Is Now the Best Time to Buy an HDB Flat? Experts Say Yes!

Is Now the Best Time to Buy an HDB Flat? Experts Say Yes!

Research of market dynamics since the beginning of 2019 suggests that now may be the right time to acquire an HDB resale flat.

In March 2019, the rental volume of HDB resale flats increased by 26.1 per cent because prices have been going down. This is the highest volume since August 2018.

Property transaction trends are also quite indicative. The total number of HDB resale transactions reached 1,657 flats. In comparison, the number of resale flats sold in February was 1,314. Some experts attribute the increase to seasonal reasons but according to others, additional factors are to be taken in consideration.

Factors Making the Time Right for HDB Resale Flat Purchases

The increase on a monthly basis is way too significant to be attributed to season issues alone. According to Singapore real estate professionals, a few other key factors contribute to the favourable climate at the time being.

As per an official announcement, only one executive condominium (EC) launch will take place in 2019. At the same time, many HDB flats will be reaching their minimum occupancy period (MOP) during the year. This means that the number of resale options will keep on increasing.

In addition, the HDB resale prices have been going down for five consecutive years already. The increased number of available flats obviously affects market dynamics. Hence, the volume of transactions is anticipated to continue growing because of the ideal conditions for acquisition right now.

Resale is currently shaping up as a more attractive option than EC due to financing possibilities, as well.

There has been a reduction in the Singaporean official loan to value ratio (LTV). Bank loans are set to 75 per cent of the property value. HDB loans, however, are a viable alternative. An HDB loan comes with a much more favourable LTV of 90 per cent. Hence, the availability of funds for property acquisition is going to make numerous Singaporeans choose HDB resale flats.

To sum it up, HDB resale flats are affordable. At the same time, there’s a lot of availability. It gives property seekers a chance to find the exact apartment of their dreams, prompting many of them to move forward with this major decision.

March 2019 Marks a Major Trend

As already mentioned, March 2019 marks the highest jump in HDB flat resale volumes over the past eight months.

The number is still lower than the number of transactions carried out in March 2018 – 1,897 flats. The decrease on an annual basis is 12.7 per cent.

March is typically a strong month for resale transactions. In March 2018, the resale volume increased 58.7 per cent on a monthly basis. In March 2017, the increase was even more significant – 75.4 per cent.

Resale transactions are anticipated to pick up even further in the months to come, The Straits Times report suggests. Resale prices have also increased slightly – 0.2 per cent – in March. This is another trend in evolution that could continue shaping up the market in the months until the end of 2019.

The increase in prices, however, isn’t that significant. Prices are still 13.7 per cent lower than the peak reached in April 2013. Those numbers once again confirm the fact that the resale property market is quite favourable, making purchases cost-efficient and potentially profitable in the future.

Older flats are currently most affordable, which is nothing but natural.

Final Verdict: Buy Now?

If you’re looking to acquire an HDB resale flat, the time is now.

What property should be investing in? The answer depends entirely on your goals.

Research shows that over a 15-year period, four-room flats have appreciated the most. The price increase is 78 per cent and the current average price of a four-room flat is 425,275 dollars (in comparison to an average of 238,300 dollars in 2004).

Three-room flats appreciated by 69 per cent and five room flats appreciated the least – 68.5 per cent. While there are some regional differences, the overall trend remains valid throughout Singapore.

Apart from the investment potential, however, you should also be paying attention to other key essentials. Your individual needs, the current state of the HDB flat and the cost needed to renovate your new home , your interior design needs,  location and the availability of infrastructure/nearby amenities will also determine whether one HDB resale flat or the other is the right choice for you and your family.

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