07 Jun 2019
Our current HDB resale flat is 35 years old and we only moved in 2 years ago. How do we gauge when is a good time to start looking for the next property?
My wife and I moved in 2 years ago and we are worried that our resale flat will lose its value if we live here too long. When do we know if it’s a good time to start looking for a new property? We are both working professionals with a combined income of approximate $9000.
Thank you all in advance!
You would have lost a certain pool of buyers after your flat turns 40 years old. That's because buyers can't use their cpf for the flat after it is 70 years old. For flats that are in between 40-70 years old (meaning remaining lease of 60-30 years), buyer's age plus remaining lease must be at least 80 years for them to still be able to use cpf and/or take max loan. Or else they have to buy your flat using more cash. Unless your house is in a prime district and many people are willing to spend cash, I would say your flat loses value after 40 years.
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As what Petrine mentioned, when a property remaining lease reaches 60 years and lower, the next buyer must be able to stay in your flat until they are age 80 if not he/she wouldn't be able to use CPF OA to finance your unit.
Since after you reach MOP, your unit will have a remaining lease of 61 years, I would urge you to sell by then before it hits the 60 year mark.
This is a rough idea of how your HDB value may go after the 60 year mark. This appeared in the Straits Times last year (2017)
Although I would take this with a pinch of salt after the recent National Day Rally where PM Lee introduced the VERS (Voluntary Early Redevelopment Scheme).
The government assured that HDB owners would be able to opt for VERS when the lease is ending and HDB would give a 'reasonable' compensation unlike SERS (Selective Enbloc Redevelopment Scheme) which has a windfall effect. However, we would not know what is considered a 'reasonable' compensation since no one has undergone this program yet.
In a nutshell, I would recommend selling your place after you reach MOP. Even if you are not interested to upgrade to an EC or private condo, you should find a resale HDB with a younger age to be on the safe side!
It would be good to sell before the HDB flat reaches 40 years old. However, you need to fulfill your...
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