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Response to new housing grant 'most encouraging'

More than one in five resale flat buyers have applied for the Proximity Housing Grant

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THE WAY FORWARD: 'We had deliberately extended the PHG to all Singaporean families looking to buy a resale flat with or near their parents or married children. So there's no household income ceiling,' Mr Wong said.

Singapore

RECENT measures relating to the Housing & Development Board (HDB) resale market have been greeted with strong response, with more than one in five buyers of resale flats over the past two months having applied for the Proximity Housing Grant (PHG).

With the raising of income ceilings for citizen households to buy new and resale flats with the CPF Housing Grant, about one in 10 first-timer families and singles are now eligible for the CPF Housing Grant because of the higher income ceiling of S$12,000 and S$6,000 respectively.

Almost one in three new executive condominium (EC) buyers is benefiting from the new S$14,000 income ceiling, which was previously at S$12,000.

These figures were fleshed out in a blog entry by Minister for National Development Lawrence Wong on Friday.

Mr Wong noted that the response towards the PHG scheme, among measures that kicked in on Aug 24, "has been most encouraging".

Under the PHG scheme, all Singapore citizen families who buy a resale flat to live with or near their parents or married child will receive a one-time PHG of S$20,000; eligible singles will enjoy a PHG of S$10,000 if they buy a resale flat with their parents.

"We had deliberately extended the PHG to all Singaporean families looking to buy a resale flat with or near their parents or married children. So there's no household income ceiling," Mr Wong said.

"Even those who had enjoyed housing subsidies or owned private property before can qualify for the grant. We did this because we recognise that the desire to live closer to parents and children is shared by a wide spectrum of Singaporean households, and not just first-timer couples."

Nearly half of the families and about nine in 10 of the singles who applied for the PHG would have been ineligible for any such grants under previous rules.

According to the MND, there were 3,506 resale transactions over a two-month period since Aug 24. This could mark an increase from some 3,022 resale flats transacted during the September-October period last year, going by the latest SRX Property report that tracks monthly HDB resale transactions.

Century21 Singapore CEO Ku Swee Yong felt that as more buyers will now consider buying HDB resale flats in view of the PHG, this may prop up HDB resale prices. "This category of buyers are owner-occupiers. And if demand from them swings to resale HDBs, the resale private apartments and resale ECs will lose these potential buyers."

Holding a different view, R'ST Research director Ong Kah Seng noted that while more buyers may opt for an EC with the raising of income ceiling, this "may not happen at an excessive pace such that it draws many buyers away from the private condominium market" since the housing rules forbid them from renting out a new EC unit for the first five years.

Also, the response rate for PHG reflects warm response from resale flat buyers, and not an excessive rush-in to enjoy the benefits of PHG, Mr Ong said. "The initial response rate reflects that buyers are keen in the scheme, but are still critically evaluating their housing requirements and the unit holistically, preferring a flat that best match their expectations, affordability, and future gains upon resale."