HDB resale prices up 3% in Q1
It is estimated that the HDB resale prices will rise by up to 3% in Q1 of 2021. This is quite an astounding figure and it has caused a lot of confusion amongst the people. There are many speculations as to why the HDB prices are going up in such a quick pace. The HDB property is very much in demand and has caught the attention of the real estate agents and individuals from all round the country. There are many reasons why the HDB prices have gone up in Q1, but the focus of this article is to look at how the price of HDB can be affected if the government decides to waive some of the tax imposed on the resale prices. Private developments such as Belgravia Ace will therefore witness a price increase also as residential units prices have increased.
There have been rumors that the government will consider lifting the tax on the sale of homes and this has prompted many people to stock up on HDB houses at the start of the year. If the tax burden on the resale prices of HDB were removed, it would definitely attract more investors and homeowners. Lifting the tax burden means that the HDB would be able to earn more money and spend it on developing more homes and offering better services to their tenants. This would mean that the housing budget of the government would increase and hence there would be a fall in the inflation index and a rise in gross domestic product (GDP).
Another reason as to why the prices of the resale properties are expected to go up in Q1 is that the government may be tempted to introduce stricter policies in the mortgage market. Since the introduction of the HDB in 2021, the government has introduced policies which require the home buyer to pay higher down payment amounts and interest rates. The policies have also made it mandatory for the homebuyer to own a home for at least five years before they can avail of a mortgage. The higher down payment and lower interest rates imply that the buyers are considered a higher risk than before and hence the banks have to make higher profits out of the deals.
In other words, since the banks feel that the buyers are more risky now, the higher price tag may be a result of that. However, as the economy starts picking up and confidence in the economy grows, the banks will be willing to allow higher prices in order to increase their profits. This might prompt the government to ease up on its stringent policies and loosen up the housing market. This would result in higher prices of HDB resale prices.
This might result in a scenario where the resale prices of HDB are higher than the existing market prices. This could lead to the conclusion that the government might be able to ease up on its restrictive policies again and cause the prices of the residential properties to go up again. This might prompt lenders to reintroduce their policies which might push the prices of the HDB up again. Since HDB is a very large company, any move by the authorities to ease up on the restrictions could result in the company to close down its operations. Hence, the possibility of the price of the HDB resale increasing again is quite high.
However, that does not mean that the HDB resale prices will suddenly shoot up. This can only happen if there is some significant change in the economy. If the economic indicators improve, the prices of the homes may fall again. But this will happen after a period of time where prices of the other types of properties in the city will reduce. Hence, it is not likely that the prices of HDB resale prices will suddenly shoot up in the near future.
If you want to invest in the property market, it is best that you scout around for the best deals first. Once you have decided on which type of property you are going to invest on, then look for the best deals regarding that. You may check with your local real estate agents about the prices of the houses in that particular area and see whether they have any upcoming property resales. If they have, you could simply scout around for an HDB resale. This is one way of ensuring that the HDB resale prices will not increase in the immediate future.
In fact, the chances of the prices of the residential properties in the city shooting up in the short term is quite high. But, that will only last for a limited period of time. Once the prices go back to normal, you will be able to get a better deal when you decide to buy a new home. So, investing in the residential properties in the city through the HDB will only help you get a better deal in the long run. Hence, it is important that you scout around for an HDB resale so that you do not need to keep spending on buying a new home when you want to settle down.
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