In the first nine months of 2021, 7,169 buyers with HDB addresses purchased new and resale private homes, a 21% increase from the same period last year.
The rapid increase in Housing and Development Board (HDB) resale prices has enabled HDB upgraders to easily acquire private homes, reported The Straits Times.
Citing Urban Redevelopment Authority’s (URA) REALIS data, JLL noted that some 7,169 of such buyers have acquired new and resale condominiums during the first three quarters of 2021, up by more than 21% from the same period last year.
This comes as HDB resale prices have increased faster than those of private homes over the past year, said Nicholas Mak, Head of Research and Consultancy at ERA Realty Network.
During the first nine months of 2021, HDB resale prices jumped 9.1%, compared to a 5.3% hike for private homes.
The robust resale flat prices come on the back of low mortgage rates, a recovering economy as well as fresh demand arising from delays in the completion of Build-to-Order (BTO) flats.
Notably, a record 192 resale flats were sold for at least $1 million as of 31 October, compared to 82 such HDB flats sold for the whole of 2020.
“Some are also buying now because they expect prices to head higher, in view of the recovering global economy and a declining supply of new condos,” said Christine Sun, Senior Vice-president of Research and Analytics at OrangeTee & Tie, as quoted by ST.
JLL said resale condos were more popular among HDB upgraders, with around 62% of the 7,169 deals falling in this category.
JLL Singapore’s Senior Director of Research and Consultancy Ong Teck Hui attributed this to resale condos being more affordable than new units.
Citing caveats lodged during the first nine months of 2021, PropNex shared that the number of resale condos sold to HDB upgraders soared 119% to 4,212 units, from 1,924 units over the same period last year.
Meanwhile, the number of new condos sold to such buyers also rose 26% in the first nine months of 2021, compared with the same period last year.
Among the reasons cited for upgrading to condos include the Central Provident Fund (CPF) rules and being close to family.
Nabisah Abdul Kadir, a 54-year-old school support staff member, decided to upgrade to a new condo a year before she turns 55, when additional CPF restrictions on withdrawals kick in.
In September, Nabisah sold her 43-year-old four-room HDB flat at Pandan Gardens for $410,000 and secured a loan to acquire a three-bedder at Twin VEW condo for $1.5 million. She will be collecting her keys for her condo in January.
“This is the best time to sell my flat because I’ll be 55 next year and I won’t be able to access my CPF savings in full for housing payments for a new property,” she said as quoted by ST.
ST noted that once eligible Singaporeans reach 55 “their CPF Retirement Account is created with savings from their Special and Ordinary Accounts to meet their applicable retirement sum”.
“They will also be automatically included in the CPF Life scheme, which provides members with a monthly payout for life if they meet the criteria,” it added.
The funds left in their Ordinary Account may be used for mortgage repayments.
Aside from offering a sea view, Nabisah’s new condo on the 21st floor also allows her to see the flat of her mother in Pandan Gardens.
“I bought the Twin VEW condo as it is very near my mum’s place. We are separated just by Pandan River,” she added.
The desire to be near her family is also the reason primary school teacher Mariam Ibrahim decided to sell her four-room flat in Toa Payoh and purchase a one-bedder at Treasure at Tampines for $790,000.
And while she had considered buying a bigger three-room resale condo, she opted for a new unit as she does not want to be faced with a massive renovation job.
“I am willing to sacrifice space as long as I don’t have to do a massive renovation and have to service both a mortgage loan and a renovation loan,” she said as quoted by ST.
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Cheryl Chiew, Digital Content Specialist at PropertyGuru, edited this story. To contact her about this story, email: cheryl@propertyguru.com.sg.
