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Fewer New Resale flats put up for Sales

Posted by Property Launch Invest on Saturday, 10 May 2014 in Property News

Fewer flat owners are jumping at the chance to sell their Housing Board unit once they can, as weak resale prices make it more worthwhile to hold on.

Two years ago, almost one in five of those who turned eligible to sell their flat - having stayed for the minimum five years - promptly did so within the year.

But last year, amid a cooling market, only 5.5 per cent who had met the minimum occupation period (MOP) did so.

Of 8,521 possible flats, 470 changed hands within a year of meeting MOP, HDB figures showed.

Given the lacklustre resale market overall, it is no surprise that few newly eligible flats are changing hands too, said Chris International director Chris Koh.

HDB resale transactions fell to just 18,100 last year, the fewest since 1997.

Experts said that flat owners were holding on to their homes in the face of low resale prices and cash over valuation (COV).

Resale prices fell 0.6 per cent over 2013, the first annual decline since 2005.

As for COVs, these cash premiums could once hit six figures for a choice unit. But they had fallen to a median of zero in February and were removed from the resale process in March.

Then, there may be flat owners who would like to sell, but cannot afford to upgrade.

Since August, the maximum tenure for HDB home loans has been cut, and buyers can use only up to 30 per cent of their income to service their mortgage, down from 35 per cent.

Those hoping to upgrade to private property face similar curbs.

Finally, even if more of the newly eligible wish to sell their flats, they may not find buyers.

Resale demand has fallen, partly since the August rule change requiring new permanent residents to wait three years before buying an HDB flat.

Property Launch Invest

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PROPERTY LAUNCHES & INVESTMENTS

Property Launches & Investments

Fewer New Resale flats put up for Sales

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