The full article can be found in Lianhe Zaobao, Homepage, 16 July 2018.
There have been a lot of concerns about the value of Housing and Development Board (HDB) flats with less than 60 years of remaining lease. HDB flats with leases of 60 years or less will increasingly not be seen as assets that can still have significant upside in value. It is only natural that a flat with shorter remaining lease will be priced less than a similar one with more years of lease left.
However, SRX Property estimates showed that HDB resale transaction rose from 8.16 per cent in 2014 to 9.78 per cent in 2016. It subsequently increased to 12.62 per cent last year.
The 1,390 HDB resale transactions in mature housing estates accumulated in the first half of this year were significantly higher than the 1,235 HDB resale flats transacted in the same period last year, and 949 in the same period in 2016.
In the past four years, HDB towns that have accumulated more resale transactions for ageing HDB flats are mostly mature estates in Queenstown, Ang Mo Kio, Toa Payoh and Redhill.
Similarly, in the first half of this year, 526 of the 1,390 ageing flats transacted were in Bedok, Toa Payoh and Ang Mo Kio, accounting for nearly 40 per cent of the transaction volume. However, the average resale price of S$490,870 in 2014 dropped to S$428,899 in the same period this year.
Many homebuyers who have bought ageing HDB flats hope to benefit from the Selective En bloc Redevelopment Scheme (SERS), but there are some who considers location, flat sizes, environment, and other related attributes.
According to real estate analysts, resale prices of HDB flats have stabilised in the recent years, coupled with the increase popularity of ageing flats due to its location.
A veteran analyst with more than twenty years of experience in the real estate industry under his belt, Nicholas Mak pointed out that the transaction volume of HDB flats has been increasing for the past years, with prices falling slightly.
He said, “However, the overall HDB resale market has stablilised. This may be due to homebuyers who are more willing to enter the HDB resale market. “
“Some buyers purchased ageing HDB flats for their own stay due to its strategic location, so it is not important to them whether their flats will be selected for SERS or not,” he added.
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