Home Of Tong

I am expected to post this earlier, afterall, it’s about the other major blessings that I have received just last week. So I will come straight to the point. I’ve got a new house! Ok, not really, it’s is 99% confirmed but something can still happen from now till the time I collect my keys, so I am keeping my fingers crossed.

Having looking around for a house for the past 3-4 months, the expectation between a buyer and a seller keeps getting wider. Sellers, despite the recent data release by HDB and the volatility of the US stock markets, which affected ours, are still asking for the sky. We have narrowed our search of a new house to 2 precincts, namely Yishun and Sembawang. Having lived in Yishun for the past 20+ years, it’s only natural that I prefer to stay in the same area again, what with my wife and children happily settled in schools and workplace in the area. And Sembawang because it is one of the newer towns in Singapore.

The going price for ANY flats in these areas are on an average S20K – S30K cash over valuation (COV), which some (even in Yishun/Sembawang area) asking for as much as S100K cash over valuation. Which means I have to fork out these in cash, a value I am unwilling to pay. So the search has been difficult, with my housing agent advising me against buying one now. All these while I did not consider getting a flat directly from HDB due to the S40K resale levy that I have to pay. But looking at the market now, it may not be too bad an idea to pay the levy. Imagine this, say you found someone willing to sell you at S30K cash above valuation, and though the levy is at S40K (if your 1st flat is a 4 room flat), you will as a whole pay a much lower price for the flat. A flat in the market could value at $350K now, plus the $30K COV, you will be paying $380K for that flat. But if you would have bought it direct from HDB, it could cost you $300K + $40K levy for a total $340K levy. So for a house in the same area, you could potentially save $40K that you can use for your retirement.

And a new flat will usually be less expensive to renovate as compared to a resale flat, unless you are willing to take whatever the owner left behind. But my own experiences tell me that no matter how nice the house looked, once you move in you will begin to see a lot of faults, and unless you are willing to live with those faults, you will have to spend a considerable amount of money and inconvenience to get them fixed, or even redo them. Which is why we have decided from the onset that if we do get a resale flat, we will redo the entire house.

So in today’s market, the levy seems like a small price to pay for a new home, which is the choice we’ve made. But all the while we thought we have to wait till HDB announce for any new flats to be release for application for balloting before we can have a chance to select one. Little did we know that we are do a walk-in and select a flat straight away for flats that are ‘leftover’ from previous balloting, up to 5 months from the time it was released. And so we started to visit the flats that are available, going up to each units, looking at surroundings, checking our potential neighbours, bringing our parents, relative, children to have a look. All very elaborated but well worth the effort. When I bought my first flat, I want to make my own decision and not listen to opinions of others. I thought to myself, it’s my house, I’m getting married and I’m an adult now, why should I listen to anyone but myself. How wrong I was! Now older and wiser (hopefully), I realise it is important to listen to a wide variety of opinions from different people (especially our older, wiser folks), and digest the information and make an informed decision (with my wife of course).

So we were quite glad that our choice turns out to be their choice, and some of their reasons are what we did not think off in the first place, so it just cemented our decision. And we feel good about it. We targeted one particular unit and prayed very hard for it to be available for selection. So we went down to HDB early on Monday morning, took queue number 8, and waited, and waited, and waited. I never know I have to wait that long! And finally it is our turn to select the flat and the first thing the HDB officer told us is. Oh, Sembawang, this morning there are quite a lot of people who chose Sembawang. Our heart began to race, and so we pop the question, anyone chose the block we wanted? The reply was a unpopular ‘YES’. I prayed in my heart, “Oh God, let it not be the unit we wanted”, and so we asked, which floor? The reply is a relief to us and we quickly asked him to block out the unit we wanted. Thanks be to God, what a close shave! As we felt it is the best unit left for that block.

So here we are, 1st time owner to be for a new HDB flat (the previous one is a resale flat), excited, but is made to wait. According to HDB, we need to wait for 6 months, we send in an appeal letter and pray for the best. The next problem is how to repay the $40K, which, thankfully, we manage to get an interest free loan. How? Sorry, it’s a secret.

Today mark the day that I am officially houseless but not homeless for 1 month. Houseless because 1 month ago I handed over the keys of my house to someone else. Not homeless because I still got a place to stay, even though it does not belong to me.

House hunting for the last 1-2months has been frustrating, with the property market heating up and does not look like letting up, it makes it very difficult to convince house owner to be more down to earth with their own valuation of their house. While the private property market have no doubt rise so fast that you can hardly catch a breathe, HDB market has actually rose at a much slower pace. But with some buyers having too much cash and no where else to spend, they decided to splurge on HDB flats in the central region, which resulted in the recent crazy price in the region of 600K+ and 700K+ for a 5-room flat. This resulted in sellers hoping to get the same kind of money with their flat, even those in obscure places.

I read that one Jurong West house owner want to sell his 5-room flat at 100K above valuation, wishful thinking or plain stupidity, you make your own conclusion. Others in the outskirt are asking for 30K, 40K, 50K or even more thinking that everyone in Singapore suddenly receive a bag of cash outside their door step and are eager to spend it on a new house. All this coupled with a booming economy and a rising stock market makes it all the more difficult for an average Joe like me to buy a flat to stay. Even the recent ‘blip’ (as many sees it) in the US stock market fail to damper the market.

HDB’s effort to bring people to reality by releasing a more detailed transaction value (by town) and COV (Cash Over Valuation) has yet to calm the market. But I do wish those who intend to sell their flat will look at those figures and be more realistic in their demand, or they will just have to forget about selling it altogether.

It’s a bad time to buy a flat now, in fact, it’s one of the worst time. But for those who need a house now, they will have no choice but to dig deep and go for it. My advise is, do not pay over the moon for a house, as many who bought their flat in the last property boom found out, most are still servicing a huge loan with no respite in sight.

And if you are a first time home buyer, even if you have to wait, get a flat direct from HDB and do not take a CPF Housing Grant to buy a resale flat from the open market. Trust me, you will thank me for this a few years down the road. Don’t believe me, go around and talk to those who did take the grant 5-8 years back, and see if they regret doing so. I have talk to many, and everyone of them regretted. Why? Get in touch with me and I will explain to you the reasons, and you can make your own judgment.

Cheers!