Chief Editor May 09 2024

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CEA Investigates Misleading Resale Property Listings for Million-Dollar HDB Flats

The recent uproar surrounding two Housing Board (HDB) flat resale listings has sparked an investigation by the Council of Estate Agencies (CEA), under the Ministry of National Development (MND). These listings, each priced at an astonishing S$2 million, have raised eyebrows and ignited discussions across the nation for being deemed "misleading" and "unrealistic" by the authorities.

One of the listings is for a 1,258 square feet (sq ft) five-room flat situated in a Design, Build and Sell Scheme (DBSS) project in Toa Payoh. The other is for a 2,400 sq ft "jumbo flat" located in Sengkang, purportedly boasting six bedrooms and four bathrooms. However, the veracity of these claims has come under scrutiny, prompting a joint statement from MND, HDB, and CEA.

According to the statement, the listing for the Sengkang flat is misleading as there are no officially recognized "jumbo flats" in the area. Instead, the purported "jumbo flat" is composed of two adjacent five-room flats, which cannot be converted into and sold as a single unit. Additionally, the listed price far exceeds recent transacted prices in the vicinity, rendering it impractical and misleading.

There is no Intent to Sell registered with HDB for that Toa Payoh DBSS flat, which means that the seller is not serious in disposing his flat. Because Option to Purchase (OTP) cannot be issued when the Intent to Sell is not approved by HDB.

Recent resale transactions within the Anchorvale Link estate, where the Sengkang flat is located, have been significantly lower than the asking price, further highlighting the exorbitant nature of the listing.

The investigation has prompted action from CEA, which has brought the matter to the attention of the agent's property agency. Firm action will be taken if any breaches are established. Moreover, the listing for the Toa Payoh flat, which exceeds the highest transacted price in the area by nearly S$500,000, has been flagged as unrealistic by property market experts.

The government agencies emphasized the importance of property agencies and agents in upholding the integrity and professionalism of the real estate industry. CEA will scrutinize the information presented by property agents when marketing HDB flats to ensure transparency and protect the interests of prospective buyers.

The phenomenon of million-dollar HDB homes has garnered attention, with several listings on property portals asking for S$2 million or more. While such listings may appeal to a niche group with unique preferences and financial means, they represent a small minority of all resale transactions.

High Cash-Over-Valuation (COV)

The DBSS Toa Payoh flat and the two 5-room flats in Sengkang, as per their current listed prices, will entail substantial cash-over valuation (COV), necessitating full upfront payment in cash.

HDB loan and bank home loans is based on the property valuation and not the purchase price.

Buyers are advised to check valuation before making an offer to purchase a home. 

Timely Invervention To Stop Opportunistic Property Agents

JT Chia, Managing Director at Propertyforsale, supported the government's intervention to curb attention-grabbing property listings with unusual high selling prices. Such tactics may distort market expectations and give the false impression of rapidly rising property prices.

“Singapore Government want to rein in property prices in an election year,” he said.

Despite the allure of million-dollar HDB flats, the majority of first-timer families who purchased new flats or resale units in 2023 had manageable mortgage servicing ratios, indicating their ability to service their monthly HDB loan instalments with minimal cash outlay.

In conclusion, the investigation into misleading resale listings for million-dollar HDB flats underscores the need for transparency and accountability in the real estate market. As stakeholders collaborate to ensure fair and accurate representation, prospective buyers are advised to evaluate their options prudently, especially in the current economic climate.