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Sales of newer HDB flats hit 9-year high in 2019

30 Jan, 2020

Punggol and Sengkang had the highest number of newer flats sold from 2011 to last year.PHOTO: ST FILE

4,578 units that were less than 10 years old changed hands, 33.4% up from previous year

Increasing numbers of home owners have been selling their Housing Board flats the moment they hit the minimum occupancy mark.

Sales of HDB flats less than 10 years old hit a nine-year high last year, when 4,578 units changed hands - 33.4 per cent up on the 3,432 moved in 2018. The low point was in 2014 when only 1,021 units were sold.

Owning an HDB flat - more often than not, a Build-To-Order (BTO) unit - is a significant a rite of passage for many young Singaporeans.

But the growing number of newer flats being sold raises the question of whether this new generation of owners see their flats as a home for life or an investment that they can let go of at any time if the price is right.

Property experts told The Straits Times that the trend reflects the changing lifestyles and upgrading aspirations of younger people.

Ms Christine Sun, head of research and consultancy at OrangeTee & Tie, said: "With higher education and rising income, it's unsurprising that the younger generation of home owners are desiring to upgrade to a bigger flat or a private property, after their first BTO purchase."

Mr Nicholas Mak, head of research and consultancy at ERA Realty, added that some may like the idea of climbing the property ladder to improve both quality of life and to upgrade to a bigger home with more privacy and amenities.

Changes in financial or family circumstances may also factor into reasons for selling, he added.

"In that five to eight years of waiting for the BTO to be completed and actually living in it, their family size might have grown. They may want to move closer to their preferred primary school or their parents or in-laws," noted Mr Mak.

BTO flat dwellers have to fulfil a five-year minimum occupation period (MOP) before they can sell their units on the resale market.

The MOP is calculated from the date that owners collect the keys and excludes any period where the owners do not occupy the unit, such as when he or she is based overseas for work. An increasing number of flats have reached their MOP in recent years.

The HDB had boosted the supply of new flats following a housing shortage, with more than 25,000 flats launched each year from 2011 to 2013. As a result, more than 80,000 flats will be eligible for resale in the coming three years, as these units reach their MOP.

Last year, around 30,000 flats reached their MOP. This year, there will be 24,000, and 2022 is likely to have a bumper crop of 31,000 flats or more. In contrast, only around 1,700 flats reached their MOP in 2013.

Demand for newer flats has also steadily risen from 2014, when units less than 10 years old formed just 6.3 per cent of the total number of flats sold. Last year, it was 20.6 per cent. The figure was 15.7 per cent in 2018 and 13.7 per cent in 2017.

Punggol and Sengkang had the highest number of newer flats sold from 2011 to last year. This coincides with the rising number of flats in both areas that have reached their MOP in recent years.

The next three were Jurong West, Bukit Merah and Yishun. Ms Sun said the number of newer flats being sold will likely continue to rise in tandem with the number reaching their MOP.

"The increase in flat supply may have some downward pressure on the selling price, so price growth could be limited in the coming years" she said. "On the bright side, this means buyers will have more options to choose from."

Adapted From The Straits Times, Jan 30 2020