the new HDB scam

HDB has recently announced a new transaction system where buyers will have to obtain a buying option first before getting any official valuation. The immediate impact we could see is that sellers are going to be in for a rude shock on transaction day that their houses are not worth as much as their property salesman projected out for them. It works vice versa for the sellers who might end up forgoing their option if the valuation turns out too much (unlikely of course). This new ruling, according to Minister Khaw Boon Wan, will "rationalize" the process of negotiations and restore the "original" intention of valuation, which is to help buyers secure a loan.

How does a move that discourage the volume of sales transactions helps buyers to secure a loan? Sellers is now in a precarious position and especially for those who have not paid off their housing loan, they are very likely required to pay back accrued interests owed to their CPF in cash (it sounds stupid owing your own CPF account money but this is true). In the immediate period, we will see the following:

1) Nose-diving of sales volume of HDB resale flat as sellers will wait for the HDB to backtrack on its new ruling given how rubbery housing policies in the recent years have been under Minister Khaw

2) Housing supply goes down, housing prices of the other 2 categories(Private and BTO) goes up

3) More property agents will belly up

4) Rental market is going to become very strong because PRs will be forced into private properties or rental 

The real impact of the new regulation is to prop up property prices by cutting supply. We all know the HDB profits when BTO prices goes up. We also know the condominium developers are also in for a haul when private property prices goes up. We also know property transactions contributes a large component to the GDP. But unlike everyone, Singaporeans can no longer profit from the property pie because it is the HDB who is going to determine your housing price at a loss.

Securing a housing loan depends on three factors: income, size of loan, period of loan and deposit of loan. The new ruling has nothing to do with any of these. It does not help buyers secure a housing loan just simply because the Minister who enjoyed flashing his nipples said so.

Singaporeans who have recently bought their flats and expected to sell their flat for a tidy profit after the 5 years Min Occupancy Period have been cheated. Asset appreciation approach has turned out to be a Pyramid Scheme where new buyers will be hung out to dry. Welcome to Singapore Inc. You can kpkb but you will still be cheated.