Higher grants: No rush to cancel earlier HDB resale transactions

Singapore

THE two largest property realtors in Singapore have yet to receive any cancelled prior sale submissions for resale flats following the announcement of bigger housing grants for first-time HDB buyers in the Budget reading on Monday.

Finance Minister Heng Swee Keat had announced in Parliament that young couples buying a resale HDB flat for the first time will be enjoying higher subsidies of up to S$50,000.

And with the additional CPF Housing and Proximity Housing grants, it would mean getting up to S$110,000 in subsidies. Unfortunately, those who made transactions before the announcement had fallen to the wayside.

Eugene Lim, the key executive officer of ERA Realty Network, told The Business Times that the number of resale flats bought by first-timers in the last week "were very few or none at all as there was a BTO (Build To Order) launch ongoing".

Chief executive of PropNex Realty Ismail Gafoor said that even with additional grants, not all new buyers will turn towards resale flats as there is a price difference between new BTO and resale flats.

"BTO prices are generally lower, with some cheaper by about 30 per cent. Also, the surplus BTO flats can always be relaunched as Sales of Balance flat with a shorter completion period, and these will always have a stronger demand," Mr Ismail said.

He added that resale flats offer greater flexibility and options in terms of location and less waiting time for couples to move into their own homes without having to wait for years for the completion of their BTO flats.

Agreeing, Mr Lim said demand for BTO flats among first timers will continue to be resilient.

"Even with the new grant amounts for resale flats, BTO flats are still the more economical option. For instance, 4-room Punggol flats in the latest BTO sales launch were priced from S$257,000 onwards. Comparable resale flats were transacted at prices from S$360,000," he said.

"Part of the government's rationale (to give a higher housing grant) was to give first-time home buyers more choices when it comes to buying their first home. Also, as there is limited land to build new flats in mature estates, this increased grant amount will help to make flats in these areas more affordable," Mr Lim added.

Responding to questions by BT, the Housing and Development Board (HDB) said the enhanced CPF Housing Grant will apply to eligible resale flat applications "received on or after 3.30pm, Feb 20, 2017".

"It will not be implemented retrospectively. Those with ongoing transactions can approach HDB for assistance," its spokesman said.