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Title: Older Singapore HDB flats back in demand after CPF rule change
Author: English Cambodia News
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The Demand for ageing Housing & Development Board (HDB) flats is on the rise in Singapore, two months after the authorities changed C...

The Demand for ageing Housing & Development Board (HDB) flats is on the rise in Singapore, two months after the authorities changed Central Provident Fund (CPF) rules to expand the pool of people who can buy them.

Some 564 flats aged more than 40 years changed hands in May and June, up from 403 in the same period last year.

Transactions for flats between 30 and 40 years old rose 10.4 per cent to 1,219 units over the same period.

This means that older flats – those over 30 years old – made up 44.9 per cent of the total resale transactions in those two months, up from 40.6 per cent last year.

Christine Sun, head of research at real estate agency OrangeTee & Tie, which compiled the data in its half-yearly report, on Tuesday said the second quarter usually sees more sales.

But the fact that resale transactions have also increased – by 5.6 per cent year-on-year – shows that "apart from a seasonal effect, the recent CPF changes may have been a major catalyst that has spurred buying demand last quarter".

Since May, buyers have been allowed to use more of their CPF monies and get bigger HDB loans for ageing flats, as long as the property's remaining lease covers the youngest buyers until the age of 95.

Previously, CPF usage and loan disbursement were based on a flat's remaining lease.

At the time, analysts said the move would widen the pool of buyers who can use CPF to buy older flats, especially older buyers.

But they said it may also deter younger buyers from purchasing flats with leases that they may outlive.

According to OrangeTee & Tie, the policy change also appears to have benefited owners of bigger and older flats.

The number of transactions for four-room flats over 40 years old rose 53.5 per cent from May and June last year to the same period this year. Five-room flat sales increased 54.5 per cent.

However, transactions of similar-sized younger flats – between 10 and 30 years old – dipped by 4.4 per cent for four-room flats and 15 per cent for five-room flats.

While the transactions of flats under 10 years old also increased substantially over the same period, Sun said the uptick can be attributed to a surge in the supply of flats reaching their five-year minimum occupation period, rather than CPF policy changes.

The firm found that mature estates like Bukit Batok, Geylang and Bedok saw the highest year-on-year increase in resale transactions for older flats.

In its report, OrangeTee & Tie added that the data findings are in tandem with its agents reporting a rising number of inquiries about older flats.

They have also noticed more collective-sale owners turning to such flats after collecting their sales proceeds.

The report added: "Some may regard older flats as affordable, given their lower price quantum and large living spaces, and they get to keep a sizeable amount of sales proceeds for retirement or re-investment.

"With more public education, concerns surrounding the lease decay issue may start focusing on a new narrative that emphasises the importance of financial and retirement planning when a buyer makes a property purchase.

"With a new perspective, older flats may see a revival in demand. More liquidity would a THE STRAITS TIMES (SINGAPORE)

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