Following the implementation of the new CPF rule changes that allow greater flexibility for buyers of older flats led us to wonder if it will motivate more Singaporeans to buy older flats. Thanks to insights from a recent study, the figures reflect an increasing appetite for old flats, with the number of aging flat (30-40 years old) transactions showing a rise of 10.4% (1,219 units) during the May and June 2019 period. To make things even more interesting, the changes were introduced on 10 May 2019, just before the reported rising trend of old flats.
Flats which are older than 40 years also saw a slight increase, with a total of 564 transacted within that period, compared to only 403 flats transacted in 2018.
What are the CPF rule changes?
The new rules are based on whether the property’s remaining lease can cover the youngest homebuyer up to the age of at least 95 years old. According to the authorities, this gives greater flexibility to home buyers when buying older flats, while at the same time ensuring sufficient funds for one’s retirement. This is good news for buyers looking to get older homes in mature estates as well as sellers who are putting their aging homes on the market.
What does this mean for old flats?
The increasing number of ‘aging’ flat transactions reinforces a sense of hope for both old flat owners and buyers alike. With the stigma of depreciating value for older flats becoming a thing of the past, aging homeowners of old flats are able to sell off their home easily and right-size to an affordable retirement home. Similarly, buyers who prefer the charm of older flats are able to use a larger portion of their CPF funds to finance the purchase, thereby maximising cash proceeds for their golden years.