Published July 27, 2006

More non-related singles buying property together
CPF Board approves 637 applications as at June 30, against 321 in December


MORE non-related singles have jointly bought property. According to the Central Provident Fund (CPF) Board, as at June 30, it has approved 637 applications from non-related singles wanting to use their CPF savings to buy private property together.

In October 2005, CPF told BT that it had received 159 applications. By December, the number of approved applications hit 321.

The number may not seem very big but CPF only started to allow non-related singles to buy private property with their savings in July 2005 as part of a basket of property-related measures.

Of these measures, the other significant change was that CPF savings could be used to buy properties with remaining leases of 30 to 50 years.

Previously, only private homes with remaining leases of at least 60 years could be bought.

On this change, CPF also announced yesterday that it has approved 29 applications for such property purchases in the same period.

Knight Frank director of consultancy and research Nicholas Mak said that the numbers in both cases are still not significant enough for the industry, including property developers, to 'sit up and take notice'.

'It would be useful if CPF released more information on the demographics of these people. For instance, it would be interesting to know if they were retirees,' he said.

He added that he believes these are buyers looking at mid-range developments because high-end buyers would not have problems financing a property purchase.

By Mr Mak's estimation, the number of non-related singles using CPF savings amounts to only about 3-4 per cent of the number of total property transactions over the last 12 months.

Relaxation on the age of leasehold developments has also not generated many new buyers.

Jones Lang LaSalle regional director and head of investment capital markets Lui Seng Fatt said: 'Financing providers, banks and finance companies included, generally assess the lending risk of such shorter lease properties more stringently.'

He added that the low numbers of buyers for old leasehold homes could also be due to its lower investment value.

Asked if recent en bloc sales of leasehold developments would change public perception, Mr Lui said: 'Leasehold properties have been around for more than 30 years and buyers are generally familiar with them but the key issue is how much discount investors want for leasehold properties.

'The 99-year leasehold properties in prime districts 9, 10, 11 and 15 are generally well received and do not have any difficulty in finding investors.'

The numbers, though small, are still worth noticing, not least because it reflects lifestyle trends.

Noting that couples buying Housing and Development Board flats have to be married, Chesterton International head of research Colin Tan said: 'Actually the suburban condo market is very stable now and pretty affordable. It is a good opportunity to jump straight into the private sector without having to go through ownership of an HDB apartment.'

He did, however, say that he believes these couples probably intend to marry in the future.

'Of course, there will be the odd case here and there - such as your gay couples,' he added.