Few weeks back, I read in news that the price of HDB flats were softening. On 15 July, in PropertyGuru.com.sg, it has been reported that the Ministry of National Development (MND) of Singapore will be reducing the supply of HDB flats this year. From 24,300 originally planned, it will be reduced to just 22,400 units. For the larger units, which are typically for families, it will be only be 16,700 units, down from the planned 18,600 units. This is still sufficient as the estimation is that there are 15,000 new Singapore family formations every year. Even the backlog applications are being cleared up. In other words, if you apply and there’s a unit, there’s really no competition. First timer application is now only between 1.0 and 1.7.
Do you know the significance of this pieces of news about Singapore’s HDB flats? The significance is in the numbers. They know every number they want to know and they can plan every detail. It is so easy to understand why certain policies are put in place. If you are living in Singapore and trying to qualify for a HDB flat, this is a very good year for you. Just make sure you do not delay this decision but it is not always that the ratio is so favourable to you.
Then again, if demand and supply can be somehow controlled, then why has property prices been increasing in Singapore? Why has it increased to much compared to the world? It has even contributed to Singapore being ranked the most expensive city in the world! Truth is, property prices are never about policies even if it can affect it. Property prices is always about the demand versus supply. There are many more new units, true. However, there are not many additional units in AREAS that you WANT. So, you decided it must be that particular area, and when many decided the same, demand increases but supply is the same. Prices naturally go up and the highest bidder gets it.
Hope everyone understand that due to ‘location scarcity’, you either pay higher or you can choose to buy further, newer areas. Sure, it will be 10km away or additional 15 minutes. Sure, there are no huge malls there, YET. Sure, the community there are not the affluent type that you aspire to be. The prices are however, much lower. How about buying that unit, save up to buy another unit and the journey continues? Think about it. Please do not speculate, chances are you will be burnt because if governments with full statistics are unable to plan the actual prices, there’s no way you can.
written on 14 July 2014
Next suggested article: It’s the duration, not the distance. ok?