The HDB resale market showed a rise in the number of flat transactions in October 2019. According to market analysts, a total of 2,213 HDB flats were transacted in October alone. The highest of these transactions – a sizable 40.8% – was made up of 4-room flats, followed by 5-room flats (24.3%), 3-room flats (25.4%) and executive flats (7.5%).
Possible Reasons for Increased Number of Flats Sold
1. Enhanced Housing Grant (EHG)
The reasons for the sudden jump in flat transactions could be attributed to the recent introduction of the Enhanced Housing Grant (EHG), a first-time home buyer’s grant with an attractive, higher-income ceiling that is applicable to both BTOs and resale properties.
Announced as a replacement of the Additional CPF Housing Grant and Special CPF Housing Grant – you can even think of it as a combination of the two – this Grant boasts a higher income ceiling to include more families looking to buy a home for the first time.
First-timers with a monthly household income of up to $9,000 can look forward to a Grant amount of up to $80,000. This is based on the condition that the home’s balance lease will be able to last them up to the age of 95. If the balance lease falls short of this, the EHG amount will be pro-rated.
This less restrictive version of your run of the mill housing Grant allows families looking to buy bigger flats (eg. 5-room) in mature towns to fall under the eligibility criteria too, ultimately making homeownership a lot more accessible for Singaporeans!
Say you and your family successfully booked a 5-room BTO flat at GreenGlen for the first time. The selling price, which starts from $418,000 before the grant will be reduced to $388,000 after the grant, a welcome respite from forking out more than $400,000 for your first home.
2. New CPF rules
The old flat-friendly CPF rules was recently introduced on 9 May 2019 as a way to allow greater flexibility for buyers of older flats and prevent them from out-living their leases, while at the same time ensuring sufficient funds for retirement.
The new rules are based on whether the property’s remaining lease can cover the youngest homebuyer up to the age of at least 95 years old. This is good news for home buyers looking to get older homes in mature estates and old flat owners who want to sell their property.
3. High Number of Flats that Reach Minimum Occupation Period (MOP)
The higher number of flats changing hands could also be simply due to the increased supply of flats in the market as BTOs from 2013/2014 to reach their MOP. According to analysts, a total of 2,320 BTO flats will populate the resale market in the next 3 months.
Does these buyer-friendly developments motivate you to buy your next property? We provide top-notch agent services from $2888 for aspiring resale home buyers. Call 6886 9009 now to learn more!
Source: Business Times
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