More and more units are sold upon meeting Minimum Occupation Period (MOP)
Singapore government have been announcing a series of new policies in boosting the demand for resale HDB. There is an increase in CPF grants for first time buyers of resale HDB flats, this will indirectly increase the budget of home-seekers during their home hunting. Therefore, a boost in demand for newer HDB flats especially those have recently attained their Minimum Occupation Period or those flats within first 10 years.
HDB / EC Fulfilled MOP Requirement
For the past decade, HDB has been ramping up the building of new build-to-order (BTO) flats and Executive Condominium (EC). Under HDB's regulation, owners must live in HDB flat / EC for 5 years before they are allowed to rent out / sell their property. It is a move to curb any potential flipping or speculation. These few years will see more and more property reaching the end of their mandatory MOP requirement. We can expect more owners will be putting their houses in the resale market.
The number of newer HDB flats being sold will continue to rise in tandem with the number reaching their MOP mark. The most number of newer flats sold were in townships such as Punggol, Sengkang, Jurong West, Bukit Merah, and Yishun. Demand for newer flats (less than 10 years old) has steadily risen from 6.3% (2014), 13.7% (2017), 15.7% (2018) to 2.6% (2019) of all the units sold in the year.
“There are a few reasons that attract buyers to look at MOP fulfilled units which are less than 10 years old”
Even though newly MOP-ed HDB flats / EC command significant price premium over older resale HDB flats / older EC, there are still buyers willing to pay for the premium. Lets explore why newer flats / EC are still favored by today's buyers.
Reason 1: Long lease With Potential Upside & Resilience in Value
With around 94 out of 99-years of balance lease, newly MOP-ed property certainly appeal to buyers. Especially young families who are starting out to build their family can move in without the wait for construction to be completed. By getting an unit with long balance lease that can last their lifetime, buyers can expect potential for upside in the next 5 to 10 years depending on the market situation and performance till then. No matter how the market or economy perform, the newer the house compared to the older houses in the vicinity, the more resilient its value.
Reason 2: Modern Unit Layout & Landscape Design
If you happen to be in an area where there is a mix of new blocks of BTO / EC and old blocks of HDB / Condo, you will discover the difference in the exterior design and landscape concept. If you are able to get access to the floorplan, you can see the difference in the layout plan particularly in the yard area, bomb shelter, balcony and kitchen.
What do you expect in newly MOP flat / EC:
* More point blocks concept with a low unit-to-floor ratio of minimum 4 units per level up to 6 units per level
* Blocks spaced relatively far apart to provide more privacy to residents
* Northwest- and North-facing units to avoid the afternoon sun
* Quiet and tranquil living environment with ample communal landscaped spaces
* Unit orientation to provide to have better facing such as river-facing units, unblocked view for high floor units
* Accessible to amenities within walking distance or accessible just downstairs
* Better recreational spaces with bigger playground, outdoor gym, bigger garden for communal activities
* Unique facilities in newer EC such as games room, karaoke room, yoga lawn, star gazing lawn, sky garden, aqua gym etc.
Reason 3: Might Not Be Inconvenient As You May Have Thought
There are more and more newly MOP hdb or EC are within walking distance of MRT station and bus interchange or near to future MRT stations. There are more MRT lines being established such as Circle Line, Cross Island Line, Thomson East Coast Line, Downtown Line and Jurong Line. This will provide more convenience and shorter travel time for residents to go to their destinations.
As compared to older resale HDB, newer HDB clusters are self sufficient with food court, mini-mart, shops and childcare centre within the project. Therefore, daily necessities are within reach at the doorstep.
Reason 4: Renovated & Move In Condition
Newly MOP HDB / EC units are mostly in move in condition with the renovation done by the previous owners. Buyers need not wait for the completion of the development (around 3 to 4 years of construction period) and they also need not to do extensive renovation after getting keys. Not only are buyers saving on the renovation costs, this is also saving the hassle and time loss on the buyers.
Planning for renovation can be a very time and effort consuming process. Other than need to source for a reliable contractor / interior design firm, one need to monitor the progress and make sure the renovation outcome is within the expectation. It can be a big headache if the renovation work is under delivered or being delayed due to various reasons.
So why newly MOP properties are hot in demand? There could be many more reasons for buyers to consider to buy newly MOP unit, but the above 4 reasons are good enough to attract buyers to reconsider their choice. Depend on the buyers' budget, they can either go for newly MOP HDB or newly MOP Executive Condominium. One glance to know where the HDBs and ECs that are fulfilling MOP soon.
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