News: Newer HDB flats reach record sales in 2019

Jan 31, 2020

A lot of home owners lately have been selling off their Housing Board flats once they reach the minimum occupancy mark, reported The Straits Times.

Sales of HDB flats that are less than 10 years old recorded a nine-year high in 2019, as 4,578 units were moved. This was a 33.4% increase compared to the 3,432 units sold in 2018.

Sales were at its lowest in 2014, with only 1,021 being moved.

This increasing number of newer flats being sold off by young Singaporeans raises the question of whether this generation treat the flats as a lifetime home or an investment to be sold at the right price.

Property experts explained that the trend is an indication of the upgrading aspirations and changing lifestyles of the younger generation.

“With higher education and rising income, it’s unsurprising that the younger generation of home owners are desiring to upgrade to a bigger flat or a private property, after their first BTO purchase,” said Christine Sun, head of research and consultancy for OrangeTee & Tie.

Nicholas Mak, ERA Realty’s head of research and consultancy, said that some may be embracing the idea of moving up the property ladder to upgrade to a bigger and better home, as well as to improve the quality of life.

Changes in family or financial circumstances may also be reasons for selling, he noted.

“In that five to eight years of waiting for the BTO to be completed and actually living in it, their family size might have grown. They may want to move closer to their preferred primary school or their parents or in-laws,” he said.

Build-To-Order unit owners have to reach a five-year minimum occupation period (MOP) before they are allowed to re-sell their unit.

This MOP starts to run from the date the owners collect the keys and does not include the period where the owners do not occupy the unit.

The HDB increased the supply of new flats after the occurrence of a housing shortage, with at least 25,000 flats launched annually from 2011 to 2013.

This resulted in more than 80,000 flats becoming available for resale in the next three years, as the flats hit their MOP mark.

About 30,000 units reached their MOP last year, with 24,000 reaching it this year. In 2022, at least 31,000 units are expected to also reach their MOP.

The demand for newer flats have increased steadily from 2014, when flats less than a decade old comprised just 6.3% of the total number of units sold.

The figure stood at 20.6% in 2019, 15.7% in 2018 and 13.7 in 2017.

Sun believes that the quantity of newer units being sold will probably go on the rise side by side with the number of flats hitting their MOP.

“The increase in flat supply may have some downward pressure on the selling price, so price growth could be limited in the coming years. On the bright side, this means buyers will have more options to choose from,” she said.

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