http://www.businesstimes.com.sg/arch...-ring-can-wait
Published June 11, 2012
HDB first - the ring can wait
Why more young couples are deciding to buy a flat together before saying 'I do'
By rachel au-yong
[SINGAPORE] A small but significant number of under-25s are putting down the deposits for their first flats even before the man has gone down on one knee.
Housing and Development Board (HDB) records show that under-25s formed 32, 39 and 35 per cent of its Fiance-Fiancee Scheme between 2009 and 2011 respectively. The median age of this group is 27.
National Development Minister Khaw Boon Wan noted last year that more than half of first-time buyers applied under the scheme. First-timers form 65 per cent of all applicants, he said, and 95 per cent of flats in Build-to-Order (BTO) launches are reserved for them.
Young couples are also buying comparatively more expensive executive condos. Developer MCC Land's senior manager Richard Nah said he had two couples, both where the female was just under 18, applying for flats in recently launched 1 Canberra in Yishun.
The Business Times spoke to several young couples, all university students, fresh graduates, or relatively new entrants to the workforce with one or two years of experience. All were not deterred by their young age, smaller incomes, or even the lack of an official engagement.
In fact, many agreed that buying a house first "makes sense".
"You need a house first before you can even think of building a family," said student Janet Ang, 22.
Ms Ang and her now-fiance, 25, dropped close to $20,000 on a four-bedder in Sengkang last year. Her fiance, a church music instructor, financed the downpayment with his CPF and a partial loan from his mother.
For others, buying a house is all about the circumstances - and whether the time is right.
After Mr Khaw "gave his assurance to help prices come down" in June 2011, accountant Regina Tan, 24, and her civil servant boyfriend started keeping an eye out for properties that fit their criteria.
"Subsidised housing gives you more returns in the future, especially if you get it at a good time," she said, adding that she paid "a lot less" than her friend who bought a similar-sized unit in the area last year.
The couple successfully balloted for their first flat, in Sengkang, last month.
More modern-looking designs in the HDB repertoire sit well with young couples too.
Law student Marco Low and his fiancee, Mavis Long, both 24, fell in love with the SkyVille@Dawson project in Queenstown.
"Our flat was in a good location near our parents, but the architecture pushed us to make our decision," Mr Low said, acknowledging the difficulty of getting a new flat in mature estates like Queenstown.
Designed by top home- grown architects, SkyVille @Dawson belongs to a new generation of flats that look like private condos, at a considerably lower price.
The couple forked out slightly over $30,000 in deposit and legal fees for the $445,000 four-room flat.
Others find that getting public housing is the luck of the draw, and would rather not wait till they are engaged to attempt securing a flat.
Not only is it close to a three-year wait for Build- to-Order blocks to be constructed, but the application process is no guarantee of a flat.
"I'm 25 now, but I may be 28 or even 30 when I get the keys," said recent Nanyang Technological University graduate Peter Tan.
The electrical engineering major is balloting now to avoid his older brother's predicament: the latter had to apply for a flat three times before he finally managed to get one.
Mr Tan also touts the benefits of getting a house first: "Waiting for a house means you have at least three years to think about marriage and what it means to you and your future spouse."
Under HDB's Fiancé/Fiancée Scheme, a couple must produce a wedding certificate three months after taking possession of a flat. But when the proposal happens is entirely up to the couple.
With the strong demand for public housing, will eager young buyers add to the pressure? After all, BTO flats are often associated with long lines, anxious waits and oversubscription.
Such young couples have "conflicting interests" in the battle for scarce property, said R'ST Research director Ong Kah Seng.
"Their ability to plan ahead of time may price out those who need the flats more urgently, like married couples hoping to have children in the immediate future," added Mr Ong. "HDB might have to prioritise those who need it now if more young couples edge them out."
"Not all first-time buyers are the same. Having a child ought to mean that you're prioritised higher in your wait to get a flat," said Max Goh, 30, a People's Association executive. Mr Goh and his wife have a four- month-old child. They were unsuccessful in their bid for a Clementi BTO flat in March.
But he also acknowledged that he's particular about where he wants his future home to be: preferably in established estates in the west, where there are comparatively fewer BTOs.
"Maybe it's closed thinking, but I don't feel like I could live in Punggol or Sengkang," he said, when told of four new BTOs opening up for application this month. "I'm too used to living in the west."
But even if some young couples are less concerned about location, they must still be sure about their relationship before they sink money into a large asset like a house.
Last July, a buyer who bought a flat under the Design, Build and Sell Scheme (DBSS) with her fiance ended up paying $120,000 in penalties and legal fees after the wedding was called off.
An HDB spokesman said the board advises young couples to "think through their options carefully" as buying a flat is a major decision, adding that HDB is always present to offer its assistance.
"If the essence of the relationship is sound, then getting an HDB flat before a couple gets engaged is just another way of enhancing their future marriage," said Kit Ng, director of the Centre for Psychology.
It also makes financial sense for young couples who are sure they want to tie the knot to purchase property early.
Only one member of the couple needs to be working for at least a year before they apply for a flat. Taking advantage of the low income cap, couples can have "significant savings" if they get a flat earlier, said Colin Tan, research head at Chesterton Suntec International.
Estimating that property prices rise about 5 per cent each year, Mr Tan said this could mean a 15 per cent price difference if a couple decided to try for a flat when they might be officially engaged three years later.
"If you're sure now, you'd be financially better off," Mr Tan said. "Once you miss the boat, you'll either have to wait or buy more expensive private housing."
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