According to the Urban Redevelopment Authority’s statistics, 7,169 of these purchasers purchased resale and new condos in the first three quarters of 2021, up more than 21% over the same time the previous year. The quick surge in Housing and Development Board (HDB) resale prices have made it easier for HDB upgraders to purchase private residences.
This is due to the fact that HDB resale prices have risen faster than private property prices over the last year, according to Nicholas Mak of ERA Realty Network.
HDB selling prices increased 9.1% in the first 9 months of 2021, compared to a 5.3 percent increase for private dwellings.
Low mortgage rates, a reviving economy, and new demand resulting from delays in the construction of Build-to-Order (BTO) flats have all contributed to the strong resale flat prices.
In particular, as of 31 October, 192 resale apartments sold for at least $1 million, compared to 82 such HDB units sold for the whole year of 2020.
According to Christine Sun of OrangeTee & Tie, who was cited by ST, “some are also purchasing now because they anticipate prices to trend higher, in light of the rebounding global economy and a shrinking supply of new condominiums.”
Resale condominiums were more popular among HDB upgraders, accounting for about 62 percent of the 7,169 transactions.
Ong Teck Hui, Senior Director of Research and Consultancy at JLL Singapore, ascribed this to the lower cost of resale condominiums compared to new condos.
According to PropNex, the number of resale condominiums sold to HDB upgraders increased by 119 percent to 4,212 units in the first nine months of 2021, compared to 1,924 units in the same time previous year.
Meanwhile, compared to the same time last year, the number of new condominiums sold to such purchasers increased by 26% in the first nine months of 2021.
The Central Provident Fund (CPF) laws and proximity to family are two of the reasons given for upgrading to condominiums.
A 54-year-old school support staff worker, Nabisah Abdul Kadir, opted to move to a new apartment a year before her 55th birthday, when new CPF withdrawal limitations take effect.
Nabisah sell off her four-room HDB apartment at Pandan Gardens for $410,000 in September and received a $1.5 million loan to buy a three-bedder at Twin VEW condo. In January, she will get the keys to her apartment.
“This is the greatest moment to sell my apartment since I’ll be 55 next year and won’t be able to spend all of my CPF funds for housing payments on a new home,” she told ST.
“Their CPF Retirement Account is built using contributions from their Special and Ordinary Accounts to match their appropriate retirement amount once eligible Singaporeans turn 55,” according to ST.
“They will also be immediately enrolled in the CPF Life plan, which pays participants a monthly dividend for the rest of their lives provided they satisfy the requirements,” it said.
The money in their Ordinary Account may be utilized to pay down their mortgage.
Nabisah’s new apartment on the 21st floor not only has a sea view, but it also has a view of her mother’s unit in Pandan Gardens.
“I chose the Twin VEW since it is close to my mother’s home. “Only the Pandan River separates us,” she said.
Mariam Ibrahim, a primary school teacher, chose to sell her four-room flat in Toa Payoh and buy a one-bedder in Treasure at Tampines for $790,000.
And, although she explored purchasing a larger three-room resale apartment, she decided against it since she did not want to deal with a major remodeling project.
“I’m prepared to give up room as long as I don’t have to perform a major renovation and service both a mortgage and a renovation loan,” she added.
