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Thread: HDB resale rule one month on: Buyers cautious

  1. #1
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    Default HDB resale rule one month on: Buyers cautious

    http://www.straitstimes.com/premium/...tious-20140410

    HDB resale rule one month on: Buyers cautious

    Buyers fear high cash outlay while sellers' bargaining position weakens: Property agents

    Published on Apr 10, 2014

    By Janice Heng


    A MONTH after the Housing Board's new resale process began, the need to agree a price before getting a valuation has not been popular, say property agents.

    Even though the market has adapted to looking at past transactions as a guide, buyers still dislike the uncertainty over their cash outlay, while sellers find it hard to bargain.

    Previously, sellers would first get an official valuation from the HDB, then use it as a basis for negotiation with buyers.

    But from March 10, the HDB accepts valuation requests from buyers only, and only after a price has been agreed.

    "First, there were a couple of weeks of confusion," said Prop-Nex Realty agent Michelle Lai.

    And though buyers now better understand the change, they are holding off on making decisions.

    "Even though they are keen to buy, they are reluctant to decide a price," said Spacez Real Estate agent Cheryl Tan.

    This might partly be due to the hope of better deals later. Dennis Wee Realty agent Priscilla Pang said: "I believe that buyers are still holding on, waiting for the market to drop further."

    But there are also concerns about possible nasty surprises.

    The HDB valuation determines the maximum housing loan and amount of Central Provident Fund savings that can be used to fund a purchase.

    If the agreed price is higher, the excess is paid in cash - what was known as cash-over-valuation (COV).

    Previously, buyers knew the cash premium they were committing to when they agreed a price. Now they do not, making them more cautious in their offers.

    "It's a guessing game," said Singapore Estate Agency agent David Ang. "If their finances are tight, they bear the risk (of a high cash outlay)."

    And if they back out, they lose the amount they had to pay the seller for an Option to Purchase, which is usually about $1,000.

    In today's cool resale market, the risk is lower.

    The median COV fell to zero in February, with many units in non-mature estates going for prices below valuation.

    Still, Dennis Wee Realty agent Judy Tan advises buyers to have enough ready cash - at least $10,000, say - so they will not be caught out.

    As for sellers, the change weakens their bargaining position, as they can no longer use the valuation as a basis for asking price.

    "Most sellers today are desperate" as they have bought new flats or condominiums and are collecting their keys soon, notes Prop-Nex Realty agent Charles Tan.

    Nevertheless, both sides are getting used to the new reality.

    One alternative Mr Tan uses to help sellers is the Singapore Real Estate Exchange's X-Value, which approximates a unit's value.

    But most agents say the HDB's proposed option - looking at past transactions - is enough.

    "Ultimately, using past transactions in the vicinity is more useful (than a single figure)," said ERA Realty agent David Lim.

    The change has not affected popular areas such as Queenstown and Ang Mo Kio, he said, adding that, otherwise, "buyers are adapting".

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  2. #2
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    http://www.straitstimes.com/premium/...oured-20140410

    Flats with existing valuations favoured

    Published on Apr 10, 2014


    BUYERS are favouring resale flats which already have official valuations, as such deals offer more certainty, say agents.

    Since March 10, the Housing Board has accepted valuation requests only from buyers who have been granted an Option to Purchase by the seller. But it will honour valuations which were granted earlier and have not expired.

    "As a typical valuation report is valid for up to three months, many transactions this month are not really affected by the changes yet," said OrangeTee managing director Steven Tan.

    Said PropNex Realty agent Michelle Lai: "(Buyers) are not buying the units that fall under the new ruling. They're buying the units with existing valuation."

    The HDB valuation decides a buyer's maximum housing loan and how much Central Provident Fund savings he can use.

    By knowing the valuation at the point of agreeing a price - as was the case under the old process - the buyer can judge how much cash he will need to pay.

    This certainty is absent in the new system, since a price is agreed before the valuation is granted. And that is why flats without existing valuations "are the ones that buyers aren't keen on", said Spacez Real Estate agent Cheryl Tan.

    JANICE HENG

  3. #3
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    33 Balam Rd 11 to 15 137.00 Model A 1996 $680,000.00 Dec 2013

    30 Cassia Cres 11 to 15 120.00 Improved 1998 $790,188.00 Dec 2013

    More than SGD 100,000 cheaper, 17 sqm bigger.




  4. #4
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    I am familiar with these 2 locations.
    Even with comparable amenities (circuit rd vs old airport rd food market, mountbatten vs (future) Merpati MRT), the balam rd is still a notch or two below cassia crescent in terms of environment. The 100k difference is actually justifiable.

    Quote Originally Posted by Arcachon View Post
    33 Balam Rd 11 to 15 137.00 Model A 1996 $680,000.00 Dec 2013

    30 Cassia Cres 11 to 15 120.00 Improved 1998 $790,188.00 Dec 2013

    More than SGD 100,000 cheaper, 17 sqm bigger.




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