What is a HDB Negative Sale?

A HDB negative sale happens when the flat price increases at a rate that is slower than the amount of interest you paid to HDB ( 2.6% ) or the bank and the CPF accrued interest of 2.5%.

Is it strange to you ? You may ask how come my flat price has increased, I sold my flat but I did not get any cash from selling my flat ? Yes. You may not get any profits from selling your flat . Why?

Compounded CPF accrued interest is the Silent Killer of Sales Proceeds.

CPF accrued interest is compounded based on the amount used for the property. The longer you hold on to it, increasing the amount of CPF accrued interest at an alarming rate. To get any cash profit from the sale of your flat, it is estimated that your flat needs to have an annual capital appreciation that is more than the HDB interest rate and the CPF accrued interest rate.

Age of the property and Its growth cycle

All HDB flats fall into the general growth stages. Their growth years are usually between 5th to 20th year, peaking between 10th and 15th year. During the growth years, you can expect a steady appreciation of your flat. After that , growth slows and stagnation begins. After that the flat value starts to decline.

So, what should you do if your flat is experiencing a negative sale?

There is no one size fits all for everyone. It is important to understand what you are going to do next before rushing to sell your flat. Some people can benefit from asset progressions and focus on growth properties. Some might benefit from cutting their losses and reset their assets.

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