Some new BTO flats are up for grabs, from Telok Blangah, Sengkang, and Yishun. But these aren’t just flats, in the same way the constitution isn’t just a piece of paper. These flats are history people. Because HDB is finally catering to singles, who were on the brink of organizing gladiatorial death matches in their squabble for resale flats. In this flash article, we take a quick (still speculative) look at this government giveaway:
How Affordable are the New Flats?
Some of the flats start from $16,000. Don’t flip out and have a fit yet, I said “start from” $16,000. As in, those are the cheapest ones.
Also, $16,000 assumes you get every possible subsidy. The actual price of the flats, minus subsidies, starts from $76,000.
However, this can be changed by the following:
Additional CPF Housing Grant – If you make $2,500 or less a month, and apply for the flat on your own (Single Singapore Citizen Scheme or SSCS), you get a $20,000 grant.
Applying Under Joint Singles Scheme – If two singles apply for a flat together (under the Joint Singles Scheme, or JSS), they get to stack their additional CPF housing grants (see above). So that’s a $40,000 grant for two people.
Special CPF Housing Grant – If you make $1,125 or less a month, you get an additional grant of $10,000 per month.
Not-Being-Married Fine (I made that name up) – If you apply singly, you pay an additional $15,000. Because babies are cool, the government says, and stuff you if you don’t agree.
If two singles apply under JSS, they are treated as a married couple (no fine). If these two people later get married, they’ll get a CPF top-up of $15,000.
At this point, you’ll feel a slight pressure on your frontal lobes. That’s the migraine from trying to process all the grants. Stop re-reading and take the government’s word for it:
The total possible grants amount to around $60,000.
Hence, the cheapest possible flat is $16,000. But in all likelihood, a lot of applicants might pay around $32,000. But hey, that’s still much cheaper than a resale flat.
Catering to Singles at Last
About 173 2-room, BTO flats have been set aside for single Singaporeans. This will be the first time that singles get to buy new flats. Restrictions are basic: They have to be 35 years old, and earning $5,000 a month or less.
Singles can also make joint applications, under the Joint Singles Scheme (JSS). Some key details to note here:
1. Catering to Singles at Last
About 173 2-room, BTO flats have been set aside for singles, with more on the way. This is the first time singles will be able to buy flats directly from HDB.
Minister Khaw Boon Wan did mention he would look into housing for singles, so here it is. Single parents, or Singaporeans needing a space of their own, have a lot to look forward to.
On the other hand, this approach also reduces demand in the resale flat market; it might be the final straw for already declining cash-over-valuation. Bad news for sellers, but it’s probably the right move on a macro-economic level.
2. The Raised Income Ceiling
Previously, you had to be earning $2,000 or less to get one of these flats. The government had them set aside for low income families, and credit card holders who think Farmville tomatoes are good investments. This has just changed.
I asked our resident property expert, Timothy Kua, about the impact of the raised ceiling:
“Previously, couples earning between $2,000 to $5,000 were stuck with limited HDB housing options. This move opens up more choices for them. However, whether this segment will willingly compromise with a 2-room flat remains to be seen.”
Follow us on Facebook, as we monitor the demand. Also, do comment and let us know: Would you compromise with a 2-room flat?
3. These Flats are in Non-Mature Estates
These flats don’t have as many amenities as, say, the ones in Queenstown or Marine Parade. They haven’t been around long, and won’t have lots of malls, hawker centres, etc. around them.
Now as the estate matures, the value of the flats will rise. So in a purely financial sense, this is a good deal: You’d be buying low and selling higher. But not everyone cares about profit. Will some Singaporeans (particularly those with incomes near the limit of $5,000) want to forego convenience in view of future profit?
Comment and let us know what you think!
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