It's not a secret that Singapore’s housing market has always been red hot with demand, but it's safe to say we reached a new high point with the $1.295 million resale Bishan unit earlier in the year. Way to go Bishan.
It is very apparent that the pandemic has not curb the insatiable appetite Singaporeans have on owning housing. As 2021 heralds in the new norm that is endemic 2022, we are definitely still in it for the rollercoaster ride as recent announcements have caused a crazed ruckus in the housing market, one being the Prime Location Home (PLH) Model.
With more younger flats exiting their Minimum Occupation Period (MOP) and an offshoot demand for non-PLH units, both of which are ready to be moved into- the resale housing demand flurries with a frenzied momentum.
This is a short guide to buying a resale hdb unit, a piece of the puzzle that is Singapore’s public housing market:
It is obvious that the first thing you have to take note of would be the environment, and that entails a myriad of factors to consider. The environment or geography creates a surge in the price of housing in an exponential manner- a make-or-break option that really affects the popularity of certain units:
1. Many people would consider the amenities of the housing area based on their own needs for the foreseeable future- this includes access to public transport, schools, shopping malls, coffeeshops, etc.
It is advised to take the time to conduct fieldwork and double-check that certain spots are actually accessible. Singapore is definitely a fast paced country, this means that reservicing of amenities and construction sites pop out more often than you think, and they tend to last for a long time.
This would really affect your quality of life in the short term and long run. Take a walk around the neighbourhood, even test drive around to the amenities and see whether any peculiar situation arises!
You don’t want to purchase a unit because it has a direct route to your child’s school, only to realise the road is in reconstruction for the next few years.
Now that we know our vicinity is great, we have to check if our actual home has the same comfortability. This means ensuring that the home is liveable in the long run.
Many homeowners in such situations will look out for factors such as its direction towards the sun, accessibility to wind or rain, and maybe even considerations towards feng shui.
2. Direction towards the sun is important because you know the morning sun rises from the east and you will have to make precautions if you are not an early bird. An open window facing the east will mean that your home gets heated up very easily.
As a average Singaporean household, this means that you either endure the heat of the afternoon sun, or risk bursting your electrical bill turning the air-conditioner to the maximum.
3. Accessibility to wind or rain means that your home or its vicinity is properly covered with wet weather precautions. This means no leakage at any specific spots of the home, or your family has access to the amenities like car park and schools in situations of heavy rainfall.
This is especially so for buildings that are out in the open, as well as units located right at the top storey of the building.
4. This also side steps into the arena of feng shui as firm practitioners of feng shui will only prefer units that promote such factors.
Take a look at our article titled “10 BTO Feng Shui Tips for Every Room”!
5. A subset of the environment would be interpersonal spaces, that being the consideration of people living around you as well. An aged old advice from the elders would be to check the vicinity of your home for loanshark vandalism.
It is clear that no one wants to buy a home that is currently harassed by loan sharks, and sometimes devious homeowners might not disclose such a fact in attempts of absconding. This means also looking out for vandalism around your neighbours’ flat as well, since you don’t want secondary harassment for their financial debt.
Singapore is a safe country with one of the lowest crime rates in the world, so most estates are generally safe. However, it never hurts to look around and maybe indulge lightly in some neighbourly gossip of past petty crimes or problems!
6. Apart from wandering around to look for probable evidence, it is also advised to check in at different timings of the day since they won’t be reflective of the environment they actually are.
It is highly likely that the environment is slightly dolled up by the homeowner or realtor to make the deal.
There are many conditions to look out for, but the most informative ones would definitely be morning peak hour where the regional traffic stops might be jammed up, or the evening time where noise level is absolutely maxed out by a neighbours’ crying baby or hungry dog.
Checking for defects is a subset of the inspection of the home environment but this pointer relates more to the physical structures that you can see upfront without the clause of being time or space specific.
We do have an article on basic home defect checks specific to BTO defect inspection but the overall mantra parallels to a resale unit too, do check them out under “Easy Guide to BTO Defects”.
However, if you are time constrained during the home visit for whatever reasons, the top spots you have to check out are the following:
7. Firstly, ensuring no wall or water damage is very important. This goes back to our pointer on wet weather conditions as sometimes these signs of defect are especially obvious during rainy weather (due to prolonged damage).
This means that you can spot wet patches on the floor or ceiling, as well as obvious cracks or moulding that is a sign of a long term infestation. This would cost a lot to repair and fix!
8. Secondly, check out all the circuitry and water pressure of the facilities. Circuitry is important because a twenty-first century human craves electronics and you don’t want to live in a home that has useless powerplugs just because you did not check before you purchased the home.
It's especially not worth the hassle to rewire circuitry as it involves so much work! Water pressure is very important because compared to BTOs, a resale home unit has all its piping exhausted and will likely require additional maintenance, making it important to solve the issue before you move in.
9. Thirdly, if there is a lot of carpentry within the household that you do not intend on getting rid of, you have to check on its workability as well as sustainability.
This means going round to open and close all the doors to ensure that the carpentry is fully functional and does not jam on operation.
Further precautions involve checking the wood for mould, as well as likelihood of infestation with bed bugs or termites.
When it comes to purchasing a home, homeowners should definitely go all out and be “kiasu”. A home in Singapore is a big ticket item purchase and can set a person back a long time of financial debt until you have a takeaway, especially with the PLH set up to deter exploitation.
It is commonplace to do your research and ensure that you aren’t getting yourself into trouble with the new purchase. The most iconic trait of Singapore’s public housing is its 99 years shelf life, impoverished as the years go by.
A century old expirational timeline on a utilitarian purview might seem feeble, but actually has a significant impact if you break it down into a for instance.
10. For instance, purchasing a unit that is 50 years old means that you only have 49 years left to stay, and this results in a lesser number of available years if you ever are thinking of selling said home.
New buyers would be deterred from purchasing as no CPF can be used on a property with less than 30 years on its lease. The maximum amount of OA savings you can use to fund your home repayment is also largely a derivative of available years on lease!
It simply means that any home tilting towards the later end of its lease is less valuable, thus should go through much consideration if up for a purchase.
11. Furthermore, you should consider the amount of space available within the unit, and this doesn’t even limit you to square footage but also viable space. There are many differences between resales and BTOs, whereas most resale units tend to be larger and elongated than BTOs.
Buyers should definitely look out for usable spaces as a larger square footage with inaccessible corners effectively means a smaller liveable space. (Unless your interior designers can make magic happen with their functional spaces.)
This is a purely conjectural point with no direct parallel to any beliefs but it's always good to note the previous homeowners reason to sell. Under stigmatized property clauses, home units can be undesirable due to non demonstrable flaws.
12. Buyers should always ask the home owners if the property has had any issues with relations to its history, be it criminal altercations, probable suicides or claims of haunting. The general public can be superstitious in relation to these issues.
All of these might not even be supernatural in nature, but its implications highlight specific psychological or physical impositions related to the property that might affect your living there.
Property agents or homeowners could feign ignorance unlessl the buyers specifically ask, for which their replies could have legal repercussions if the day comes where the new homebuyers want to contend their problematic purchase.
It's hard to check out whether a unit has had issues in this genre especially since it's relatively non demonstrative. The easiest manner to do so is definitely ask around, be it the property agent, home owners or even neighbours. If it's at all possible, try newspaper clippings or archives of information.
After all, public properties are implicated with the government’s red tapes and you are expected to jump through all these rules like hurdles within a race, sharp and critical is always best.
13. Before you even embark on your quest to find a unit, you should check on your credit with the Credit Bureau Singapore (CBS) to generate a credit report, for which you can easily use to sieve out a general plan for your bank housing loan.
Vice versa, this applies for the HDB Concessionary Loan as well; A lot of administrative checks can hold you back so never put down an option fee/deposit until you really know you can get a good financial backing.
There really isn’t a point if you cannot financially survive with a heavy loan on an expensive home that crushes your spirit every single month, maybe a slightly more affordable BTO in 5 years might be a better option?
14. Now that you understand your general scope of pricing, look out for locations and amenities. It is definitely easier to understand what you are looking for in terms of long term accommodation than the prices of the units.
These are very commonplace filters to use but the one important piece people tend to forget is the Ethnic Integration Policy (EIP), for which the government imposes a racial quota within every block to regulate a proportionate mix of people from different backgrounds.
The understanding applies to the SPR Quota for non-Malaysian PRs as well. It is always good to check if the quota has been fulfilled before getting your hopes up.
15. Next is the Cash Over Valuation prices that have been plaguing resale units for years. Effectively they are the difference between the selling price of a resale unit set by the seller, against the actual HDB valuation of the flat, for which the difference is to be paid by the buyer.
The COV and HDB valuation has a lot of implications with the process of home procurement. This aspect of the trade has always been amorphous, resulting in skyrocketing prices that are egregiously exploitative, such as the maisonette in Bishan was sold with a COV of $250,000 in 2013.
This was only placed on careful eye up till 2014 when HDB stopped publishing valuations online and enforcing strict Option to Purchase regulations. As a whole, it's definitely good for potential resale home buyers to understand the concept of COV and how it affects their loans and purchases, for which are largely linked to the characteristics of their desired home units discussed at the start of the article.
With covid19 disrupting the supply chain and slowing down the progress of many BTO sites, more people are choosing to divert towards the resale market. Low interest rate, disappointing probability of ballots, and increased units exiting Minimum Occupancy Periods, are all major factors contributing to this phenomena.
There is much advice provided by experts, be it wait until the supply chain is much more stable or take a positive spin on it and accept the high consumer confidence for the future.
It is the prerogative of the potential homebuyers to know what they are looking for in the short term and long term, and decide what they need in spite of what the mainstream media or circle tells them to.