Ms Tan wanted to buy a resale three-room flat for her twilight years, but the new property regulations have put a spanner in the works.
The retiree told Lianhe Wanbao that she owns a private property, but she wanted to move into a Housing Development Board (HDB) flat and rent out her private property to supplement her retirement income. Living in an HDB flat will also help to lower her monthly expenses.
Unfortunately, her plan is unfeasible after HDB announced that private property owners who buy HDB flats have to sell their private properties within six months of their HDB purchase.
Many existing property owners who were in the process of buying a second property were also affected when new regulations were announced on August 30.
Quite a few had to re-evaluate their finances as the minimum cash outlay has now been raised to 30 per cent of the value of the property.
The changes caught even industry insiders by surprise, and the implications are still sinking into the market.
Lianhe Wanbao and Chinese radio station 100.3FM asked the principal consultant of Propnex, Mr Lim Yong Hock 10 questions from readers and listeners.
How many people are affected by the changes?
Many people will be affected, it just depends on the degree. After the change in regulations, many people will change their minds about buying resale flats. Add to that the fact that more new flats will be built, the demand for resale flats will definitely fall, and price will also fall in tandem.
How much will prices fall by?
Based on past and current trends, prices will fall about 10 per cent this year, and 20 per cent next year.
Should I buy or sell?
With the new rules, it is a better market for home buyers than sellers, so buyers should take the opportunity to negotiate a good price for their dream home. Buyers should not be too inflexible, as prices will most likely fall with increased supply.
I have an HDB flat, but I’ve also paid a $5,000 deposit for a private property. If the new rules affect me, can I retrieve my deposit?
Usually once the deposit has been paid, only buyers who do not get HDB’s approval will have their deposit returned. You are not likely to get the deposit back if you are the party who changes your mind.
I already have a private property, and I also bought a resale flat, but will only collect the keys next week. Will I be affected?
As long as you registered the purchase before August 30, you will not be affected.
I signed the contract two weeks ago, but my agent only processed my application with HDB on August 30. I feel that this is negligence on the part of the agent, can HDB make an exception for cases like mine?
This case a bit more complicated. If you had an understanding with the agent that the application was to be immediate, then it may be the fault of the agent. However, sometimes the delay could be due to the seller. It’s best that all parties meet to discuss the issue.
As a first time buyer, how will I be affected?
The new rules are good news for first time buyers, as property prices are likely to adjust downwards. Loan terms now favour first time buyers as well.
I have a property overseas, but now I want to buy an HDB flat. Do I have to sell my overseas property?
Yes, overseas properties are also affected.
I have a four-room HDB flat and a private property. Now I would like to upgrade to a five-room flat, should I?
Under the new regulations, you have to sell your private property within six months of buying your new flat. It is not a good time to change your property now.
Will the rental market be affected by the new rules?
Rents should stay stable as long as the immigration policy is not changed.
Source : AsiaOne – 4 Sep 2010