Resale flats: First-time buyers get higher subsidies

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http://www.straitstimes.com/singapor...gher-subsidies

Resale flats: First-time buyers get higher subsidies

Feb 21, 2017

Rachel Au-Yong


First-time buyers looking for a resale HDB flat cheered when they found out they would get higher subsidies for their purchase.

The CPF Housing Grant has been raised to $50,000 for couples who purchase two- to four-room flats from the resale market, and $40,000 for couples who purchase five-room or bigger flats. The grant was previously capped at $30,000.

Finance Minister Heng Swee Keat said the move was part of a package to "keep Singapore a great place for families".

In his Budget statement yesterday, he noted that while most couples apply for highly subsidised Build-To-Order (BTO) flats, some have to turn to the resale market where flats are typically pricier.

Eligible couples can now receive up to $110,000 in subsidies after factoring in the Additional CPF Housing Grant and Proximity Housing Grant.

Mr Zhuang Changzhong, 26, and Ms Valencia Soh, 24, welcomed the news. The trainee lawyers will wed in December and are looking for a four-room flat that costs around $600,000 in Bishan, which is near the home of Mr Zhuang's parents, the church the couple go to and their workplaces.

"The added $20,000 is very significant - it could help to offset the 5 per cent down payment if we find the right flat," Mr Zhuang said.

In a Facebook post, National Development Minister Lawrence Wong said the higher subsidies will help those who wish to move into their own home quickly to start a family, or those wanting to live near their parents in mature estates with fewer BTO flats.

In a statement yesterday, the Ministry of National Development and the HDB said singles will enjoy a similar grant increase. They will receive half the quantum couples get.

The measure will cost the Government an additional $110 million a year. It applies to eligible resale flat applications received from 3.30pm onwards yesterday.

Industry watchers said the increased grant would make resale flats more affordable and attractive to first-timers. Last year, about 6,600 households benefited from the CPF Housing Grant.

The increased grant is timely as more resale flats are coming onto the market, said Ms Christine Li, research director at Cushman & Wakefield Singapore. Some 18,000 BTO units reached their minimum occupation period last year - 80 per cent higher than in 2015.

"The grant can help to soak up additional resale supply, particularly for those who need to dispose of flats after they take possession of new BTOs, executive condominiums and private properties."

R'ST Research director Ong Kah Seng expects the grant to boost flat prices by about 0.4 per cent in mature estates, and have little impact on prices in non-mature estates. He said it is unlikely to affect demand for BTO flats. "Most young couples will be prudent. Also, BTO flats are generally seen as fresher and more comprehensively planned."

Pre-school teacher Kristi Ng, 28, who is looking for a five-room flat around Bukit Timah with her husband, said: "The grant won't offset that much for us, but all help is welcome. It would help with the renovation budget and conveyancing fees."

Some buyers who submitted their resale flat applications recently and before the 3.30pm cut-off time took to Facebook to complain.

The HDB told The Straits Times that it will not implement the grant retroactively, but added that those with ongoing transactions can ask for assistance.

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BUDGET 2017: STRENGTHENING SOCIETY

Higher grants for first-time buyers of HDB resale flats

Support for families also comes in the form of more childcare places and post-secondary bursaries, and S$280m in one-off GST vouchers

Tuesday, February 21, 2017

by Judith Tan
[email protected]
@JudithTanBT


A YOUNG couple buying a resale HDB flat for the first time will be enjoying higher subsidies of up to S$50,000 from today.

And piling on the additional CPF Housing and Proximity Housing grants would mean the couple getting up to S$110,000 in subsidies.

Announcing this in his Budget statement yesterday, Finance Minister Heng Swee Keat said this measure, which helps to keep Singapore "a great place for families", is expected to cost the government an additional S$110 million a year.

With immediate effect, the CPF Housing Grant will rise from S$30,000 to S$50,000 for couples buying 4-room or smaller resale flats; and from S$30,000 to S$40,000 for 5-room or bigger.

Mr Heng told Parliament that while many couples "start their lives together by applying for BTO flats", resale flats meet the needs of others better.

Similarly, first-timer singles buying resale flats will also benefit from enhancements to the CPF Housing Grant. In a joint statement, the National Development Ministry (MND) and the Housing and Development Board (HDB) said the grant quantum, which is half that for families, will be increased from S$15,000 to S$25,000 for those buying a 4-room or smaller resale flat; and from S$15,000 to S$20,000 for those buying a 5-room.

Miss Tan Yun Yun, 27, who just got engaged two weeks ago, the S$10,000 saved would come in handy for their wedding next year.

"With the additional subsidies, it would also mean less time to repay the housing loans taken with the bank," she said, adding that they will be getting a flat in the west to be close to both sets of parents.

"But my dilemma here is we had just put in our application for the resale flat late last week and we were told this increase in the (CPF) housing grant only applies from Feb 21. We are getting our housing agent to speak to HDB to see if we can still qualify," she said.

The Budget this year seemed to have moved away from merely providing more money in the kitty for baby.

Instead, Mr Heng said he will be doubling the capacity of centre-based infant care from the present-day 4,000 to over 8,000 by 2020.

At the same time, the government will not only increase the bursary amounts for post-secondary education, but also extend these bursaries to more families by revising the income eligibility criteria. This translates to about 12,000 more Singaporean students benefiting.

Singapore Management University (SMU) law don Eugene Tan said: "We may be at the stage where marriage and parenthood incentives are now less on direct benefits but more on creating an enabling environment. The cash-for-babies approach is on its last legs as it has an accent of being a financial transaction. It suggests that the way forward is to provide support, whether it's housing grants, childcare facilities, and education grants, that are better and sustainable nudges in getting young Singaporeans the family way."

Agreeing, National University of Singapore sociologist Tan Ern Ser said: "Child-raising is a long-term commitment. I reckon baby bonus is, by comparison, pretty short-term and occurs after a couple ties the knot. Whereas housing grants facilitate couples getting married in the first place, an important step before they even think about starting a family, while children's education matter for the long-term and their long-term well-being."

Prof Tan said the government pointed to a "more nuanced way to change mindsets and make Singapore more family friendly". "This move towards more nuanced incentives is likely to be received and more effective in the long run," he said.

The government is also giving additional support to the tune of S$850 million to defray household expenses, especially those linked to higher water prices and higher service and conservancy charges (S&CC).

It will provide a one-off GST voucher, costing about S$280 million in all, to help lower income households with expenses.

It will also spend S$71 million in rebates to cover higher water expenses. The funds will go towards the GST Voucher - U-Save Rebate scheme. It is meant to offset some of the increases in water prices.

Three in four HDB households will see an average increase of less than S$12 in their monthly water expenses.

The government will also extend the S&CC rebate, and raise it by 0.5 months for fiscal 2017, costing them S$120 million.

Note: An earlier version of this article stated that the enhanced grant quantum for first-timer singles buying resale flats will be increased from S$15,000 to S$20,000 for those buying a 5-room or larger flat. HDB has since clarified that it is for those buying a 5-room flat only, and not larger flats. The article above has been revised to reflect this.

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BUDGET 2017

Enhanced grants expected to lift resale HDB market

Tuesday, February 21, 2017

by Lynette Khoo
[email protected]
@LynetteKhooBT


THE move to enhance the CPF Housing Grant for first-time buyers of resale HDB flats is expected to help sustain the recovery in resale transactions and stabilise resale prices.

While most market watchers were not surprised that the government chose against tweaking any property cooling measure, such a boost in housing subsidy for resale flats did catch many off guard.

Some consultants, including Cushman & Wakefield research director Christine Li, posit that this is to help soak up additional HDB resale supply as more people are taking possession of newly completed Build-To-Order (BTO) flats, executive condominiums (ECs) and private homes.

"The grant, targeted at the resale market, is timely as a large volume of BTO HDB units, totalling about 18,000, reached the end of their minimum occupation period (MOP) as at end-2016. This is 80 per cent higher than the number of units that reached MOP in 2015."

Concurring, International Property Advisor key executive officer Ku Swee Yong noted that despite a recovery in resale transactions last year, the pace of sales was still slow for HDB upgraders who have to sell their existing flats within six months from collecting keys to their new ECs or HDB flats.

"Still, a property measure coming in this form in the Budget is largely unexpected," he said. Mr Ku also foresees that there may be some cannibalisation of demand from first-timer families who are wavering between buying an EC or a resale HDB flat.

As part of the Budget 2017 measures announced on Monday, the government will increase the CPF Housing Grant for first-timer families and first-timer singles buying resale HDB flats.

With the enhancements, first-timer families can now receive up to S$110,000 in grants, including the Additional CPF Housing Grant (up to S$40,000) and Proximity Housing Grant (S$20,000).

Similarly, eligible first-timer singles buying resale flats can enjoy up to S$55,000 in housing grants, including the existing Additional CPF Housing Grant (up to S$20,000) and Proximity Housing Grant (S$10,000).

Minister for National Development Lawrence Wong said in his Facebook post on Monday that this would help those who wish to live near their parents in mature estates where there are fewer BTO projects, or those who wish to move into their own home quickly to start a family.

The latest BTO exercise, which closed on Monday, saw overwhelming applications for flats in mature estates Clementi and Tampines, which were over three times subscribed. Flats in Punggol were about 2.7 times subscribed; 5-room flats in Punggol saw the highest subscription by flat-type at 5.2 times.

Last year, resale HDB transactions rose for the second year in a row - by 7.8 per cent from a year ago to 20,813 even as resale prices dipped 0.1 per cent over the same period.

JLL national director for research and consultancy Ong Teck Hui said that he did not see the latest measure as an intention to move the residential market, though a healthy HDB resale market with stable prices may lift the sentiment for upgrading, hence resulting in a positive spillover effect for private housing.

With the expected boost in demand arising from the increased housing subsidy, resale prices should either stabilise or rise slightly, Mr Ong said.

However, some market watchers were disappointed with the lack of relief on taxes on vacant land and properties or land slated for development.

"Any reduction in property tax would certainly help developers and owners of vacant properties cope with the slowdown in the property market," said KPMG head of real estate Tay Hong Beng.

On property cooling measures, he felt that there was nothing to stop the government from reviewing the situation at a later stage. "Changes to the rules could probably be brought about in a gradual manner in order not to unintentionally create an immediate spike in demand in the property market."