The enhanced Central Provident Fund Housing Grant, previously capped at $30,000, has been raised to $50,000 for first-timers who turn to the resale market for four-room and smaller flats. And it has risen from $30,000 to $40,000 for five-room and larger flats.
Including the Proximity Housing Grant (PHG) and Additional CPF Housing Grant, couples buying a four-room or smaller flat can get up to $110,000 in subsidies.
However, the project still goes ahead for young couples to own a home ownership is the Build-to-Order (BTO) programme – where couples apply to ballot for a chance to select a flat in the proposed sites, and provided there is sufficient interest.
The latest BTO exercise that ended on Monday was mopped up quickly. The huge demand for BTO flats, even as the Housing Board (HDB) has taken great effort to clear the backlog of the early 2010s.
Against that frustrating backdrop, the increased grant for the other option – resale units – certainly seems to be cause for first-timers to now sit down and work out their financial.
The Proximity grant increase from $10,000 to $20,000 which helps to boost in grants that go into buyer CPF Ordinary Accounts helps to offset the purchase price of the resale flat, and reduces the housing loan they have to take. Set apart, the grant is not so high as to skew prices significantly, industry observers say. Resale prices last year stayed flat, falling just 0.1 per cent a year ago.
Some 18,000 flats reached the minimum occupation period to qualify to be sold off last year – 80 per cent more than in 2015. Some of these owners are upgraders, which have to sell off their flats as soon as possible.
R’ST Research director Ong Kah Seng estimates that prices in mature estates could rise by 0.4 per cent maximum, and not much changes in non-mature estates.
“At most, the grants will help move flats faster,” he said. “But they are unlikely to give owners the upper hand in negotiation. Young couples are savvy enough to know they have options.”
BTO vs RESALE FLAT?
BTO residences remain the most financially prudent choice. Homeowner are almost assured a high go back on their asset, have to they pick to sell it later. This is because the apartments are closely subsidised, and houses are more and more built with better facilities and designs.
For the ones searching out resale flats in non-mature estates, mainly if their parents or family are also inside the location, they are able to now get as a minimum $70,000 to $110,000 in grants – which can be enough to clinch the choice.
Check it out for some choice of Executive Condominium in the market.
Source: http://www.straitstimes.com/opinion/bto-v-resale-flat-what-adds-up-for-first-timers
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