Higher ratio of newly eligible flats resold

THE Housing Board resale market may be sliding, but that did not stop a greater proportion of owners from selling their new flats once they could.

Last year, one in 10 flats that became eligible for resale - having met the five-year minimum occupation period (MOP) - was sold within a year, according to HDB figures.

This is in contrast to 2013, when only 5.5 per cent of flats were resold within a year of turning eligible - a large drop from preceding years. HDB resale prices began to fall only in the second half of 2013, and homeowners might have held on to their flats to see where the market was heading, said experts.

But last year, prices fell steadily every quarter for a full-year drop of 6 per cent.

"Things became much clearer," said PropNex Realty chief executive officer Mohamed Ismail Gafoor.

Homeowners might have thus decided to accept current prices, as they feared that flat values would only get lower, said OrangeTee manager of research and consultancy Wong Xian Yang.

As for why owners were willing to sell at all, Mr Wong said those who bought directly from the HDB are still "sitting on large profits of at least over 70 per cent".

Mr Ismail said that private home prices also fell last year, allowing sellers to upgrade.

"In 2014, we saw the greatest discounts in many new private launches," he said.

In 2013, 470 out of 8,521 eligible flats were resold.

Last year, there were 485 flats resold. But this was out of a much smaller pool of 4,497 newly eligible flats, thus representing a higher proportion.

The similarly low figures might just reflect the number of units that the resale market can absorb, said R'ST Research director Ong Kah Seng.

There were 17,318 resale deals in total last year, down 4.3 per cent from 2013 and the fewest since 1997.

There might also have been owners who wanted to sell in 2013, but did not succeed.

But these are secondary reasons for the higher proportion of flats resold last year, he added.

"The main reason is still due to owners who are increasingly realistic about the selling prices of their flat."

Besides selling, homeowners can also sublet their units for rental income after the minimum occupation period is met.

But with rents staying flat last year, fewer homeowners did so.

Last year, just 169 units or 3.8 per cent of newly eligible flats were sublet within a year of meeting the MOP.

This was down from 412 units or 4.8 per cent in 2013.

According to SRX Property's rental index, HDB rents dropped 2.1 per cent over the whole of 2014.

Administrator Angie Chua, 55, is among those who are selling so they can upgrade sooner rather than later.

She put her three-room Commonwealth flat on the market after moving into a new five-roomer in Jurong in January.

"If I don't sell my flat now, it will be harder to sell next time when it is older," said Mrs Chua, whose Commonwealth unit is almost 50 years old.

HDB flat owners have to sell off their existing flat within six months of getting their new HDB home.


Additional reporting by Yeo Sam Jo


470 out of 8,521 eligible flats resold in 2013

485 out of 4,497 eligible flats resold in 2014

This article was first published on March 2, 2015. Get a copy of The Straits Times or go to straitstimes.com for more stories.