Revised HDB Resale Procedures for HDB Flat Purchase
The intention of the revised HDB resale procedures announced on 10 Mar are:
– to improve market stability;
– to encourage buyers and sellers of HDB flats to move away from the COV + transaction price common practise;
– to restore intent of flat valuation.
More Timely HDB Resale Market Price
The resale transactions shown in HDB system used to reflect approved transactions done 6-8 weeks ago but now it will be based on REGISTERED OTP price, hence, the market info will be more timely.
Valuation report will now only be issued at the request of buyer after granting OTP, it will be tagged to the OTP number which means it will be non-transferable to another buyer.
If current buyer received the valuation report and wants to renegotiate on the price, another OTP will need to be granted after 21 calendar days’ period.
Yes, the 21 days are extension period because valuation needs to be done after OTP granted, on the flip side, it also means buyer and seller will both in locked-in for 21 days. Buyer cannot grant another OTP to another HDB resale unit and Seller cannot accept another OTP from another Buyer till 21 days lapsed.
Interim Impact on HDB Resale Price
The present valuation reports that were issued before the announcement would still be valid and so for the interim, some estates might see a sudden “price correction” especially for regions with many transactions selling below COV. However, this is only an interim impact, as the previous valuation reports being issued would eventually expire after 3 months.
So would there be COV in the future?
The answer is likely YES under some conditions, for HDB flats with great decor done, situated within prime locations like RedHill or Tiong Bahru or with excellent views, these HDB flats would likely command a Cash-Over-Valuation (COV) since there would be buyers who sought after these ‘rare’ HDB units.
Going Forward…
Buyers and Sellers alike will be more cautious when granting and accepting OTP as there will be a locked-in period for both parties, we might be seeing the trend of more $1 OTP .
