15 months wait to buy HDB Resale

On 30th Sep 2022, the government introduced several drastic moves to ensure that HDB resale flats remain affordable for flat buyers, especially for first-timers. One of the moves is "15 months wait to buy HDB Resale".

This can be seen from the context of two macro economics trends in the world and in Singapore.

Firstly, the world's market interest rates have risen significantly. The Federal Reserve Board in USA has said they will keep raising interest rate to combat their sticky inflation. As a result, this has already impacted Singapore bank loans and is still likely to increase the bank loan interest rates further in Singapore. This is also why on the same day, the TDSR and MSR calculation rates have increased to reduce loans eligibilty amounts.

Secondly, the measure is probably to try to reduce the number of million dollars HDB resale flats. The authorities clearly can see, despite the small number of such transactions, it is a "optics issue" and potentially a political explosive one.

"Million dollar for public housing" is never a nice slogan to tap into......

What is "15 months wait to buy HDB Resale"

So on 30th Sep 2022, with the upward momentum in HDB resale prices, MND and HDB introduced a wait-out period of 15 months for private residential property owners (PPOs) and ex-PPOs to buy a non-subsidised HDB resale flat.

PPOs and ex-PPOs are currently allowed to buy a non-subsidised HDB resale flat on the open market, with the requirement that they dispose of their private properties within six months of the HDB flat purchase. Buy first, sell later within six months.

They will now be required to serve a wait-out period of 15 months after the disposal of their private properties before they are eligible to buy a non-subsidised resale flat.

Yes. Sell your private property and wait 15 months before buying your HDB resale. You cannot buy a resale HDB and still has six months to sell your private property.

Sell private. Wait 15 months. Buy HDB. Wait for completion. Reno. Move.

Ouch.

At least, this makes it easier for property agents to manage property sell-buy timelines. Always a big headache ;)

You still need to wait 30 months to buy BTO

No, this "15 months wait" does not apply to new BTOs after selling private property.

If you want to buy BTOs after selling your private property, you still need wait 30 months.

If you are still a first timer (somehow) after selling your private property AND then wish to apply for the CPF Housing Grant and Enhanced CPF Housing Grant for the resale flat purchase, you will need to wait for 30 months.

15 Months Does Not Apply to 55 Years buying small resale flats

Actually, on the ground, there are many older seniors who wish to cash in their profitable private residential property and then move to an HDB flat, and keep the cash for retirement. Or they want to move to stay near their children and grandchildren.

In fact, they also prefer to buy at mature estates and hence this might cause a little price spike there. But they could be a minority group here too.

And they probably should not be "punished" by this move on 30th Sep 2022.

The good news is that the 15-month wait-out period will not apply to seniors aged 55 and above (and their spouses) who are moving from their private property to a 4-room or smaller resale flat.

No 5 rooms or Executive Maisonette or EA. Anyway, at 55 years onwards, I also don't want climb the stairs up and down.

Senior PPOs/ex-PPOs can continue to buy a 2-room Flexi flat on short lease (if they are aged 55 and above) and Community Care Apartment (if they are aged 65 and above) from HDB.

Does both applicants need to be more than 55 years old ?

Consider a scenario where the PPO husband is already 56 years old, while the wife is 54 years old ?

In this case, as the wife has not met the minimum age requirement of 55 years old, both of flat buyer and the spouse (either as co-applicants or core occupiers) are still subjected to the 15-month wait out period if they intend to apply to buy a resale flat now AFTER selling their private property.

So to qualify for the "55 years old" + "4 rooms and below" rule, BOTH applicants making up the family nucleus MUST be 55 years and above.

So what can you do ?

The government has stated that "PPOs/ex-PPOs, regardless of age, with extenuating circumstances, e.g. financial difficulties" may approach HDB for assistance, and they will assess their situation on a case-by-case basis. In my opinion, this would happen if you are having huge difficulties in paying for the private property and is needing help to sell and move to a HDB. But you are dependent on case by case approval. Depending on approval is always a tricky thing.

(Update on 6th Oct: HDB will approve, on a case by case basis, exercise flexibility for buyers with documentary proof that they had obtained the option to purchase before the policy changes and waive the 15-month wait-out period.)

The other possibility is to sell the private property and then RENT a temporary place to stay while you wait out the 15 months. In fact, I would say about about 24 months lease if you factor in the completion timeline, and the renovations and the final move itself.

Or be nice to your parents in law. Be very nice. Not too late now.

This should have an slight impact on rental flats especially those larger HDB flats or private condos.

And yes, there would be definitely a cash flow impact to you, as you cannot use CPF to pay for rental of the temporary place, while you wait out the 15 months.

Read about why you should appoint an agent to help you with the resale purchase process too.

It would be interesting to see how the market works this out in the coming months.