It is seen in a report that the number of HDB flats sold below valuation has increased. This is in results due to the mortgage servicing rules that are in place by the government amidst low interest rate environment. According to official figures, 105 units in October were sold before valuation. The 105 units account for 7 percent of the total resale volume in October.
The Hillford Launch at Jurong Kechil
There were many sellers in the market who are selling their HDB below valuation. Many of them are geninue upgraders or downgraders and many are sellers who are selling their HDB flat so that they have move in to their just completed EC. A buyer in Punggol as lowered its COV from $20,000 to negative before valuation.
Analyst attribute this trend of below valuation HDB sales to a number of reasons. Firstly is the lower mortgaging ratio that was just introduced. This has caused many buyers to be priced out of the market when buying a HDB resulting in less than expected interest in unit ready HDB. Also, another reason is that new PRs will have to wait for 3 years before they are able to buy a HDB unit. This also caused less interest in the market.
The Hillford Condo
Another reason cited is the fact that resale buyers can only use up to 30% of their income now for mortgage payment for their HDB, down from 35%. Analyst predict that the areas which are worse hit will be in Punggol or Choa Chu Kang where there is a high concentration of HDB units.
Despite the fall in COV of HDB units, analyst see a increase in demand for The Hillford new launch in Jalan Jurong Kechil as the prices for The Hillford is very low and more buyers will be able to afford the mortgage servicing for both their HDB as well as a unit in The Hillford.