiot. Clearly he has peaked in his life n career. And so resorting to cheap tricks to earn money like renting a couple of rooms here n there. Clearly shows has no talent to rise high in life. Most Singaporeans try the same cheap tricks to make money. I am sick of MEDIOCRE Singapore population. Greedy Materialistic Bastards.”
You are example of pathetic sinkie. Cannot make it so resort to using vulgarity. You think I care so much for your sinkie property or HDB flat? My room rentals is paying the mortgage for me, it’s like I’m staying here for free. Most of my $12+K salary is vired overseas monthly. I can up & go anytime I like. You think if the worse happens and I cannot make a profit from selling the stupid flat, I will slowly repay the bank like a dick-less sinkie? I will just disappear from this hopeless city that you think is a country. Stupidpore is not the first place I screwed and won’t be the last. That’s why people like me with real talents are internationally mobile and can go anywhere in the world. Let your stupid local bank settle the outstanding mortgage — hey, maybe they can auction to you sinkies cheap huh? ha ha!
Mr Mah’s doublespeak and doubletalk is mind boggling lah. the fact that he has been spouting loads of rubbish (to me, ti sounds like that lah)lately suffices to (or for one to) assume that everything in terms of costs, availability (???) of so-called subsidized units has gone awry and an intractably big mess.
Understand this lah – the incumbent govt can make all kinds of claims via press releases to statistics to … the question is how credible are they? Who verifies it? Who accounts for it?
Who assumes responsiblity for it? Eg, for starters, can anyone or does anyone outside of the establishment know the actual cost of a unit and if the much-taunted subsidies are really true? Man, one is left guessing and wondering lah!
It is a pity that it has come to such a stage and hopefully intelligence will prevail at the polling booth!
Otherwise, it is going to be the same runaround, the same refrain.
This problem is not cause by the PRs. They are just like anyone else taking advantage of the loop holes.
PAP has lost their helicopter vision by letting PR to buy HDB flat which is solely meant to be public housing for the citizens.
The way to solve the problem is to VOTE OUT PAP so that rules can be corrected to a more realistic one. Don’t expect PAP regime to correct themselves when had lost so much of tax payer money until their vision is clouted.
New citizens don’t be happy your time will come to get screwed like us too.
May I suggest PR can buy HDB flat but with conditions :
1) they must take up citizenship within a stipulated time frame say 3 years.
2) can only sell their flat to Singaporean (just in case they do NOT wish to take citizenship)
3) cannot rent out until they become citizen HDB must do periodic check to ensure compliance.
4) must have notary proof of residential address with witness from their respective countries (even if they default and run away at least still have some lead)
People you are welcome to add more but please be realistic. That’s all for my ranting.
We have to deny PAP 2/3 majority to prevent an over-inflated political party who thinks that Singapore belongs to them !!! PAP is just a political party like SDP, WP, SDA, etc and is not above anyone. If they are not performing to our expectation, vote them out and replace them with someone who can do a better job. Don’t believe PAP is indepensable because this does not exist in history, present and future.
//MBTFO
yes, the pigs are very expensive to maintain.
@MeeSiamWhereGotHumStupid on Wed, 17th Mar 2010 6:48 pm
You are correct, yes the population increase and the slow pace of new flat releases are only the consequence.
The root cause is really the Goons we have voted in power who are making narrow minded self centered decisions.
The Goons have definitely lost their vision, we are doomed with them in charge unless we really and truly wake them up or boot them out.
Just think about this were else on this earth can a PM who needs two DPMs, a SM and MM to cover his back when all of them are paid multi millions a year.
And how many people in Singapore eat MeeSiam with Hum?
online citizen
Sg are you sure you own your flat or just leased from HDB. Are you daft not to know you only lease. In Australia, you can but a house in Brisbane (eg) for 440k , freehold, land size 900sqm ,, with swimming pool and is double storey.
DAFT DAFT
All our past campaigns on littering, courtesy, graciousness etc has gone down the drain. Shameful.
Mr. Mah
PR who has not live and pay tax in Singpaore for more then 5 or 10 yrs cannot buy HDB flat?
Listen to you people! Blood is thicker than water
Think out of the box!
Just a few suggestion
1) Extend period of re-selling HDB for PR?
2) All profit make to be tax heavily?
3) Limit profit to be taken out of Singapore?
4) Limit the amount of time PR could sell / Buy HDB flat?
5) Those PR who has previously or currently own private housing are not allow to purchase HDB unless they can proof of hardship (i.e. cannot afford private housing, etc.? Prevent PR to flip flop between private and HDB flat market speculation.
6) Only PR who permanently (say 9 months out of a yr) live in Singapore are allow to buy HDB flat?
7) Only PR who work and pay tax in Singapore can buy HDB flat?
etc.
NOTE: Having quota to prevent enclaves is a good thing but it is limiting supply and the value will go up! Supply and demand at work!
Mr Mah
Yes, you and our goverment CAN DO it! Once again ==> LISTEN TO YOUR PEOPLE!
You are there for a reason and that is to represent we, the Singaporean and it is your job to look into our interest.
Oh One more suggestion for Mr. Mah
This is for the “RICH PR”
1) PR owner of HDB flat are not allow to rent any rooms out!
Anyone out there who can make sure Mr. Mah / goverment see these comment and suggestion? Thank you very much!