The Straits Times
Wednesday, Oct 24, 2012
The Government's reiteration that it will not build new executive maisonettes will further boost the prices of such "limited edition" units, said analysts.
These large, two-storey flats have become highly sought-after in the last few years due to a growing price gap between Housing Board flats and private property, and a wave of collective sales that have thrown up cash-rich buyers looking for big spaces.
Some flats in neighbourhoods like Bishan have made headlines for fetching record prices. This year, four of the eight units that broke the $900,000 threshold were executive maisonettes.
HDB stopped building these homes, which range in size from 138 sq m to 243 sq m, in 1995. There are 65,000 executive flats altogether, of which executive maisonettes form one group.
The spotlight on the latter has led to renewed interest on the ground, said Pasir Ris-Punggol GRC MP Gan Thiam Poh. It led him to ask in Parliament if HDB would build them again.
The Ministry of National Development said last Tuesday that it would not, as executive condominiums, which become fully privatised after 10 years, provide a more diverse range of housing options for Singaporeans.
"If they don't build any more," said Mr Gan, "prices for this particular type of flat will keep rising."
Data from the Singapore Real Estate Exchange showed the segment's prices have indeed accelerated recently. Over the last 10 years, median prices of executive flats rose 46.3 per cent compared to 101.8 per cent overall.
But in the last four years, this segment has rapidly caught up. From 2008 until now, median prices of executive flats rose 35.6 per cent, close to the 39.7 per cent of the overall market. In the third quarter, maisonettes were pricier at $631,000, compared to executive apartments at $607,500.
This, noted Chesterton Suntec International research head Colin Tan, is "astonishing" as larger apartments generally lag behind in percentage rises because they start off at a much higher base.
Their scarcity will continue to boost prices, he said, predicting that executive maisonettes "will follow the path of HUDC units".
HUDC flats, roomy units which have the option to be privatised, regularly breach the $1 million mark.
Even with the spurt in prices, HDB executive flats are still a "value proposition" for buyers, given the rise of private property prices, said PropNex chief executive Mohamed Ismail.
The 17-year-old Queenstown flat that went for $1 million translated to $620 per sq ft, compared to about $1,200 psf that private properties and executive condominiums can command.
Some executive maisonettes in more remote locations like Choa Chu Kang or Yishun are still listed for under $400 psf.
Despite the possibility of runaway prices, many argue that the HDB is right to resist calls to build new executive maisonettes.
"HDB should concentrate on providing affordable housing for a lot of Singaporeans. Many buyers are young couples who are seeking to buy their very first flat so a four-room unit is enough for them," said Nee Soon GRC MP Lee Bee Wah.
Mr Ismail said with the shrinking family size, it does not make sense for HDB to build large flats to cater to buyers "who might not even have large families but are just able to afford the space".
For current owners, the limited stock works in their favour.
Mr Raymond Loke, 48, moved into his unit in Choa Chu Kang in 2000 and is now looking to sell it to buy an HDB shophouse.
"The price will keep going up since the Government has stopped building," said the duck rice seller. "But no matter what, it will still be cheaper than a condo so it can give young families a chance for luxury living."
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