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  • Writer's picturechloekks

Should you sell or keep your ageing HDB flat?

Many buyers shy away from older HDB flats, and prefer newer ones.  But what exactly are their worries?

1. HDB flat might depreciate over time - published in Straits Times on 12 April 2017

Several factors contribute to this, including the 99-year lease limit, bank loan restrictions (requirement for a lease of 35 years or more), and CPF restrictions (youngest buyer must be able to occupy the flat until age 95). These restrictions make it challenging to find suitable buyers, leading to a potential drop in value. Even buyers with sufficient cash may worry about future resale prospects.

2. Loss of advantage in mature estateIn August 2023, HDB announced the cessation of categorising towns as mature or non-mature. Since the introduction of this system in 1992, former non-mature estates have matured, while mature estates have aged. The newer generation prefers large shopping malls over traditional wet markets and coffee shops. Flats near these modern amenities tend to outperform those near older facilities, and newer shopping malls are typically found in non-mature estates like Waterway Point in Punggol.

3. Changing of requirement of buyersOlder flats tend to be larger, but smaller families are now more common.  Privacy is valued more than space, leading to newer flat designs with no living or bedroom windows facing corridors.  Cleanliness is also a top concern, with newer flats featuring external rubbish chutes to prevent pests.  Modern buyers also prefer service balconies for clothes drying, eliminating the need for traditional outdoor clotheslines.

So, Should You Sell Your Older HDB Flat?

Investment Property:  If your flat is purely for investment, investing in a smaller but newer condo might offer better future value compared to an ageing HDB flat.  Moreover, tenants for condos and HDB flats differ, with HDBs typically rented by groups of colleagues or friends, which may result in higher maintenance costs and lower resale prices.

Future Home:  If you plan to return to the flat in the future and appreciate its location, design, and layout compared to new flats, then hold onto it.  This is especially true if you already own a private condo. Purchase of an HDB flat would require selling all private property owned.

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