The unfortunate reality today is that HDB resale prices are eye-wateringly high. So how do future homeowners navigate the line between “reasonably priced” and “overpriced” HDB flats? For those who don’t want to pay more than they should just to have a roof over their head, here are 4 warning signs of an overpriced HDB flat so you can stay away from them.
1. When it’s priced higher than units in the surrounding area
It’s quite common to search for HDB flats by neighbourhood, which makes it easier to spot if one listing is priced significantly higher than others in the same area. If you come across something like that, the odds are good that the high-priced unit is overpriced.
Of course, a higher price doesn’t automatically mean it’s a red flag. It’s only a listing you should avoid if the unit commanding a premium has not undergone a recent renovation, has no significant upgrades, or lacks any unique features and amenities.
To ensure that you don’t get suckered into paying more than you should, you should take into account the price per square footage of neighbouring properties on the market and compare it to the listing you’re interested in. You could also check out HDB’s service of all the resale flat prices to see all the HDB resale transactions that have taken place.
2. When it has been on the market for a long, long time
This listing has been on the market for more than 4 months now.
Image credit: PropertyGuru
If there’s one thing for certain, it’s that Singaporeans will never let something attractive stay available for long. So if you ever come across an HDB listing that has been on the market for months, there might be a few reasons why it’s not being sold yet.
According to PropertyGuru, the average timeline it takes for an HDB resale flat to receive an offer is anywhere from 1-4 months. So if you come across a listing that’s been sitting there for 5 months to 1 year, the odds are good that it’s either overpriced or something is terribly wrong with the unit that the agents are refusing to disclose.
On the flip side, sometimes a home might just have been marketed poorly or is unlucky with buyers.
3. There’s a lack of amenities in the area
One of the most important factors that determines the price of a house is its location. After all, an HDB flat that is 30 minutes away from the nearest MRT station will not be as valuable as an HDB flat with a bunch of amenities within walking distance.
Even if the ulu unit is an expansive 5-room flat on a higher floor, most people wouldn’t be willing to pay a sum that’s 7 figures if it meant that their access to public transportation and groceries would require a car.
However, this might change in the future as more MRT stations and lines are slowly being built up and areas will ultimately gentrify.
4. When the listing pictures don’t match up with the actual unit
Catfishing isn’t limited to dating apps. There are plenty of instances where photos of the advertised unit do not match the unit you’re looking at during a viewing. If that happens, we’d advise you to turn and run.
It’s one thing if there’s a little mess or if the owners are packing up their belongings to move. It’s another if the home is worse for the wear where tiles are cracked, walls are stained, and the place is in disarray. Not only might you have been lied to, but the poor condition of the property might also be a sign of neglect or poor maintenance.
Image for illustrative purposes only.
This might also mean you might have to shell out more money down the line to repair anything that might be broken from pipes to faulty wiring. This would be especially egregious if the sellers are asking for a higher-than-average price for their shoddy flat as you’d have to pay more for the renovations after paying a premium already for the home.
One reason why you might not care about the interior of the home is if you already plan to gut the home and do a full renovation.
Tips on how to avoid buying an overpriced HDB flat
Many of these red flags might seem obvious and intuitive, but oftentimes we can be blinded by an attractive deal in a moment of desperation. Some tips you can take heed of to avoid buying an overpriced HDB flat include:
- Compare prices of HDB flats in the same neighbourhood
- Analyse recent HDB resale transaction prices
- Utilise online property valuation tools like SRX X-Value
- Do proper due diligence and thorough inspection of the property
- Learn and apply negotiation techniques to ensure a fair pricing
- Know when to walk away from a bad deal
As long as you remain vigilant and savvy, you won’t ever accidentally break the bank when buying an HDB resale flat.
Read other HDB housing explainers and guides:
- How to downsize your home in Singapore
- Your ultimate guide to mortgages in Singapore
- The 5 cheapest estates to buy a resale HDB flat
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