Resale HDB in Singapore: Expectations vs Reality

Expectations vs Reality

In the resale HDB market, the previous year was outstanding with prices jumping by 12.5% for the entirety of 2021.

Only a few weeks before the end of the year, the government announced that the number of BTO flats that will be introduced in 2022 and 2023 will be increased. In addition to that, the maximum allowed loan-to-value ratio for HDB home loans dropped from 90% to 85% when buying a resale HDB.

Following this, we sought the opinions of real estate professionals regarding the resale HDB market. This article is based on the expectations of people and the reality of price increases for the upcoming year, the impact of reduced LTVs on HDB housing loans, and the impact of COV as well as the SERS/VERS.

Growth of Resale HDB Prices


The growth of resale HDB prices and the HDB selling prices will remain as high as in the previous year, thus making it a much more profitable investment sector in days to come.


Experts expect a price increase of between 4% and 8% this year. Although HDB plans to increase supplies this year, the resale volume of HDB properties is expected to remain strong. However, this year's total is expected to be smaller than last year's. Double-digit growth, according to experts, is unsustainable.

Impact of the Reduced LTV

Growth of Resale HDB Prices

The government announced a new wave of cooling measures soon before midnight on 15th December 2022, following a strong property market. This includes lowering the LTV for HDB loans from 90% to 85%.


There is evidence that lowering the loan-to-value ratio will calm the resale market, according to the government’s policy. But the experts believe it will have a minimal impact on the resale prices. To put it another way, they point out that, when compared to the LTV of banks' property loans, 85% LTV is still quite high. The loan-to-value ratio (LTV) for bank loans now stands at 75%.


It's also a preemptive move to encourage more prudent financial behaviour, experts say, adding that a 5% LTV drop would have little impact on affordability. While they think it will encourage more cautious purchasers, they also believe that the effect will be more diverse depending on who is purchasing the property.

The most affected will be those buyers who have a tighter cash flow. People with a good amount of savings or the ones who can get financial assistance from the likes of their family members may find it easy to generate enough money in order to go for HDB loans.

Cash Over Valuation Impact

Negotiation between buyers and sellers is allowed in the resale HDB market, and Cash Over Valuation (COV) is the additional money customers have to pay in excess of the market value of the property for resale HDB transactions.

For example, there is a $20,000 difference between the selling price and an HDB unit with a valuation of $520,000. HDB loans of $500,000 can only be used for a 90% down payment. It's called "Cash Over Valuation" because the extra $20,000 must be paid in cash.

This is due to the fact that banks and the HDB set the loan amount based on market value rather than the selling price of the HDB. It was a tool for negotiating pricing in order to maximise a seller's profit and is one of the factors why resale HDB prices climbed at an exponential rate.


Due to COV, the buyers always had an edge to get a more profitable deal and get a healthy resale value. It was expected the remain this way until the government decided to remove the COV to make the flats more affordable to less-privileged buyers.


Therefore, HDB has announced that they would no longer publicise COV pricing. Instead, purchasers will be required to submit requests for valuation only after they have reached an agreement with the seller over the price.

If you come to an agreement on a price that is too high, it is possible that you will wind up having to pay a higher total amount in cash. Because of this, the majority of potential purchasers now feel anxious about the prospect of having to pay a sum of money that is significantly higher than the property's valuation.

About 80% of HDB used flats were sold with ZERO COV by the end of 2016, and in today's market, buying without COV has essentially become the standard – this has contributed significantly to the low price of HDB used flats.

Sellers will be negatively affected by this new restriction, which is good news for first-time homebuyers. Selling flats at a high COV has become increasingly difficult for sellers.

SERS and VERS Impact

SERS and VERS Impact


Residents in Singapore have long worried about what will happen after their 99-year leases with the HDB expire. HDB apartment owners had hoped and assumed that a programme comparable to the Selective En-bloc Redevelopment Scheme (SERS) would be offered to them.

In addition to replacing your old HDB apartment with a new one, SERS extends your lease to a new 99-year term and compensates you generously in the process.


The Voluntary Early Redevelopment Scheme (VERS) was disclosed in 2018. In the event that an HDB flat is more than 70 years old and their neighbourhood is selected for VERS, owners have the option of voting the government to buy back before their leases expire. However, it is anticipated that the compensation will be lower than SERS's pay.

Concluding Remarks

The direction of a price trend is almost never a straight line; rather, a trend is made up of upward and downward curves that move in cycles. Thus these trends of high resale HDB come once in a while and are not sustainable for longer periods of time.

The factors discussed in this article mainly resulted in the relative lowering of the resale prices of HDB flats yet they can only have a minimal impact on the individual cases due to their case specificity. Strong indicators that contribute to determining the selling price include the property's location, the possibility for future development, the timing of the acquisition, and the dynamics of the unit.

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