The following measures have been put into place to benefit first-time flat buyers:

a) Increase the 2011 flat supply by offering 14,000 new Build-to-Order (BTO) flats in the first half of 2011. This is comparable to the BTO supply for the whole of 2010. If demand sustains, HDB will offer up to 22,000 BTO flats for the entire 2011. This will be the largest annual supply of BTO flats in the last decade.

b) Starting from the Mar 2011 BTO exercise, HDB will halve the time taken to invite applicants to select their flats. HDB will inform applicants of their ballot results within 3 weeks of the launch. Selection of flats will start from the 4th week onwards, instead of the 9th week previously. The faster turnaround will enable applicants to know their queue number for the current launch, before deciding whether to apply for the next BTO launch.

c) Raise the monthly household income ceiling for purchase of 3-room standard flats in the non-mature estates from $3,000 to $5,000. The higher income ceiling will give low- to middle-income first-timer households more choices of affordable flats.

In addition, additional grants will be given to the lower-income families. For more details, you can refer to this HDB press release.

More Help For Low Income Families

Hopefully, this additional “stimulus” will not be negated by a rise in the price of HDB flats. We shall see.

After questions were asked about PR siblings under the age of 35 being allowed to buy HDB resale flats, the government has decided to discontinue the scheme with immediate effect.

According to Senior Minister of State for National Development Grace Fu, the scheme was no longer necessary as with the liberalisation of the subletting market for HDB flats over the years, unmarried siblings who have parents staying overseas can now rent a room or small flat from the open market.

The scheme was previously introduced in 1990.

About 300 (or 1% of total flat transactions) of such cases get transacted each year.

A little known practice has come to light after questions were asked over how come Permanent Residents (PR) siblings under the age of 35 could apply to buy HDB resale flats when Singaporeans couldn’t.

According to a clarification from HDB, siblings (both citizens and PRs) under age 35 can apply to buy HDB resale flats if their parents live overseas and do not already own a public flat.

Such cases will be considered on a case by case basis.

From HDB’s point of view, the same rule applies to both citizens and PRs.

However, I think it’s pretty clear to most of us that since the parents of most Singaporeans would be living in Singapore, we would not be able to take advantage of this ruling.

In the first place, I doubt any one of us here even knew there was such a rule!

In the Sunday Times yesterday, National Development Minister Mah Bow Tan said that the recently introduced cooling measures by the government was working.

In the resale Housing Board market, median cash over valuation (COV) payments in October fell to $25,000, from $30,000 in the previous quarter.

Unfortunately, even though COV is dropping, the current formula of pegging prices of new HDB flats to transacted prices (less subsidy) means that valuations of HDB units will continue to go up as prices chase the COV in a never-ending spiral…

Mr Mah also pointed out that in the private property market, prices are still rising but the increases have moderated.

According to the Urban Redevelopment Authority (URA), private residential prices rose 2.9 per cent in the third quarter of this year. This represented a step-down from the previous quarter, when prices jumped 5.3 per cent.

Seriously, I don’t think this kind of growth is sustainable. 2.9% a quarter or almost 12% a year. Are our incomes even growing at 12% a year? Perhaps so for just a small select group of people.

Which leads me to introduce this affordability ratio:

Property value/annual disposable income

Where annual disposable income is your income net of tax

At the peak of the massive Japanese bubble, the ratio was at nine times in Tokyo. It is already 14 times in Beijing with the rest of China having a national average of about 8.

How affordable really is Singapore property?