The Common Reasons HDB Homeowners Decide to Sell
In the past, it is common thing for HDB flat owners to hold on to their flats for a very long period of time. They had bought their flats very cheap, some for only tens of thousands of dollars. There was no hurry to sell quickly as the homeowners are confident they will remain very profitable.
But times have certainly changed with the ever rising prices of HDB flats. There are various good reasons why HDB homeowners today will sell their flats, often in just five to ten years.
They may intend to:
- Upgrade to a bigger HDB flat due to a growing family size
- Upgrade to an EC or a condo to grow their assets and build their retirement fund
- Relocate their homes to be near their parents, the workplace or their children's schools
- Right-size to a smaller HDB flat to cash out for their retirement needs
- Sell their flat and move in to live with their children
- Purchase a BTO flat and therefore would need to sell their current flat
Many HDB Homeowners Need to Sell First Before They Buy
In our work with HDB homeowners, many of them do not have sufficient fund to buy the next property first. Selling their flat first would allow them to have the CPF used for the flat and the respective accrued interest returned to their CPF account. They will also receive the cash proceed, if any, from the sale of their flat. Together with a home loan and their current CPF balance, the total sale proceeds will help to finance the purchase of the next property. For HDB homeowners upgrading to a private property, they would also have to incur the hefty ABSD (additional buyer's stamp duty) if they proceed with the purchase of the private property first before disposing the HDB flat. It is, therefore, very important to do thorough financial calculations.
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