Downgraders’ 15-month wait will moderate demand for HDB resale flats: Desmond Lee
Downgraders’ 15-month wait will moderate demand for HDB resale flats: Desmond Lee. According to National Development Minister Desmond Lee, the 15-month wait-out period imposed on current and former private property owners will control demand for Housing Board resale flats and keep them cheap, particularly for first-time home buyers.
This is because private residential property owners often have greater resources to purchase resale apartments than first-time home purchasers or existing HDB flat owners, according to Mr Lee in a video statement posted on his ministry’s YouTube website on Friday evening. “Some buyers may not even require financing to complete their acquisition. As a result, when they acquire resale flats, they tend to pay more in cash over valuation (COV) “He stated.
COV is the difference between a resale flat’s sale price and its real HDB valuation. The buyer can only pay the difference in cash. Private home owners must wait 15 months following the sale of their current property before purchasing a non-subsidised HDB resale apartment as of Friday. Those aged 55 and above who are transferring from a private home to a four-room or smaller HDB resale flat, a two-room flexi flat, or a community care apartment designed for seniors are exempt.
According to Mr Lee, HDB would also exclude those with legitimate housing needs or who suffer mitigating circumstances on a case-by-case basis. “We expect for this to be a temporary remedy. We will reconsider this based on overall demand and market changes “Mr Lee was referring to the 15-month waiting period. As both the HDB resale and private housing markets show signs of overheating, the current round of cooling measures attempts to nip overborrowing in the bud. It comes barely nine months after the last set of measures was put in place.
On Friday, two major changes to the maximum amount that can be borrowed for a home loan went into effect. The first is to raise the medium-term interest rate floor, which is used to calculate and analyze borrowers’ ability to repay and therefore qualify for a loan. The second is lowering the loan-to-value limit, which means purchasers can borrow less from HDB to finance their property purchase than previously.
Click the image to read the full details of report:
Discover Your Home Here
Come & Experience It Yourselves
Connect With Us