If you own a HDB flat or condo, JUST SELL NOW. Rent for 3 years and buy back. For instance if your condo in now worth $4m, if its price dropped by 30% (or $1.2m), it is better for you to sell now and rent a one bedroom flat (only $3.5k pm in West). You save at least $1m after 3 years.


Sell at all cost

The New Paper
Wednesday, Sep 04, 2013


SINGAPORE - Just sell. That was what an owner of an HDB executive mansionette in the north-east told his property agent last Thursday.

In a bid to stabilise the property market here, the Government announced several major changes last Tuesday.

The new measures were so significant that sellers are reducing their asking cash over valuation (COV) - the cash premium buyers pay for resale Housing Board flats.

One of the measures was a three-year wait for newly-converted permanent residents (PRs) before they are allowed to buy resale HDB flats.

Some sellers are panicking, five property agents told The New Paper on Sunday.

Agents specialising in HDB flats said they have seen COVs plummet by up to $60,000 over the past few months and they expect the numbers to dip some more.

A property agent, who declined to be named, said her client asked for a $20,000 COV reduction for his HDB executive mansionette just two days after the measures were announced. His initial asking COV was a little above $100,000.

The agent said: "It's now a buyers' market. With the restrictions on PRs and loans given out, fewer are eligible for resale flats.

"With the smaller demand, we expect prices to fall even more - about 10 per cent.

"Some owners are getting desperate and just want to let go of their flats, especially those who have purchased another Build To Order (BTO) flat."

Ms May Chua, who has been a property agent for over four years, said her phone has been quieter in the past month.

"I used to get calls from clients as early as 7am, but now they're not as frequent," she said.

"My past few clients have also been Singapore PRs. But now they're not allowed to buy flats immediately, so there will be a drop in numbers."

With buyers becoming more cautious, it's only natural to see the softening of COVs, said property agent Ray Sim.

"I have a client who wants to keep the COV of his five-room flat at $40,000. It's going to be very difficult to sell it off," he said.

In July, an executive flat in Toa Payoh was selling for $920,000 - including a $120,000 COV - as listed on property website PropertyGuru.

When TNP checked again last week, before the latest measures were announced, it was going for $860,000.

Unachievable

Its agent, Mr Raymond Eu, said: "The owner reduced the COV by $60,000 because he realised it was unachievable.

"Plus he needs to sell it fast so he decided to be more realistic with his COV."

The overall median COV was reported to have dipped to $20,000 in July - the lowest since 2011.

Some sellers are so desperate for "whatever they can get" that they are even agreeing to sell their flats at zero COV, said Mr Eu.

According to figures from the Singapore Real Estate Exchange (SRX), the number of zero COVs have tripled from 14 in January to 49 in July.

Property agent Thomas Teo, who has been in the industry for three years, said many owners are even considering selling their flats below the valuation.

"It all depends on the urgency of the seller. I've a client who is selling his flat at zero COV because he needs the money, which is currently locked in the property," he said.

Mr Raymond Tan, 36, who is looking to buy an HDB flat, told TNP he was on the lookout for a zero COV flat because he does not have the cash to pay up front.

"I'm asset rich, not cash rich. I find it difficult to hand over a huge sum of cash when I buy a flat," said the sales manager in the aviation industry, who is not fussy about the location.

"Beggars can't be choosers."

"Since I'm looking to buy a flat on the cheap, I'm prepared to live on lower levels or in estates that are not central."

He hopes that his three-year search will soon be over, especially in light of last Tuesday's cooling measures.

"Hopefully, it'll mean a better market and more choices for buyers like me," he added.

The gloom for HDB sellers has also rubbed off on the private property market. Agents say that sellers are adjusting their prices downward as well.

Agent Jansen Tan, who has been in the private property market for almost three years, said: "There's a possibility that buyers are now waiting for HDB prices to fall."

"That's why it's been quieter on the private property market."

"I've a condo in Pasir Ris that no one has viewed for almost three months."

"We can only wait and see if things get better."