Condo owners shelving plans to downgrade, others who sold homes are stuck, say agents after cooling measures

PropNex agent Shafik Yusope said he has helped clients sell their condos after they signalled plans to use the extra cash to fully pay for an HDB flat.

“Their intention is the moment the proceeds come in, they would want to purchase an HDB flat,” he said.

“But now with this cooling measure … they cannot buy. So they are very anxious, (saying): ‘Where am I going to stay? I have committed to my sale already, now I need to buy. What you want me to do?'”

RENTAL MARKET TO FURTHER HEAT UP

Mr Shafik said these owners will most likely have to rent an HDB unit during the wait-out period, although he foresees challenges with this too.

“Already at this point of time, the rental market is very difficult, meaning to say, demand is higher than supply,” he said.

“It’s going to get even hotter because these people, after downgrading, they have to rent. It’s going to be a tough time for them to look for a house.”

Data from 99.co and SRX show that condominium rental prices rose by 1.7 per cent in July, rising for the 19th consecutive month, while HDB rental prices rose 1.5 per cent, the 25th consecutive increase.

Even before the cooling measures were announced, Mr Shafik said he got 50 enquiries in the first hour of advertising a “super basic” HDB flat in Yishun for rent. With the measures, he expects demand to skyrocket.

“Because these (condo sellers) are downgrades, they have, I would say, quite healthy proceeds. So, they have the ability to rent, financially,” he said.

“Whether they are able to get a house for them to rent for at least 15 months, that’s a different question.”

PLANS ON HOLD

Fellow PropNex agent Daron Ang said he has three clients below 55 years old who wanted to capitalise on the currently “attractive” condo prices by selling their home and buying an HDB flat.

According to data released by the Urban Redevelopment Authority in July, prices of non-landed private properties increased by 3.6 per cent in the second quarter, compared to a 0.3 per cent decrease in the first quarter.

“They were just a bit annoyed because they were looking forward to cashing out and holding on to more cash,” Mr Ang said.

“But right now they have to shelve their plans for at least 15 months.”