My Parents’ Palpitating Experience To Buy A HDB Sale of Balance Flat

Earlier last year, I wrote that my parents successfully obtained Singapore Citizenship status. Since then, I have been monitoring the quarterly HDB sales launch to look for a suitable new home for them. I consider it to be silly if I do not help them take advantage of one of the greatest privileges afforded to a Singapore Citizenship, which is the opportunity to buy a subsidized flat from the government. After the second attempt at the Sale of Balance (‘SBF’) exercise, they were finally given a ballot queue number of 3.

While the number would have looked insanely good under a BTO (Build-To-Order) exercise, more analysis is required given that it was a SBF exercise. In their specified area of Choa Chu Kang, there were only 2 units available. To make matters worse, 1 of the 2 units was an equally aged flat. The math suggested that they were in store for an agonising wait and this was indeed the case.

Why Heartland Boy Encouraged His Parents To Buy A New HDB Flat

Before I go straight into their experience with the Sale of Balance exercise, let me lay out the reasons why I encouraged them to buy a new HDB flat despite their advanced age.

1) To boost their retirement funds

Since they finally meet the eligibility criteria, the plan is to buy a smaller (3-bedroom) subsidized flat and sell their existing 4-bedroom HDB flat in the resale market. A quick back of the envelope calculation indicated that my parents can probably net a healthy $80,000 to $100,000 in profit from this move after accounting for renovation and moving costs. However, do note that not all of these will be received as cash since the sales proceeds would have to be used to pay the accrued interest and the principal amount that was withdrawn from their CPF accounts to pay for the existing flat. Regardless, it may not be a bad thing for some of the sales proceeds to stay in CPF since this can help them to meet the Basic Retirement Sum. This will provide a minimal floor to their retirement funds and increase their CPF LIFE payouts.

2) Future-proof the house for old age

As taboo as this may sound, I was thinking a brand-new flat would provide the best opportunity to re-design a home suitable for their future.

This means making that it must be accessible via wheelchair, fitted with grab bars and lower tabletops etc. The objective is to make the living environment as senior-friendly as possible to accommodate for the worst-case scenario. A BTO flat is like a blank canvas as opposed to re-jigging their existing flat.

3) Replace the decaying lease of their existing HDB flat

This is a benefit that would accrue more to my parents’ beneficiaries. A new flat armed with a fresh 99-year lease would have a significantly higher chance of experiencing capital appreciation compared to their existing flat which probably has less than 60 years of lease remaining.

Sale of Balance Exercise

As first-timers, my parents stand a reasonably good chance of being allocated a queue number. It is with this hope that I submitted their application during the SBF exercise in May 2023. As aforementioned, they were given a queue number of 3 with an appointment date as shown in Diagram 1.

As I have prior experience with the ballot system, I was monitoring the units’ availability on a daily basis on the week leading up to the appointment date. On the eve of their appointment date, I noticed that the older unit became unavailable on the HDB Flat portal website. I was pleased that their choice unit still remained available! Thinking that they stood a fairly good chance, my brother even went down to do some basic due diligence of the unit as shown in Diagram 2.

Being on the 16^th floor, it was probably not a leftover flat from the original BTO sales launch but more likely to be a case of a couple “giving up” their flat for personal reasons. It was on a good stack facing the canal instead of the busy road and just about everything else checked out. Heck, even the unit number has only 12 permutations for the 4D lottery!

Appointment To Book A Flat

It boiled down to that fateful day when my parents were allocated an appointment to book a flat. My parents and I all took leave in anticipation of this momentous event. We also prepared all the required documents and were getting ready to make our way down to HDB hub when the bad news came.

This probably meant that the applicants given Queue No.2 were scheduled for an appointment in the morning and picked the last remaining unit. It was hard to fully explain to my parents the ballot process and how they ended up in a situation of not being able to choose a flat.

It was a real dampener to my parents’ spirits when this notification from HDB came. I could sense the disappointment because expectations have been gradually built up leading to the appointment date. I am sure that deep inside, they would have started imagining how it would be like living in this new development. Alas, it was not to be.

This article is published on 21 Oct 2023

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