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🚫Cautious .

Do you know Negative sales can occur in both 🏘️CONDO and 🏬HDB flats when your property values don't appreciate significantly over a long period of time❗️

😢Zero cash after selling.

( Despite the property value appreciated)

🧐 "Recently, some of my colleagues have been discussing the slowdown in the HDB resale market. Responses from potential buyers have decreased, and there are even talks of this being a sign of transition toward a buyer's market. 🏡📉.

So I decided to do some research to understand what's happening, and it's clear from the 📊data below that resale HDB transactions volume have been declining(Green 🟢box) base on a year to year comparison on both 2nd quarter and 3rd quarter.

So any owner who experiences low response enquiry for your unit, I would say it is very normal. 😀

But at the same time looking at the chart, it also caught my attention and reminded me of a similar period in 2012, where transactions volume started dropping.📈

Followed by a year later 2013, the orange line representing pricing, Marked by Point C (🔴Red) in the chart, where resale HDB prices across Singapore dropped 📉 after a series of Cooling Measures in the public housing market and followed by the release of estimated 70k of HDB NEW Flats between 2011 to 2013 April.

Price remained stagnant for 7️⃣ years till 3rd quarter of 2020. It was only then that transactions and prices started to pick up.

⛔️But here's where we need to be cautious❗️"

Since some owners may not have experienced this situation before, I'll provide a simple but straightforward illustration based on a case study below. At that time, I was a relatively new agent in the market, just three years into my career." And I witnessed many of the below❗️

Let's take a closer look at what happened to owners who bought properties during that 2012 period from chart 2️⃣ below.

I'll use the Bukit Panjang HDB estate as a case study.

📌 Consider Block 184 Jelebu, a 5-room flat with an excellent location next to Bukit Panjang MRT Station and shopping malls.

📌 In 2012, a unit on levels 19 to 21 was purchased for $640,000.

📌 In 2022, another unit on levels 28 to 30 was sold for $750,000.

At first glance, it may seem like a good deal for an Hdb resale flat which older by 10 years yet still sell higher.

However, it turns out that the previous owners held onto their HDB flat for a good 9 to 10 years, and during that time, the property value appreciated by $110,000. While it's a gain, but I have to admit, it's not a significant one.

Despite still getting a marginal increase in value, there are some concerns that I would like to bring to your attention that many new owners may not be aware of or have experienced before:

⛔️“Negative Sale”

Let's delve deeper into the numbers using the same case study of Block 184 Jelebu, the 5-room flat chart 3️⃣ above.

The buyer purchased it for 📌 $640,000 in 2012,

putting down

📌 $300,000 from CPF for the first payment and

taking up a bank loan of 📌 $340,000 at a

📌 2.5% interest rate with a 📌 30 -year loan tenure.

The monthly installment amounted to 📌 $1,343, with CPF OA being used toward the monthly payment.

Fast forward to 2022, assuming the same buyer from 2012 had to sell to Cash Out the property due to some "unexpected financial situations" and managed to sell the same price as the higher floor unit at 📌$750,000.

(loan chart) below, show the outstanding loan and the ( CPF chat) Cpf return after 10 years.

Financial calculation.

* Selling price in 2022: $750,000

Less * Outstanding bank loan in 2022: $253,520.23

Less * CPF plus Interest in 2022

$567,986.38

* Total CPF principal amount taken from OA between 2012 to 2022,

(initial payment + monthly installment + plus accrued interest)

The result is a 🚫negative sale of -$71,506.61 despite the value appreciated by $110k❗️

🚫Selling price after paying off the outstanding home loan is not enough to cover the required CPF refund. 😱

1️⃣ This implies that the CPF refund back to your OA, along with accrued interest, for the flat over the past 10 years after selling will be less than if you had directed the same CPF amount into your Ordinary Account in the same period.

2️⃣ Additionally, you will receive 0️⃣cash after selling😢."

"During my 13-year career in real estate, I've witnessed many homeowners turn to their property as a final lifeline option during tough times. It could be due to a family member's health crisis, flashing financial red lights that can no longer cover ongoing costs, or frequently, unexpected financial challenges arising from work, investments, or businesses in down time like Covid-19 pandemic.

Let's pause and picture this:

You find yourself in such a situation…….. where your home is suppose to be your last hope to navigate through the storm. But when you crunch the numbers before selling your flat, you're hit with a heartbreaking realization – 😢ZERO cash left, despite your property appreciating in value over the years.

How would that make you feel?" 😔

You are using most CPF from your OA towards your property at the same time holding over a long period of time❓

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What about those who bought an older HDB resale flat in a Central area like Queenstown?

"I am deeply concerned for buyers who have recently bought million-dollar HDB properties especially in more remote areas like below……..

Base on a $1,000,000 property, with a higher cpf down payment $400k, a higher loan amount of $600k @ a higher interest rate 4% and a higher CPF monthly installment $2500 used toward the flat…….

😓They will need to sell for at least $1.282m in 10 years time to break even. Only any Selling price above that, will be the cash they'll receive after selling the flat."

This concern arises higher with the increasing release of BTO flats said by “Mr Desmond Lee” below.

🖍️However, there are still some other important points worth taking notes for negative sale:

1️⃣ Any option money received from the buyer in cash when you sold your property is considered part of the selling price and needs to be refunded to your CPF account before completion ❗️

2️⃣ You must also consider other miscellaneous expenses related to the transaction, such as early bank redemption interest, and legal fees which can vary from $200 to $2k depending on the type of flats you are selling and whether you are using an Hdb or a private solicitor to act for selling and loan redemption and cpf refund ❗️

( Above are all cash from you own pockets before completion.)

3️⃣ Not forgetting about commissions ❗️

4️⃣ Next housing new purchase cash Deposit and 5% cash of bank loan 1st payment if any ❗️

🚫Negative sales can occur in both 🏘️CONDO and 🏬HDB flats❗️

When you are using most CPF from your OA towards your property at the same time if values don't appreciate significantly over a long period of time?

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Therefore we must take steps to ensure that our property is always working 💪🏽hard enough for us and continuously growing in value even in the down market.

1️⃣Is there an asset that can use a lesser CPF towards the property with a lower monthly installment even if it is the same amount purchase price❓

2️⃣Is there an asset that can appreciate in value in a shorter time frame like 3 to 5 years instead ❓

I would say “YES” but only if you know HOW to find❗️

Click here👇🚫 Cautious don’t buy anything until you read and understand this❗️

If you had the chance to seize the SAME opportunity as above in today's market, would you take action NOW❓

👉Continue to Chat thru WahtsApp

(Private Owners) 👉or Click here to Read more

(HDB)So the big Question Is, it the Right Time to Sell Now❓

(HDB Owners) 👉Click here to read more

Hope above gives you some insights to avoid any future unexpected surprises."

#joengpropertysolution #ᴄᴀʟʟᴛᴏᴀᴄᴛɪᴏɴ90265006

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@Joe Ng Property Solution, achieve your retirement simple and earlier.

Joe Ng XH Propnex Realty Pte Ltd

CEA Licence No. L3008022J/ R009874H

Phone No. 90265006

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✅ How to Create a “Saving Plan” in Real Estate by using ”Other People Money” to pay for your Retirement using “4W1H “ Proven strategies to Shine your Asset regardless Bull or Bear market”

✅ (Statistics show that across different regions in Sg Resale Condo prices averagely increase between 52% to 72% over the last 10 years and 42% to 86% for New Projects)

❗️Question, Why more than 75% are still not using Real Estate as a saving plan. What are the common Misconceptions and Fears? 👇

1️⃣HDB owners: Makiing a Right Choice! Needs or Wants?

https://r009874h.propnex.net/48895/mt-Want-or-Needs--Making-a-Right-Choice---Joe-Ng-90265006

2️⃣Private Condo Owners: Sell & Buy High? Still can make Profit?

https://r009874h.propnex.net/21700/mt-When--To-Resale-Owners--Sell-High---Buy-High---Can-still-make-Profit--Joe-Ng-90265006