Now is probably the best time to get your resale flat. Here’s why:
The rental volume of HDB resale flats rose by 26.1 per cent last month, as prices fell. In fact, resale flat volumes are the highest since August last year.
March saw 1,657 Housing Development Board (HDB) resale transactions, up from the 1,314 units sold in February. The increase could be seasonal (February tends to be slower because of Chinese New Year). But we think there may be more to it than that.
First, the numbers are significant: last month’s resale volume was 12.7 per cent lower, with 1,897 HDB units transacted at the same time last year. As a longer term trend, HDB resale volume rose 58.7 per cent in March last year, and 75.4 per cent in March 2017.
Some other factors that are driving resale volumes
There will be only one Executive Condominium (EC) launch this year at Sumang Walk. Conversely, a larger number of flats are nearing their Minimum Occupancy Period (MOP), which will place more resale options on the market.
But above all, we should point out that…
HDB resale prices have been falling for five consecutive years
As prices fall and transaction volume rises, we seem to be reaching an inflection point in the market. Resale prices already edged up 0.2 per cent last month. Prices of three-bedroom HDB flats rose by 0.8 per cent, and executive flat prices rose by 0.4 per cent.
In addition, a reduction in the Loan To Value Ratio (LTV) from the previous cooling measures limit bank loans to 75 percent of the property price or valuation, whichever is lower. But HDB loans can still provide an LTV of 90 per cent. This translates to a smaller cash outlay, and can make resale a more attractive option compared to ECs (HDB loans cannot be used for ECs).
In short, a combination of affordability – along with a wider range of options – make resale flats an ideal choice for the average home owner this year.
What else can the authorities do to remedy this? Voice your thoughts in our comments section or on our Facebook community page.
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