Investors have been obsessing over the prospect of inflation recently. As a result of the inflationary tailwind, property has become Singaporeans' favorite form of investment.
Singapore's real estate prices are, indeed, on an upward trajectory that appears inexorable. For the 21st month in a row, the HDB resale prices (2022) increased yet again in March 2022.
People looking to renovate their current home or purchase their first home are concerned about the rising cost of housing. Because of this, the ability to buy a home, especially a more expensive one, has been negatively impacted.
As a result, you may be perplexed as to how much buying a resale HDB costs and whether or not you can afford it given the uncertain nature of the property market's pricing.
Since this is a pressing issue, this article will help you understand and predict how to get the best prices for a resale HDB in Singapore.
Understanding the BTO’s Impact on Resale HDB
Many HDB properties for sale are former BTO flats that have been "promoted" to resale status after meeting their five-year minimum occupancy period (MOP). As a result, if you're curious about how much an HDB resale flat will fetch, look no further than its BTO counterpart.
HDB will always provide a price comparison in conjunction with a BTO launch. After analyzing the resale flat prices in the area, HDB compares those results to the BTO's launch price that same month. To put it another way: there is a 20% to 30% difference in the price of BTO and HDB flats.
To figure out how much you can expect to pay for an HDB resale flat, compare it to the BTOs that will be launching (or have already launched) in the area.
When it comes to BTO launches in Yishun, there were two in February of this year. The new Yishun Boardwalk's four-room flats cost between $276,000 and $374,000. Nearby flats sold for $495,00 and $458,00 a month later, respectively. From the highest BTO launch prices, that's about a 30% difference.
Using Data to Predict HDB Resale Prices (2022)
There are certain drawbacks to using BTOs as a comparison, although they are minor. Since BTOs are rolled out only once a quarter. Not only that, but the HDB resale flat you are contemplating may not be near a BTO launch, especially if you are searching for mature estates. In any case, don't worry, because there is still data available to help you figure out the price of an HDB resale unit.
There's no doubt about it: HDB resale flat pricing can be found on data.gov.sg, which is accessible to the general public for free. The pricing of HDB resale apartments traded since the 1990s up to the most recent month can be seen here. Because the data updates so regularly, there are no gaps in knowledge.
Using the data, you may narrow down your search by HDB characteristics such as flat type, location within the city, height, floor space, and even the name of the street. Data from HDB resale transactions near the resale apartment you're interested in can be used to quickly predict the average price.
Consider using HDB Map Services if you prefer a more visually pleasing method. A combination of the two is ultimately optimal for obtaining all of the info you could ever require.
However, this strategy has its limitations because each HDB resale property is unique. If the house's condition and possible remodeling costs aren't taken into account, the estimate may be off by a significant margin. But it's a solid starting point for determining what would be the HDB resale prices (2022) for Q4 considering the trend for previous quarters.
Predicting Through Bank Valuation Method
There are two ways to get a loan to buy a house in Singapore: either an HDB housing loan or a bank loan. Before you can get a housing loan, you need to know how much the HDB resale flat you want to buy is now worth. HDB or the bank will be able to tell if you can afford a house if they have this information. For this reason, the valuation stage is referred termed as such.
Before applying for an HDB home loan, you could get an HDB resale appraisal. That's no longer the case. A larger Cash Over Valuation (COV) was found to be due to certain sellers manipulating the system by overstating their valuations (COV).
Getting a home appraised has been moved to the very end of the home-buying procedure as of 2014 when this step was moved. The HDB will not give you an appraisal until you have agreed to purchase the resale unit at the agreed-upon price with the seller. To determine whether or not you must pay COV, the HDB valuation procedure is solely focused on this one question.
However, when dealing with a bank, things are handled a little differently. You do not have to confirm the purchase of an HDB resale flat first before the bank gives you an estimate of its value. If you're thinking about buying an HDB or several HDBs, you should speak with your bank about getting an appraisal of the property. At least from the bank's standpoint, this will help you estimate the worth of the HDB resale unit.
Even if the bank's appraisal of the property has certain problems, it should still be able to provide you with a pretty accurate estimate of the value of the HDB resale apartment. Then, as the buyer, you can decide how much more (or less) than the fair market value you are willing to pay.
Price Index of HDB Resale Prices
Flash estimates issued by HDB show that HDB resale prices (2022) Q2 climbed at an annualised rate of 2.6%, which is somewhat quicker than the 2.4% increase in the first quarter of the year.
Since the cooling measure taken by the authorities, HDB resale flat prices have increased at a slower rate, and sales momentum has slowed. Thus it can be predicted for Q4 of 2022 to have a growing trend for HDB resale prices yet at a slower rate than last year.