SINGAPORE — Some homeowners have been trying to sell their aged Housing and Development Board (HDB) flats unsuccessfully for months — and for some, more than a year — attributing the failure to the general sentiment towards the depleting leases of public housing flats.

But with the recent changes in rules relating to the use of Central Provident Fund (CPF) savings and HDB loan restrictions when buying a flat, these sellers are now slightly more hopeful of finding a buyer.

Last Thursday (May 9), the Ministry of National Development announced that older buyers will be able to draw more from their CPF and get a larger HDB loan for older resale flats, as long as the youngest buyer turns 95 before the lease of the flat expires, among a slew of long-awaited changes.

Conversely, younger buyers looking to buy older flats with leases that expire before they turn 95 will be able to use less of their CPF savings and are only eligible for a smaller HDB loan.

National Development Minister Lawrence Wong first announced in August last year that his ministry is looking to tweak CPF rules to make it easier for people to buy and sell old flats.

Analysts previously told TODAY that these changes would slow down the depreciation of ageing flats, although they were uncertain whether it will boost the overall demand for these flats.

However, other policies to tackle the problem of depleting leases of public housing flats — namely the Voluntary Early Redevelopment Scheme (Vers) and Home Improvement Programme (HIP) II announced during the National Day Rally last year — have had little impact in making their HDB resale flats more attractive to potential buyers, homeowners said.

Ms Lilian Wong, who has been trying to sell her parents’ 3-room flat at Jalan Bahagia for S$238,000 since September last year, said some deals with potential buyers fell through as they were not able to use their CPF funds to finance it.

Under previous rules, any buyer looking to purchase a flat with less than 60 years of lease left would not be able to use the full sum of their CPF savings.

With 50 years of lease left on Ms Wong’s parents’ home, buyers 45 years old and older would have flexibility in using their CPF savings should they decide to purchase the home under the new rules.

While the impact is still too early to be felt, Ms Wong said: “For older folks who want to downgrade, hopefully this will mean that some buyers might turn around and say ‘maybe we want to think about it’.”

Compared with the earlier announcements, such as Vers and HIP II, which the 67-year-old retiree said are still “in the air”, this week’s changes are “more tangible”.

“This is in your hand, you know what you can do. To me, this is a plus,” she said.

SELLERS DROPPING THEIR ASKING PRICES

Her sentiments are echoed by Mdm Lily Toh, who has been trying to sell her 5-room Bukit Merah flat since the second half of 2017.

The 40-year-old marketing executive is now “slightly more optimistic” with the recent changes, as it “directly affects the downpayment (buyers have to come up with) and maximum price they can afford”.

Mdm Toh also said she has seen a “slight” uptick in queries from interested buyers after August last year, which was when the raft of measures to tackle the issue of depleting leases were announced.

However, she said that the impact of these announcements has not been “large enough to undo the effect of what the Government said earlier about allowing 99-year leases to expire”.

There has been much public debate and concern over the depleting leases of older HDB flats after Mr Wong, in a blog post in March 2017, said that the Selective En bloc Redevelopment Scheme (Sers) would be offered only to HDB blocks located in sites with high redevelopment potential.

The leases of most HDB flats will eventually run out and the flats will return to HDB, which would in turn surrender the land the flats sit on to the Government, Mr Wong said.

Since first listing their flat which has 56 years left on its lease, the Tohs have had to drop their asking price by about S$70,000 to the current price of between S$530,000 and S$550,000.

Mr Tun Tun is facing a similar predicament with his 3-room flat at Circuit Road, which he first put up for sale in January last year with an asking price of S$280,000.

With 50 years of lease left, he has reduced his asking price to S$250,000, below the S$296,000 he had coughed up to buy it in 2011.

“I am losing a lot of money,” said the 64-year-old who is a technical officer in the construction sector.

“It’s more than one year. It’s very, very hard to sell. People who are interested have issue (in finalising the deal).”

For Mr Tun, nothing has changed since the authorities announced Vers and HIP 2. “Not many people are interested in HIP 1 or HIP 2,” he said.

Mr Calvin Loh, whose 3-room flat at Commonwealth has been on the market since about four months ago, believes that these new rules may “help in some way”, though he feels that the changes are “not significant” as they only benefit older buyers who can maximise their CPF usage and get a higher loan.

While acknowledging that the Government is “at least doing something” with these new measures, the the 39-year-old showroom manager for kitchen fittings observed that he and his fellow neighbours looking to sell their ageing flats are “still stuck” in this predicament.

“You know it’s bad already; a lot of people are not looking at these kind of old flats. Unless you sell below valuation,” he added.