WHY IS IT TIME FOR YOU TO SELL YOUR HDB?

SLOWING GROWTH IN HDB RESALE PRICES IN 2023

Data has shown that HDB resale prices are showing a muted growth since the high of 2021. The recent Q3 2023 numbers showed an increase of of only 1.2% when it comes to resale prices. It came down 0.3% over the previous quarter. HDB resale volume also showed a drop which means less HDB flats are being transacted month on month.

WHAT DOES IT MEAN FOR HDB OWNERS?

As property consultants, having been in the business for more than 15 years, the HDB market is shifting towards a slow but sustainable growth as per the intention of the government . This will ensure public housing remains affordable. With 100,000 more BTO flats being built in the next 5 years, the focus on resale will definitely take a hit. The question is - Will You Be Affected When The It Hits You?

The graph below shows the resale trends over the past 20 years. With similar strategies implemented by the government on top of the property cooling measures, we will probably see a repeat of the cycle between 2013 to 2020 where prices of HDB resale flats showed negative growth.

SHOULD I WAIT FOR THE NEXT UP CYCLE?

Unless you have been paying cash for your mortgage all these years then perhaps you have a choice to bet on the next up cycle. But let's face it, today's 5room resle flat in Sembawang transacted at $700k. Do you think in the next 5 years, taking into consideration a modest 3% inflation per annum, the flat will be valued at more than $800k? I think you know the answer.

If you are utilising full CPF for your mortgage payments, on top of HDB interest rate of 2.6% plus CPF accrued interest rate of 2.5%, you are barely keeping up with inflation. Provided the valuation of your HDB flat grows in tandem. Else, your asset is considered an negative asset. The CPF you invested into the flat gives you negative returns - not working hard for you. So what's the implications? Your Retirement!!

WHAT SHOULD I DO NEXT THEN?

There is no "silver bullet" or template solution that will suit everyone. Each situation is unique and different. Should you be right-sizing? Maybe upgrade to a bigger HDB at a better location? Perhaps a private property can be an option to generate wealth? But should it be a new launch project or a resale condo?

The main question is about what is SAFE for you!! Many factors to consider but fundamentally is it a safe entry price? Have the risks been mitigated? What's the exit strategy? Is there opportinities in today's market?

TO KNOW WHAT SUITS YOU AND YOUR FAMILY?

CONTACT NEEZANIZAM TODAY FOR A 

FREE CONSULTATION!!