In the latest numbers released by HDB, it showed the number of permanent residents (PRs) purchasing resale HDB flats in the secondary market has shrunk. This comes at the back of various measures and policies implemented in 2013.
Shrinking numbers
From September to December 2013, there were 528 resale flats purchased by PRs. This constitutes 12% of the entire resale transactions. From January to August, 2,581 transactions were made by PRs which was about 20% of all HDB resale transactions.
Why is this happening?
In August 2013, HDB announced that PRs must wait for 3 years after obtaining their PR status before they can buy a HDB flat in the secondary market. In addition, loan tenure was reduced to 25 years while Mortgage Servicing Ratio was introduced.
What do you see?
From January to August, the HDB resale market saw PRs buying flats at a rate of 322 units per month. That was about 10 units a day. After the cooling measures were implemented, the rate is now 176 units monthly or almost 6 units a day. While 2013 is not over yet, it’s safe to assume this metric will not change much. From 10 to 6 a day, this translated to 40% drop.
Assuming we could see the same steady rate before the measures, it’s worth wondering what’s happening to the 40% potential PRs buyers. Will they continue to rent, while waiting for prices to drop or purchase private apartments? How many PRs are affected with the 3-year wait policy? And again, how are they settling the accomodation needs?
We hope these questions tickle your brain, before you chill out during this holiday period and cool weather. Comments are welcomed on FindaHomeLoan.co Facebook page.
Contact us today for the best mortgage advice!
