National Development Minister Khaw Boon Wan’s speech in Parliament on the changes of HDB resale flats has many property owners in an uproar. The rules has been changed so that HDB will only accept valuation requests from resale flat buyers or their appointed salesperson, after buyers have been granted an Option to Purchase (OTP) by the sellers.
Basically, the HDB expect the buyer and seller to come to an agreement first before going to the HDB. Also price negotiations for HDB resale flats will now be based on recent transaction prices instead of Cash-Over-Valuation (COV) figures.
Many property owners are unhappy about this as this move would probably force property prices down and Singaporeans who have recently bought their flats with the view to sell their flat for a profit after the 5 years minimum occupancy period would find that their property is not worth as much as they had hoped. I’m not a property owner so I’m on the other side of the equation.
I’m all for this move by the Mr. Khaw. There are 2 main reasons for this;
- Property prices have remain stubbornly high despite all the cooling measures and a move like this will force it down
- Property prices have remain stubbornly high despite all the cooling measures because property owners in Singapore have the assumption that Singapore property prices will never come down.
If you bought a property to resell after 5 years, it is call an investment and there is no such thing as a sure-thing. The moment you bought a property with a view to flip it after 5 years, you are taking a risk. Don’t complain if the risk didn’t play out.
In fact, I think the moves by Mr. Khaw didn’t go far enough. Under the new rules, the buyer and seller need to request for a valuation from the HDB after coming to an agreement. That doesn’t make sense to me. I know they did this as a way to stop the prices from going down too much but why would the buyer and seller need to go to the HDB after coming to an agreement already?
To me, it seems that the HDB are trying to have it both ways. They want the price to go down but also want a way to prevent it from going down too much. Too bad they didn’t think of this when prices were going up.