Avoid the worst time to sell your HDB

/ Developers, HDB, URA, The Edge Property
May 23, 2015 8:00 AM SGT
Owners planning to sell their Housing & Development Board (HDB) flats would be wise to study the supply situation and avoid certain peak periods which may weaken their bargaining position. These peak seasons may arise when buyers of executive condominium (EC) dispose their existing HDB flats once they receive keys to their new homes. For instance, more than 6,000 EC units are expected to be completed in 2018, putting the year in the alert zone.
Under HDB rule, upgraders must sell their existing HDB flat within six months from the issuance of the Temporary Occupation Permit (TOP) for the EC. Buyers whose ECs received TOP in 1Q15, for example, would have to sell their existing HDB flat by 3Q15. Such restriction could result in a surge of HDB resale flats entering the market in certain seasons, tipping the market in favour of buyers and putting sellers in a disadvantaged position.
Surveys on certain EC projects showed that such upgraders may account for more than half of new EC buyers. An anticipated 8,800 HDB resale flats therefore could enter the market from now until 4Q19, based on half the 18,083 EC units receiving TOP between 4Q14 and 4Q19. The bulk of these or 3,400 resale flats will come on-stream in 2018, followed by 1,800 units in 2016 (see Table 1 and Figure 1). To put things in perspective, they represent 20% and 11% of total HDB resale volume in 2014 respectively.
Table 1: Estimated TOP dates of EC projects and disposal of HDB flats
Source: Developers, HDB, URA, The Edge Property
Against this backdrop, sellers might consider putting their units on the market this year instead of 2016 to avoid head-on collision with these upgraders. Another incentive in favour of selling this year would be the clipping of Build-To-Order (BTO) supply from 22,455 units in 2014...