Huttons' comments on the new URA circular
URA has put a stop to the re-issuing of OTP for the same unit wef 28 Sept 2020.
In our view, this may have more of an impact on HDB upgraders. The sale of a HDB flat will take more than the three weeks given under the terms of the OTP. So the HDB upgraders will try to sell off their existing HDB flat so that they do not have to stump up the ABSD upfront. Effectively now, the HDB upgrader has to come up with almost 40% cash and CPF within three weeks if they want to buy a private residential unit.
These HDB upgraders will usually rent another HDB flat to stay while waiting for the completion of the project. There is likely to be an impact of the HDB rental and resale market.
Conversely there is no requirement to pay ABSD for an EC unit as legally no one is allowed to own both a HDB and EC at the same time. There may be spillover demand to the EC market following this announcement.