THE 4-ROOM MATURED ESTATE SYNDROME

An ex-colleague recently lamented he failed to get a number in his 13th BTO attempt. I asked which estate he had applied for. Bidadari.

Having expressed my thoughts on Bidadari some posts earlier, I was familiar with the fervour in which potential applicants had favoured 4 and 5-rooms units there.

I asked why the decision to apply for a 4-room unit rather than a 3-room given there were no plans for children? The ex-colleague replied it was for the potential rental of the two additional bedrooms for income.

With the high number of applicants for the said 4 and 5-room units at Bidadari, I would say the chances of getting a queue number is small, but not impossible. 

For those who hankers after a 4 or 5-room unit in a matured estate, the wait can be long unless lady luck is smiling upon you. For those who need a flat for a small family of three or less, the 3-room units at Bidadari were expectedly less subscribed. 

Good luck in your future applications. Knowing where the betters odds lie will favour you.

HOW CAN A YOUNG COUPLE GET A UNIT AT BIDADARI BTO...AT A HIGHER CHANCE?

Now that everyone is gunning for the Bidadri BTO, how can you, as one half of a young couple ensure that you have a higher chance at getting a unit?

This checklist comes in handy:

1. Are you a 2nd-timer as a HDB home buyer?
2. Do you intend to have a child at all?
3. Do you intend to have a child within the next 5-10 years?
4. Do you intend to live with your parents/siblings/grandparents at Bidadari?
5. Do you intend to sell your unit when the Minimum Occupation Period is up?

If you had answered 'No' to all four questions, then you should right-size now to a 3-room. This enables you to have a higher chance of getting a better shot at a unit at Bidadari.

95% of 3-room units at a Mature estate BTO are allocated to 1st timers. That's you. And that's the reason why there is currently 10 units for every 6 applicants in the current BTO exercise as of now.

Judging from history, the application numbers for 3-roomers may go up a bit at the end of the close of applications, but it sure beats the low chances of the 4 and 5-room applicants.

I half-suspect the higher pricing of the overall Bidadari exercise is turning off some people too.

So, there you have it. Right-size and stand a higher chance. You have less than 24 hours.

Good luck.

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WRONG MOVE #1: BUYING A HDB FLAT EARLY IN YOUR CAREER

By some chance and/or sorcery, I did not date, marry and buy a HDB flat early in my working life. I had peers who did. And most of those who did, utilised their CPF monies from the OA. 

This resulted in most of their OA savings being depleted by HDB. They were resigned to their fate: work till 65 or even beyond. 

For most of us who are not earning high enough incomes, such situations do not allow for CPF to meaningfully replenish to satisfactory levels. Or even to meet the Minimum Sum.

Even for those who have squirreled away enough savings in the CPF OA, the savings would be wiped out when you opt for the HDB loan route.

How now? There are four options to consider.

#1 Do not buy a HDB early in your life/career.
Build up both your CPF and cash savings for a good 6-10 years before committing to a home. Notwithstanding unpleasant familial relations, I reckon holding up in the parents' place might be a good idea. But do contribute meaningfully to household expenses.

#2 Lock up a portion of your CPF OA in CPF IS
If possible, and where opportune, investment into blue-chips and stable dividend paying companies may help mitigate some of that emptiness when the OA is depleted. Just don't buy at a high.

#3 Transfer a portion of your CPF OA to CPF SA
This is an irreversible process. But it works your money harder at a higher interest of 4%.

# 4 Buying at good value
Some people would just buy whatever is doled out by HDB at that point in time. Most of the time, HDB or MND would announce plans of some BTO areas ahead in the year. So, research is key. Even cheaper BTOs can be located quite ideally. For example the recent Canberra BTO which was mentioned in an earlier blog post. And just because everyone is aiming for Queenstown it does not mean you should too. Get a reality check on your ability to service loans for > 650k.

Note: There is only so much to be said for buying a HDB flat early or later in your life/career. Sometimes, some things cannot be foreseen. But do plan ahead, research and save up.

Thank you.

BIDADARI BTO - NOV 2015

Ok. HDB's launched the latest May 2015 BTO. But seriously, the happy bits are not there. It's in the Upcoming Launch section where it featured Bidadari Estate as one of the two areas on offer in Aug Sep Nov 2015.

The key phrase which you have to take note of is: In Toa Payoh Town.

This probably makes it a mature estate. And prices commensurate to that of mature estates i.e; more expensive.

Over 2000 units are on offer. But they are not the choicest of all. One plot is pretty near a mosque. All require the crossing of a road to get to Woodleigh MRT station. But this could be an over or underpass.

If you take a look at the URA masterplan and HDB provided map, the plot with 530 units of 3R and 4R is overlooking the lake. That is if the flats have units facing the lake. It should be quite the top pick amongst early selectees.

The only upside for Woodleigh MRT is it's a stop away from Serangoon MRT, which is the interchange between NEL and NSL. Otherwise nothing much.

It's also anybody's guess as to what the blue 3.5 commercial/residential plot would be in the future. 

The pricing as listed on HDB's website is appended above. It seems to be about 15-20% more expensive compared to the recent mature estate BTO at MacPherson Spring. I am not sure what commands this premium. Proximity to town maybe? Bidadari's Woodleigh MRT Station is 5 stops away from Dhoby Ghaut (via NEL) while MacPherson is 5 stops away from Bencoolen and 6 from Fort Canning (via DTL). You decide.

Cheerios.

Update: The income ceiling has been raised by HDB to $12,000 with effect from this BTO launch onwards. You are likely to see more applicants in the pool from now onwards. So what can you do? Nothing. Just pray harder.

Update 2: This BTO has been postponed till Nov 2015. Why? Probably to allay concerns that there are no more affordable homes per BTO exercise?

Update 3: Have included the pricing as listed on 17 Nov 2015 on HDB's website. 

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CANBERRA BTO - MAY 2015

Most BTO projects offered by HDB in recent years are terribly far from the MRT stations, except perhaps for those in mature estates. 

But the upcoming one in the May 2015 BTO caught my eye for its proximity to a North-South line station, Canberra. Not only is it situated just opposite the MRT station which is yet to be built, it is only one stop away from Yishun.

You know with Yishun's Northpoint and NorthPark, you are literally just one stop away from all the shopping, entertainment and dining amenities you want.

But do note that you are going to be pretty near some industrial estates. However, you do have a nice view of the two rivers.

If HDB is going to categorize this as a non-mature estate, it is likely to be priced in a very affordable bracket. 

Let's take a look at what's in store for the future in the area.

The blue parcel is one of the two parcels of land the BTO units would be sited on. It is essentially a typical town centre of sorts where you get neighbourhood type of shops on the ground floor, maybe even 2nd or 3rd floors up. 

It's pretty decent in size with 600 units on offer. Probably linked directly to the MRT station via over or underpass.

I personally prefer the parcel northeast of the blue piece and river facing. If there's ever this configuration.

You can spot an education institution plot in the area as well as a reserve site in yellow. The reserve site could be ANYTHING. So choose your unit wisely. 

In any case, this BTO is not for the noise sensitive people out there.

Cheerios.

Update: The May 2015 BTO should be open for application from 27 May onwards.

THE SINGAPORE PROPERTY MARKET IS GETTING CRAPPY

The weekend papers are usually dominated by retail, property and auto ads. The introduction of the ABSD and TDSR killed some of that revenue as property firms pulled ads given dismal sales.

This weekend brought new lows.



I remembered taking advertising and copy-writing classes many years ago....and the first thing they taught was USP. Or the Unique Selling Point of the product or service offered.

I guess in the case of Kingsford Waterbay, its USP is its cheapness. That ad came on Saturday.

The next day came more dismal news in the form of an article in the Sunday Times.

It would seem that people are not able to fork out cash or are willing to get into debt for their second bite at the HDB cherry. These folks have apparently counted their sums and realised that sales proceeds from existing flat would be less and thus affecting their finance and reno of the new flat in waiting. So says Chris from Chris International.

I think more of such pain would come. Or is this the proverbial 'bottom'?

I leave it to your own conclusion.

HDB RESALE PRICES SLIDE FURTHER...GOOD NEWS OR BAD?

A 1% drop for the first quarter flash estimates by HDB on resale flat prices continues the slide downwards. What does this mean for the man in the street? 

If the 1% decline is maintained for four quarters, that would conservatively shave 4% off prices by end 2015. Not a small sum I would say.

BTO pricings are in some ways affected and influenced by resale prices in the vicinity. Sure, a broad discount is applied on new offerings. But should the resale prices be on the down trend, could we possibly see cheaper BTOs being offered?

I am not sure. But it will help out on the pockets a bit for the new home owner. It's also any body's guess as to how sellers of resale flats would take this news.