ST : Time is running out

Sep 11, 2010

FLAT RESELLER

Time is running out

MR GOH LYE CHONG, 43, production manager

OLD DREAMS

Mr Goh and his radiographer wife have been living in a five-room Housing Board flat in Sengkang for the past 10 years, but will soon be selling it to move closer to his ageing parents' Mountbatten home.

His second matrimonial home in Boon Keng will also be a new HDB flat, albeit smaller. The keys to his new four-room flat will be available before December. Once he collects them, he will need to sell his Sengkang home within six months.

Given the exuberant market before Aug 30, he was hoping to sell his Sengkang flat for $450,000, with a cash- over-valuation component of $25,000 to $30,000.

WHAT CHANGED ON AUG 30

The changes effectively shrank the demand for Mr Goh's flat.

Anybody who buys an HDB resale flat will have to live in it for five years, before he is able to sell it or sublet it. Before that, a buyer who did not use a subsidy had to live there for only three years.

The changes disallow the resale flat owner from investing in private property within those five years, where there were no such rules before.

Private property owners who buy resale flats also have to sell off their existing private properties.

NEW HOPES

These changes have lowered Mr Goh's expectations. 'Everybody is playing the waiting game,' he notes, but time is not on his side.

'By hook or by crook, I have to sell it within six months of getting my flat. If I can't find a buyer by next year, I will expect a lower COV for my flat.'

He thinks he is more likely to get at most $430,000 to $440,000 for his flat now.

Fortunately, he has set aside savings to finance the renovations of his new flat, which means that whatever proceeds he gets from the sale of his Sengkang flat will be a bonus.

'The Government definitely had to do something to cool the market. Even though, as a reseller, I feel the impact of the changes, I can understand why the Government did it.

'I just count myself unlucky.'

REAL OPTIONS

For owners of HDB flats, it's time to get realistic. Demand for resale flats is expected to shrink as some private property owners - both locals as well as permanent residents - stay away in order to keep their existing properties.

Mr Albert Lu, managing director of C&H Realty, says: 'If there is a genuine offer and the offer is near your expected price, let the flat go.

'Even if you have to sell at a lower price now, bear in mind that you may also be buying at a lower price especially if you are upgrading or downgrading to another HDB resale flat.'

Besides, the changes do not rule out future appreciation in prices. Mr Alastair Tong, senior manager of marketing, recruitment and training at HSR Property Group, says these measures were not put in place to prevent growth in the property market.

'These measures are made to ensure that we are able to have a stable and sustainable market.'