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With the PAP securing 81 out of 87 seats in the recently concluded general elections, what does this mean for the property market?
Now, public housing affordability has been a key issue for this year’s elections.
Over at Tampines GRC, helmed by National Development Minister Mah Bow Tan, the opposition has been quick to point out that rising property prices have priced out young couples and singles.
Property prices have soared 70 percent since 2006.
While Minister Mah did win Tampines GRC, he secured it with a lower vote margin of 57.2 percent, compared to the elections in 2006.
This is a sign that some of the online angst had translated to fewer votes.
With the PAP having now secured the mandate, there is a possibility that the sandwiched class will get more help.
Minister Mah recently hinted that the income ceiling for new Build-to-Order (BTO) flats could be raised from the current $8,000 to $10,000 after the elections.
Impact on property prices
Should this policy be implemented, it could translate to higher property prices.
This is because there is currently strong pent-up demand for public housing due to the shortage of supply in the resale and BTO market.
Any increase in demand will push up property prices.
On the positive side, this will ease pressure from the private property market, making mass market condominiums more affordable, albeit still priced higher than HDB flats.
In addition, it is not likely to have any impact on the resale HDB market.
More help for singles please
While the proposed policy is aimed at middle-income young couples, there is no help for middle-income singles.
Singles who are above 35 years old can only buy resale HDB flats, which are far more expensive and come with cash-over-valuation (COV).
Taking into consideration the COV, deposit and renovation costs, buying a resale HDB flat could easily set singles back by at least $50,000 in cash.
On top of that, singles who are earning more than $3,000 are not eligible for HDB loans and the CPF housing grant of $11,000.
Qualifying for the grant and HDB loan will enable singles to easily buy their own homes, rather than depending on cash alone.
I believe there are singles that have fallen through the cracks and are not getting the help they deserve.
The government has said after it won the mandate that it aims to build a more inclusive society and improve the lives of Singaporeans.
Minister Mah, please prove us wrong.
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Reader Comments (14 comments)
Do revision of income ceiling upwards really benefit and help Singaporeans? In the past, the income ceiling of 3k can help a couple to buy a 3 room BTO flat, but this has been revised upwards to 5k. What does this mean? Those within the range of 3-5k can also buy 3 room BTO flat now. Pls read within the lines. Meaning that a 5k combined salary can only get you a 3 room flat. Do also note that the flat size has also declined and the loan repayment period has increased to 30 years. Does that mean that the Singaporean living standard has increased over the years? Likewise, its also the same if the income ceiling is being revised to 10k. This would also mean that having a combined 10k can only get you a HDB flat. If the idea is to help the sandwiched parties, it will be better to launch more DBSS and EC sites and price reasonably, than increase the income ceiling.
Some readers are asking why there is a political slant adopted in this article. This article features housing policy and its direct impact on prices; when we discuss policies, there is a political link that cannot be divorced. BG Yeo says politics should be the concern of every Singaporean, as it has an impact on their everyday lives. It should not be construed as manipulative and confined to only the politicians.
MBT is history. I'm looking forward to KBW and his two new MOS for better policy making. The appointment of 2 new MOS also shows that the govt is seriously looking at the property market. I would like to reemphasise this again. If people are complaining that the property prices are too high, and the govt is rolling out policies that will cause the property prices to go up, does it make sense?
e question is will the supply of properties meet the demand of target 6million population? by when again did e gov said it want to hit tis 6mil target?
Khalil is correct. Property prices and demand/supply are very much related to government policies. He was stating a observation on the GE results and its impact and not a judgment call.
"In addition, it is not likely to have any impact on the resale HDB market." This is a sweeping statement without due thought. As long as the BTO pricing mechanism doesnt change, it will always have a direct effect.
I read about huge supplies of both public housing and private mass market condos are projected to coming on stream in years 2013 - 2014. For the first time in many years, the rate of supply then will exceed the monthly average; hence, expected to dampen demand and prices. I hope we could see the demand pressure on our property market from foreigners easing off this year. Then, perhaps, the market prices could stabilise this year and then proceed to moderate to a more reasonable levels in the face of surplus supplies.
How can this site turn into another Temasek Review when its focus is not political? There are so many other articles about news and lifestyle here. This article is just the opinion of one of the property bloggers and a sound opinion it is, too. It's property related, so it IS relevant to the site.
I don't think Khalil is deliberately stirring the pot. He's right, policies do affect the market and we as citizens and taxpayers have a right to question matters of social and financial importance which includes housing. I applaud you Khalil for having an opinion and not being afraid to express it.
Agree with Gary Yeo. Please leave your political affiliations at the door unless you want Propertyguru to be another TemasekReview.
Have recently been back to Spore, having left it in 1997. Interesting to hear that people are making a killing selling HDB flats!! Since when "subsidized" housing could deliver returns up to 70% - which I hear is not uncommon in the lat 2 years. Resale markets of HDBs - does anyone know the stastics - what percetange of resale HDB buyers are non-Sporean (no punt intended)? And opposition being voted out so that the ruling party can begin upgrading estates - have not heard that one either.
If people are complaining that the property prices are too high, and the govt is rolling out policies that will cause the property prices to go up, does it make sense?
Political issues do have an impact on the property market via policies. And policies do have an impact on voters. They are not separate entities. Being a blog, we are all entitled to our own opinions.
You should stick to writing about the property market and leave the politics and criticism of policies out of this website.