ASIA ONE : Sell flat for $300,000 profit? No way

Sell flat for $300,000 profit? No way

Out of 60 residents polled, 58 say they are staying put in popular HDB estate.

Mon, Jan 11, 2010
The New Paper

By Desmond Ng with additional reporting by Aretha Loh, Lim Wei Li, Nurul Asyikin Nasir, Samuel Wee and Woo Sian Boon

RETIREE Wang Mei Ling is sitting on a potential profit of about $300,000 for her HDB flat in a prime location. But she's far from happy.

Every day, she contends with a letter box stuffed with brochures and flyers from property firms. Flyers are also often stuck into the front grille of the flats there.

Residents like Madam Wang, 53, are also plagued by cold calls from agents every day, bugging them to sell their homes. Sometimes they even get accosted by agents at lift landings.

This is the flip side to the HDB property boom. Residents say they are constantly hounded despite their insistence that they don't want to sell.

Madam Wang lives in one of the most premium HDB estates - Kim Tian Road at Bukit Merah - where prices are among the highest of the 25 public housing estates.

Highest price

The highest transacted price for a five-room flat there was $668,000 last November, based on resale transactions on HDB's website. Part of the attraction is the proximity to Raffles Place, a five-minutes bus ride away.

An agent who sells a five-room flat here for $650,000 can pocket about $13,000 (if paid 2 per cent commission). These flats were built under the Selective En-bloc Redevelopment Scheme (Sers) in the late 1990s.

The New Paper spoke to 60 residents living in the four blocks there and almost all were unhappy with the hounding and the flyers.

Madam Wang, who lives with her husband and two sons, said the cold calls and flyers began during the property boom in 2007. She bought her four-room flat from HDB for $250,000 in 2000 under the Sers programme.

Said Madam Wang in Mandarin: "There are so many flyers daily that I have no use for except to pick up my dog's poo."

Another resident, who only wanted to be known as Mrs Loh, said she's annoyed by the unsolicited calls from agents. The designer said: "In December, I received two such calls. When I asked them how they got my number, they just said that they have their ways."

A 69-year-old retiree, Mr Tham F L, who receives two to three flyers every day, said: "I just chuck them in the bin without reading. What for when we don't intend to sell?"

Top dollar

PropNex's chief executive, Mr Mohamed Ismail, said this estate gets more attention from agents because there is strong demand from potential buyers willing to pay top dollar.

He said: "These are considered lucrative properties. The commission from a successful deal can be quite high. Hence there is a lot of door-knocking and telemarketing done in that area."

Though they stand to make a sizeable profit, 58 of the 60 residents interviewed said they are not interested in selling.
Forty-one of the 60 had bought directly from HDB.

Most would have paid between $300,000 and $400,000 for their new five-room flats in 2000, depending on which floor they are on. Today, the units would fetch at least $600,000.

HDB resale prices rose 8 per cent last year, despite the economic slowdown. Administrator Peter See, 51, said he'll only sell his five-room flat if some "joker offers me at least $800,000". He paid $385,000 for it nine years ago.

Mr See said: "Even if I manage to sell my place at the market price today, I would have to buy high too, unless I downgrade to a smaller unit or move away from this area." Mr See lives with his wife and daughter in a 1,237-sq ft unit. He likes the convenience of having Tiong Bahru MRT station only a five-minute stroll away.

Retiree Fong Shao Chuan, 71, did sell his four-room flat for $540,000 in June last year. He paid HDB $270,000 for it nine years ago. He said he did it to help finance his daughter's $600,000 purchase of a new five-room flat in Pinnacle@Duxton.

Said Mr Fong in Mandarin: "I wouldn't have sold my flat if I didn't have to help my daughter. I am going to move in with her to take care of my grandchildren."

PropNex's Mr Ismail said flats in this estate command a premium due to its proximity to town. They are also newer than other flats in that area.

He said: "If these home-owners want to continue a certain lifestyle - the convenience of living near town - they'll have to pay a high price for a replacement unit in that estate.

"For those who are still working and can afford the monthly instalments, there's no urgency to sell."

And there's the possibility of their units fetching even higher prices in the future, he added.