reporter2
19-03-13, 18:07
http://www.straitstimes.com/archive/saturday/premium/money/story/her-three-room-resale-flat-others-theres-new-option-20130316
For her, a three-room resale flat For others, there's a new option
Two-room flats for singles: Too small, too far away, say some, but others welcome them
Published on Mar 16, 2013
By Rachel Chang
TO DESIGN consultant Thomas Tan, 38, HDB's announcement this week that it will soon launch two-room flats for singles like him has come as a lifeline.
He has been keen to buy his own property for a while, but effectively had no options as the rising resale flat market put prices out of his reach.
"For the past few years, the price was so high that I couldn't be bothered to look seriously because I would only have made myself more depressed," he said. "Private property seemed even worse."
He is keen to give the new two-room flats a try. "I'll definitely be putting my name down in July. A two-room in Sengkang is better than nothing."
Already, the Housing Board's flats for singles have been pooh-poohed by some for size and location restrictions. The two-room flats will be just 375 sqft or 485 sq ft, and in non-mature estates such as Sengkang.
But the move has created a new housing option for singles where previously they had only two - if they could afford them.
Until now, singles who wanted a property of their own and who earned about $5,000 a month - the income cap for the new flats - either went for a three-room resale flat or a private shoebox unit.
A 35-year-old single making about $5,000 a month can secure a mortgage of $330,000 to $390,000, said Mr Timothy Kua, director of SmartLoans.sg
This would allow him to buy a three-room flat almost anywhere in Singapore, or a four-room flat in a suburban neighbourhood such as Woodlands, Yishun or Choa Chu Kang. It would also allow him to buy a private shoebox apartment - units smaller than 500 sq ft - in developments outside of the central region.
But the options shrink along the age and income spectrum.
A single above the age of 40 and making $5,000, would be able to get a loan of only $255,000 to $300,000. A single aged 35 and making $4,000 a month would be able to get a loan of $265,000 to $310,000. This makes only three-room resale flats affordable, and such units in popular locations such as Queenstown and Toa Payoh could be a stretch.
These calculations by Mr Kua assume that the single in question has no other debt or property.
According to analysts, while singles are generally more cash-rich than families, they usually go for resale three-room flats over private shoebox units as they can get more space for less cash.
Shoeboxes, observers say, are more often bought by investors to rent out, than by singles to live in.
"If they buy a resale flat, they can also use cash saved to do extensive renovations. A lot of them knock the walls down to create a bigger living area," said DWG senior manager Lee Sze Teck.
Of the 4,000 singles who buy resale flats every year, over 80 per cent buy three- or four-room flats, said HDB. Most singles bought three-roomers last year.
Despite the new two-room unit option, observers expect the three-room resale flat segment to remain the top choice for singles.
Besides the unit being bigger, singles can also get the keys to a resale flat immediately, in contrast to the two- to three-year wait for a Build-To-Order flat.
Ms Rachel Woon, 35, recently sealed the deal on a three-room unit in Bishan for $420,000, of which $40,000 was cash-over- valuation. "Although the Government was talking about it, I didn't know when it would happen and when you could get a flat, and I did not want to wait indefinitely," said the health-care employee. "My priority was to have a place now."
[email protected]
For her, a three-room resale flat For others, there's a new option
Two-room flats for singles: Too small, too far away, say some, but others welcome them
Published on Mar 16, 2013
By Rachel Chang
TO DESIGN consultant Thomas Tan, 38, HDB's announcement this week that it will soon launch two-room flats for singles like him has come as a lifeline.
He has been keen to buy his own property for a while, but effectively had no options as the rising resale flat market put prices out of his reach.
"For the past few years, the price was so high that I couldn't be bothered to look seriously because I would only have made myself more depressed," he said. "Private property seemed even worse."
He is keen to give the new two-room flats a try. "I'll definitely be putting my name down in July. A two-room in Sengkang is better than nothing."
Already, the Housing Board's flats for singles have been pooh-poohed by some for size and location restrictions. The two-room flats will be just 375 sqft or 485 sq ft, and in non-mature estates such as Sengkang.
But the move has created a new housing option for singles where previously they had only two - if they could afford them.
Until now, singles who wanted a property of their own and who earned about $5,000 a month - the income cap for the new flats - either went for a three-room resale flat or a private shoebox unit.
A 35-year-old single making about $5,000 a month can secure a mortgage of $330,000 to $390,000, said Mr Timothy Kua, director of SmartLoans.sg
This would allow him to buy a three-room flat almost anywhere in Singapore, or a four-room flat in a suburban neighbourhood such as Woodlands, Yishun or Choa Chu Kang. It would also allow him to buy a private shoebox apartment - units smaller than 500 sq ft - in developments outside of the central region.
But the options shrink along the age and income spectrum.
A single above the age of 40 and making $5,000, would be able to get a loan of only $255,000 to $300,000. A single aged 35 and making $4,000 a month would be able to get a loan of $265,000 to $310,000. This makes only three-room resale flats affordable, and such units in popular locations such as Queenstown and Toa Payoh could be a stretch.
These calculations by Mr Kua assume that the single in question has no other debt or property.
According to analysts, while singles are generally more cash-rich than families, they usually go for resale three-room flats over private shoebox units as they can get more space for less cash.
Shoeboxes, observers say, are more often bought by investors to rent out, than by singles to live in.
"If they buy a resale flat, they can also use cash saved to do extensive renovations. A lot of them knock the walls down to create a bigger living area," said DWG senior manager Lee Sze Teck.
Of the 4,000 singles who buy resale flats every year, over 80 per cent buy three- or four-room flats, said HDB. Most singles bought three-roomers last year.
Despite the new two-room unit option, observers expect the three-room resale flat segment to remain the top choice for singles.
Besides the unit being bigger, singles can also get the keys to a resale flat immediately, in contrast to the two- to three-year wait for a Build-To-Order flat.
Ms Rachel Woon, 35, recently sealed the deal on a three-room unit in Bishan for $420,000, of which $40,000 was cash-over- valuation. "Although the Government was talking about it, I didn't know when it would happen and when you could get a flat, and I did not want to wait indefinitely," said the health-care employee. "My priority was to have a place now."
[email protected]