A Quiet 2014? What does this mean for buyers and sellers of HDB Flats in Singapore

HDB Flats in Singapore

Recently, several newspapers have been publishing forecasts of a quiet 2014 for the real estate market including HDB Flats in Singapore. (For example, this one by Straits times.) This, in addition to all the cooling measures rolled out by the Singapore Government since the September 2009. As an observer who owns a HDB or need one pretty soon, its no wonder you’re confused about how it’s going to affect you.

Housing is a tricky topic. It can make a person rich if bought and sold at the right time, but at the same time there are thousands of bankruptcy cases because decisions are made on impulse and without proper planning. Despite that, no one can argue that housing is a basic human need, because everyone needs a roof over their heads. As public housing, HDB flats in Singapore were created for that purpose, i.e. to fulfill the basic human need for shelter.

So while the government is putting in much effort to try to quell down prices, where does this leave you? Obviously, the cooling measures would affect you very differently depending on if you are a buyer or a seller.

HDB BTO

We have listed a few life situations which may reflect the one you are facing right now, so that you can make a more informed decision.

1) Buying your first HDB flat in Singapore

You are in luck. Considering the high cost for wedding expenses, etc, previously the only other choice was to get a flat direct from HDB, i.e. a HDB BTO or Build To Order which took about 2 – 3 years to complete.

However, the stars are now in your favour. In terms of affordability, COVs are at its lowest.  Prices of HDB Flats are no longer going through the roof and COVs in certain areas have even gone down to zero. What’s even better, bigger flats, when properly negotiated, can be bought for $10 000, $20 000 or even $30 000 under valuation.  There are sellers who have no choice but to sell off their flat because the new one is ready, and this is where you can capitalize on it.

If you are still deciding between getting a resale flat or a HDB BTO, you may want to read this article on HDB BTO or Resale Flat? 

2) Buying a bigger HDB flat to fit a growing family.

If you plan to upgrade to get a bigger flat for your growing family, you’ll be glad to know that there are deals which can be snapped up. Because of the tighter loan regulations ( Total Debt Servicing Ratio or Mortgage Servicing Ratio MSR), there are more buyers for smaller flats than bigger ones. This means that your smaller flat can probably still command a good price. And with bigger flats going at a bargain, this situation is a boon for you. However, other factors like, job stability should still be considered because you are taking on a bigger loan.

3) Selling your flat and downgrading to a smaller property

Unfortunately this is not the ideal moment for you to sell your flat if you are hoping to make a big profit. Prices of bigger flats are being pushed down due to the smaller pool of buyers in the market who can get loans for bigger properties. These buyers are thus competing for smaller flats causing the demand to remain strong.

Unless you are approaching 55 and won’t be able to afford paying for your HDB flat any longer i.e. you are affected by CPF’s retirement account rulings, you might want to consider pushing your plans to another 8-10 years for the next property up cycle.

4) Selling your flat and upgrading to a private property

Prices of HDB Flats are at an all time high, which means that you can cash out substantially from the sale of your flat and put the proceeds into the purchase of a private property. Ideally, this would be a freehold property, which you can hand down for generations.

However, you should plan your finances to ensure that you do not overstretch yourself on the purchase of your new home.

Landed Property Singapore

In conclusion, there is actually no absolutely right time for anyone to make a decision regarding real estate. Everyone has different life situations which can affect their finances. Be informed before you jump into making that decision.

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For a free review or consultation of whether the current market is profitable for you to sell your HDB Flat in Singapore , please contact us at askus@propertyrocking.com or at 96918885.

 

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Siti Zubeidah is a Marketing Director with ERA Realty Network Pte Ltd. (CEA No.: R050625J) She has a Bachelors Degree in Informations Communications and Sociology from the National University of Singapore (NUS) and a Masters of Mass Communications from Nanyang Technological University (NTU). With vast experience in the HDB market, Private and Landed Properties in Singapore, she is confident that she can assist you to make the correct decision regarding the purchase of your dream home as well as to get you the best price on the sale of your property. She can be contacted at 96918885 or at askus@propertyrocking.com.

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