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26-09-14, 18:50
http://www.businesstimes.com.sg/archive/thursday/premium/singapore/downpayment-new-flats-halved-some-rightsizers-20140925
Published September 25, 2014
Downpayment for new flats halved for some rightsizers
New policy will benefit flat owners who have their funds tied up in their current flat: HDB
By lee meixian
[email protected] @LeeMeixianBT
THE Housing & Development Board (HDB) on Wednesday launched 4,630 new build-to-order (BTO) flats in September's exercise.
These flats are spread across six projects in the non-mature towns of Bukit Batok, Hougang and Jurong West, and the mature town of Kallang Whampoa. Application for these new flats can be submitted online from Sept 24-30.
Starting from this BTO exercise, existing flat owners who rightsize to a new two-room or three-room flat in a non-mature town can choose to pay half the downpayment for the new flat when they sign the lease agreement.
This is to help flat owners who wish to rightsize to a new flat but have their funds tied up in the existing flat, HDB said.
"For those who are not taking up a loan or who are taking up an HDB loan, they need to pay only a 5 per cent downpayment upfront, instead of the current 10 per cent.
"For those who are taking up a loan with financial institutions, they need to pay only a 10 per cent downpayment upfront, instead of the current 20 per cent," HDB said.
The remaining half can be paid together with the balance purchase price of the new flat when they collect the keys for the new flat.
National Development Minister Khaw Boon Wan in a blog post on Wednesday said he was "glad" with this policy change.
"At Meet-the-People sessions, I sometimes meet elderly residents who intend to rightsize to a smaller flat but face some cash-flow difficulties in the process.
"HDB told me that, in 2013, 47 elderly cancelled their new flat bookings, because they were unable to raise the downpayment. They must have felt disappointed, having to abort their plans because of a cash-flow problem," he wrote.
With the change, sale proceeds from the existing larger flat will be enough to pay for the new smaller flat, provided that buyers sell their flat first to raise the funds for the new purchase.
R'ST Research director Ong Kah Seng expects the policy tweak to be welcomed by the elderly, and even more so by adults who are approaching their retirement years in a decade's time.
"Recently, the government fine-tuned the lease buyback programme by adjusting the tenure that different elderly can retain upon opting for a lease buyback. This will inject flexibility into the scheme (announced on Wednesday).
"Retirees-to-be will now likely be more open to rightsizing . . . An adult in his 50s who adopts this option might still be able to monetise his asset through lease-buyback 15-20 years later when he reaches around 70 years. Such a two-pronged asset-monetising approach is possible as our elderly profile gets more financially savvy and open-minded," he said.
Flat buyers do not need to apply for the staggered downpayment scheme. HDB will extend it to those who are eligible.
In November, HDB will offer about 4,290 BTO flats in Sembawang, Sengkang, Tampines and Yishun. Another 3,000 flats will be offered in a concurrent Sale of Balance Flats (SBF) exercise.
Published September 25, 2014
Downpayment for new flats halved for some rightsizers
New policy will benefit flat owners who have their funds tied up in their current flat: HDB
By lee meixian
[email protected] @LeeMeixianBT
THE Housing & Development Board (HDB) on Wednesday launched 4,630 new build-to-order (BTO) flats in September's exercise.
These flats are spread across six projects in the non-mature towns of Bukit Batok, Hougang and Jurong West, and the mature town of Kallang Whampoa. Application for these new flats can be submitted online from Sept 24-30.
Starting from this BTO exercise, existing flat owners who rightsize to a new two-room or three-room flat in a non-mature town can choose to pay half the downpayment for the new flat when they sign the lease agreement.
This is to help flat owners who wish to rightsize to a new flat but have their funds tied up in the existing flat, HDB said.
"For those who are not taking up a loan or who are taking up an HDB loan, they need to pay only a 5 per cent downpayment upfront, instead of the current 10 per cent.
"For those who are taking up a loan with financial institutions, they need to pay only a 10 per cent downpayment upfront, instead of the current 20 per cent," HDB said.
The remaining half can be paid together with the balance purchase price of the new flat when they collect the keys for the new flat.
National Development Minister Khaw Boon Wan in a blog post on Wednesday said he was "glad" with this policy change.
"At Meet-the-People sessions, I sometimes meet elderly residents who intend to rightsize to a smaller flat but face some cash-flow difficulties in the process.
"HDB told me that, in 2013, 47 elderly cancelled their new flat bookings, because they were unable to raise the downpayment. They must have felt disappointed, having to abort their plans because of a cash-flow problem," he wrote.
With the change, sale proceeds from the existing larger flat will be enough to pay for the new smaller flat, provided that buyers sell their flat first to raise the funds for the new purchase.
R'ST Research director Ong Kah Seng expects the policy tweak to be welcomed by the elderly, and even more so by adults who are approaching their retirement years in a decade's time.
"Recently, the government fine-tuned the lease buyback programme by adjusting the tenure that different elderly can retain upon opting for a lease buyback. This will inject flexibility into the scheme (announced on Wednesday).
"Retirees-to-be will now likely be more open to rightsizing . . . An adult in his 50s who adopts this option might still be able to monetise his asset through lease-buyback 15-20 years later when he reaches around 70 years. Such a two-pronged asset-monetising approach is possible as our elderly profile gets more financially savvy and open-minded," he said.
Flat buyers do not need to apply for the staggered downpayment scheme. HDB will extend it to those who are eligible.
In November, HDB will offer about 4,290 BTO flats in Sembawang, Sengkang, Tampines and Yishun. Another 3,000 flats will be offered in a concurrent Sale of Balance Flats (SBF) exercise.