- The Straits Times
Older homebuyers are snapping up HDB flats with less than 60 years’ lease left, following a new rule in May that lets buyers get bigger loans and use more CPF money if the flat’s remaining lease covers them until age 95.
A quarterly report published by real estate agency OrangeTee & Tie found that in the two months following the new rules, 40 per cent more flats over 40 years old (a total of 456 units) were sold, compared to the same period last year.
In particular, the sales of 4- and 5-room flats rose the most, it added.
These oldest flats accounted for 14 per cent of all flats sold between May and June – about a 3 per cent increase compared to last year.
Similarly, resale figures for flats between 30 to 40 years old rose about 10 per cent (a total of 1,219 units), and accounted for about 30 per cent of all flats sold in the period.
Conversely, sales of flats between 10 and 30 years old fell across the board.
The demand for flats below 10 years old also spiked last quarter, but the report said this was due to many of them reaching their five-year minimum occupation period.
Sellers can finally upgrade to private properties
While housing loans and CPF usage were previously pegged to a flat’s remaining lease, the new rules aimed to make it easier to buy and sell older flats.
Calling the new rules a possible “major catalyst that spurred buying demand”, the report said that mature estates like Bukit Batok, Geylang and Bedok saw the highest increase in resale transactions for older flats.
While sellers of older flats previously struggled to find buyers due to the flat’s depreciating value, the new spike in sales could help them finally upgrade to a private property.
Among those most likely to get older flats under the new rules were buyers who wanted to live near their parents in mature estates, the report said.
“Buyers could have faced loan restrictions previously, because the ability to obtain a loan depended on the age of the flat. But now, the buyer’s age is taken into consideration together with the balance lease of the flat,” it added.
Another group were buyers whose homes were chosen for En Bloc sales, and viewed older flats as more affordable due to their lower price and bigger size, the report said.