Tuesday, May 1, 2018

A Singaporean Woke Up to Find her HDB Flat is Worthless

Those who continue to sleep with PAP leaders will soon wake up to the reality of worthless HDB property they are holding on to. All their sweat and blood from years of toiling are now a piece of worthless concrete. Their CPF going missing in thin air.






In a rare admission by state media CNA yesterday (May 13), the 151st-ranking media published an article confirming that ageing HDB flats are now worthless with no interested buyer.

An owner of a 5-room HDB apartment in the central district of Ang Mo Kio was featured complaining that there is no buyer when she put it up for sale. She was unable to sell because her apartment is 37 years old now:

"We have all the necessary conveniences like coffee shops and wet markets nearby. It’s a really friendly neighbourhood with a cosy feel and it is also really convenient to get to town from here. Last year, when I approached a property agent with the intention of selling her flat, the response was poor. After realising that the lease of the house was reaching its 40-year mark, most buyers weren’t keen at all. They were afraid they might not be able to sell it off in the future. Even though the flat is spacious and opposite Bishan Park and near prestigious schools, no one wanted to buy."

The state media then reposted the comments of Minister Lawrence Wong, reminding Singaporeans that when the 99-year HDB lease is up, the property will be confiscated by the government. CNA also warned Singaporeans not to rely on En Bloc Redevelopment, because only 4% of the HDB flats due were selected.

There are currently about 70,000 HDB apartments that are more than 40 years old, and most of them are in Geylang, Jurong East and Queenstown. Real estate agents in these areas have reported a 20% losses in resale value for HDB owners.

The CEO of Institute of Estate Agents, Tracey Wong, also warned Singaporeans that HDB owners need to look at new CPF Withdrawal Limits to know how much CPF funds can be used to finance mortgages:

"We have to educate sellers of these older flats that with the Central Provident Fund (CPF) Withdrawal Limit imposed, younger buyers are no longer keen. We then ask the sellers to be more realistic in their sale price in order to attract buyers. The CPF Withdrawal Limit places a cap on how much a buyer can tap on his CPF for property purchases. The shorter the lease of a flat, the less CPF can be used."

The CPF Withdrawal Limits demands that Singaporeans buying resale flats to pay mortgages in cash for any excess above official valuation. For example, if a resale flat is valued at S$400,000 but it's sale price is S$450,000 (common for flats in mature estates), only S$400,000 from the CPF can be used inclusive of the deposit. The remaining S$50,000 will need to be paid in cash, unless one meets the Basic Retirement Sum of S$90,500 (half of Full Retirement Sum). The only problem is that the Retirement Sum increases about 5% each year, making it harder for CPF owners to fulfil it (CPF interest rates pays only 2.5%).

Just last month, a government university academic called for Singaporeans to be banned from using their CPF money to pay for HDB mortgages, and to fork out only in cash. The "test balloon" was met with ferocious opposition from Singaporeans, with many condemning the government for making home ownership impossible.

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