Should You Sell Your HDB flat in 2024?
At Youhome.sg, I have experienced a fulfilling year of opportunities along with the winds of change – with me adapting to new ways we service and provide consultations to my clients and finding a great new balance among it!
Looking at the price index for the past few years, HDB price increased more than 33% from 2020 to 2024.
There are several factors and expectations that could shape the HDB Price Index trends:
Impact of Economic Conditions: The broader economic environment significantly impacts housing prices. If Singapore’s economy continues to grow and employment rates remain stable or improve, we might see an increased demand for housing, potentially pushing the HDB Price Index upward. Conversely, if the economy faces challenges, such as inflationary pressures or global economic downturns, there could be a dampening effect on housing demand and prices, possibly stabilizing or lowering the RPI.
Government Housing Policies: Changes in government policies related to public housing can directly affect the HDB price index. Measures to increase the supply of new flats, adjustments to housing grants, changes in eligibility criteria for buyers, or modifications to cooling measures can influence buyer sentiment and market demand, thereby impacting resale prices. For instance, increased grants or eased restrictions for first-time buyers could spur demand, leading to a rise in the price index.
Demographic and Social Trends: Demographic shifts, such as population growth, changes in household formation rates, and preferences for certain types of housing (e.g., proximity to schools, amenities, or parents), can influence the HDB resale market. For example, if there’s an increasing trend towards smaller household sizes or a preference for living in mature estates, this could affect the demand and prices for flats in specific locations differently, thus impacting the overall price index.
It’s important to note that the HDB price index is influenced by a complex interplay of these and other factors, including global economic trends, interest rate movements, and the supply-demand balance in both the public and private housing markets.
Predicting exact trends requires a comprehensive analysis of these dynamics.
If you are a homeowner or property investor who put a hold on your plans in the past, now may be the time to plan ahead and decide if there’s an opportunity to make a change!
To help you focus your efforts, I’ve consolidated the considerations for 3 common groups of property buyers and/or sellers:
- HDB reach (MOP): To Sell or Not To Sell?
- Upgrading Plans: Bigger HDB Resale or Private Property?
- Down-sizing Plans: Can Downsizing Help to Reduce Financial Commitments?
Feel free to skip ahead to which section is relevant to you!
Table of Contents
1. HDB reach (MOP): To Sell or Not to Sell?
If you have a BTO that is approaching the end of the much-awaited 5-year minimum occupation period a.k.a MOP, you might have heard from your friends or family urging you to sell the flat quickly before the prices dip.
Worried? Before you make a rash decision based on hearsay, let’s look at some numbers to help you decide:
Please take note of the following: Only properties within the age group indicated during the time frame are used in the study.
For example: For an 11 – 20 years study, if a HDB is 20 year old in 2016, it is excluded from the study in 2017 when it reaches 21 year old.
Here is a case study based on the resale price index of Bukit Merah HDB flats in four different age brackets –
- 4 to 10 year-0ld (just after MOP period);
- 11 to 20 year-old;
- 21 to 30 year-old; and
- 31 to 40 year-old
Let’s look at how these different groups perform during the past 10 year trends
The growth rate for Bukit Merah HDB flats, from 4 to 10 year-old
What you need to know – 3.15% growth per annum average. (This is above CPF accrued interest rate)
The growth rate for Bukit Merah HDB flats from 11 to 20 year-old
What you need to know – 3.8% growth per annum average. (This is above CPF accrued interest rate)
The growth rate for Bukit Merah HDB flats from 21 to 30 year-old
What you need to know – 5.62% growth per annum average. (This is above CPF accrued interest rate)
The growth rate for Bukit Merah HDB flats 31 to 40 year-old
What you need to know – 1.93% growth per annum average. (This is below CPF accrued interest rate)
Here’s what the numbers show:
- For flats sold (4 to 10 years age), the median price shows an appreciation of 3.15% per year.
- In contrast, for flats that is sold after 30 years old, the median price show appreciation of 1.93%, way below CPF accrued interest of 2.5% per year.
Question! Why is appreciation below CPF accrued interest important to you?
The reason is because HDB Negative sales happen when the selling price of a flat is lesser than the outstanding loan and CPF with accrued interest combined.
Read more about CPF accrued interest.
Conclusion
Prices do depreciate as the flat ages – but not immediately after MOP – so there is definitely enough time for you to do your necessary research and to prepare for a move within the immediate year or two after MOP.
Prices do depreciate as the flat ages – but it will not be immediately after MOP – so there is definitely enough time for you to do your necessary research and to prepare for the move within the immediate year or two after MOP.
If you delay a sale and your flat’s price depreciates, you will end up with much lesser cash proceeds (that can be used for your next purchase).
In some cases, we have seen a difference of up to $100,000 reduction in profits just because of a delay in sales.
So, don’t let yourself make this mistake!
2. Upgrading Plans: Bigger HDB Resale or Private Property?
a) Upgrading for more space
Are you working from home a lot more since the new normal and need more space to avoid distractions while at work? Or have you since welcomed a new addition to the family?
If so, 2024 may be a good year to consider upgrading to a larger space at home with more space for everyone!
With a relatively strong HDB resale market, it is most definitely a good sign to sell and lock in the cash profits to channel into either an older and bigger HDB resale or private property.
b) Upgrading for investment
Looking to upgrade for investment and capital appreciation?
Let’s take a look at how different categories have been performing for the past 5 years.
Comparing the 10-year price trends different between HDB, EC, Private (non-landed) and landed:
HDB overall performs the lowest compared to the rest.
2024 may be a good year to consider upgrading or property wealth planning
3. Down-sizing Plans: Can Downsizing Help to Reduce Financial Commitments?
With the pandemic wreaking havoc on the economy, it is inevitable that many have their livelihood significantly impacted.
If your livelihood has been affected, and you are looking for ways to reduce your financial commitment or even unlocking potential proceeds from your home, downsizing can be a possible option for you.
If you are a property investor who is seeing less than optimal returns on your property portfolio due to the economic downturn, and hope to reduce your monthly mortgages, it might be helpful to look at restructuring your property portfolio.
While it may be a difficult decision to make, downsizing is definitely an effective way to help reduce financial commitments in the long-term.
With the right professional guidance and help you navigate around taxes, fees and any other hidden costs, downsizing can be a smooth and painless process for you.
Selling and buying HDB at the same time
A joint effort by HDB and the CPF board, it allows sellers to sell their existing HDB flat and concurrently buy another HDB resale flat using the proceeds (as well as the refunded CPF monies).
For HDB owners that are considering selling and buying hdb at the same time, you can consider using hdb contra. (read more to find out)
We hope this article helped to shed some light on possible opportunities and options for you if you find yourself in any of the above 3 situations!
What about you?
How do you envision your dreams becoming a reality?
Are you eager to learn the options available?
Bonus for my readers
As a special bonus for our dedicated readers, I’m thrilled to offer a complimentary discussion session for anyone contemplating whether 2024 is the right time to sell their HDB flat.
This is your chance to get personalized advice tailored to your unique situation, market trends, and future goals. Whether you’re wondering about the best timing, need insights into the latest property market dynamics, or just want to explore your options, I’m here to help guide you through the process.
Don’t miss out on this opportunity to make informed decisions with confidence.
Topics I will cover during the discussion:
- Market Trends and Forecasting
- Regulatory Changes and Policies
- Financial Planning and Strategy
- Home Staging and Presentation Tips
- Navigating the Sales Process
Remember, there’s always something you might not know yet.
Awards and Accolades
Property agent review - What my clients say about me
Self Introduction
Greetings! My name is Rick Long, and I am proud to serve as the Associate Division Director of Huttons Asia Pte Ltd, with over a decade of experience in the real estate industry.
My passion for helping clients find their dream homes has grown exponentially during my tenure in the field. As a graduate of Singapore Polytechnic, I have always valued the importance of hard work and determination.
My prior experience serving in the airforce instilled in me the value of teamwork, perseverance, and discipline.
Over the years, I have been privileged to receive several accolades for providing exceptional service and dedication to my clients.
My ultimate goal is to ensure that each individual I work with has the best possible experience, whether they are buying or selling a property.
One of the most rewarding aspects of my work is receiving glowing five-star reviews from satisfied clients.
Knowing that I have positively impacted someone’s life is truly humbling, and it motivates me to continue striving for excellence every day.
When I am not working, I enjoy spending quality time with my loved ones, indulging my passion for sports, and exploring the rich and diverse culinary landscape of Singapore.
Amidst the bustling pace of life, I relish moments of calm by immersing myself in the art of tea-brewing and teapot appreciation.
Thank you for taking the time to learn a little more about me. I look forward to the opportunity to work with you.
Additionally, Rick is a proud fur daddy to two rescue kitties and loves spending his free time with his wife and furbabies. He believes in giving back to the community and volunteers his time to animal welfare causes whenever possible.
Related Articles:
Ever wonder if you are suitable for Sell one buy two investment concept? – Read more (Sell one buy two)
Is buying new launch or resale condo have better returns? – Read more (New Launch vs Resale condo)
Looking to upgrade from Hdb to condo? – Read more (Sell Hdb buy condo)
What to take note when selling Hdb resale flat? – Read more (Hdb Resale Process)
Buying another Hdb flat, and using the fund from current home? – Read more (Hdb contra)
Why do some Hdb flat price depreciate so much? – Read more (Hdb depreciation curve)
What is one of the most common reason for property negative sales? – Read more (Cpf accrued interest)
Financial calculation for selling a Hdb flat? – Read more (Hdb resale calculator)
Buying EC before selling your HDB? – Read more (Upgrade to EC before selling your HDB)
Should you sell your EC after 5 years? – Read more (Selling EC)
Should you sell your MOP HDB after 5 years? – Read more (Selling HDB after mop)
Property Wealth Planning – Read more (What is property wealth planning?)
