Extend new housing grants to resale market, say home buyers

Some home buyers Channel NewsAsia spoke with have suggested that the new housing grants announced at Sunday’s National Day Rally be extended to those buying from the resale market as well.

Home buyers welcomed in particular the extension of the existing Special Housing Grant, which provides up to S$20,000.

The grant will soon include not just two and three room flats, but four-room flats as well. The current income ceiling of S$2,250 will also be raised to include the middle income group.

However, some home buyers also suggested that the grants be extended to those buying from the resale market as well.

Tristan Tey, a home buyer, said: “The flat prices for resale are a bit too high. So even if I want to live some place that’s near my parents, it’s pretty tough for me to get one. I’m not too sure whether the government would consider (extending the grants to) those buying the resale flat, instead of just restricting it to those buying BTOs.”

Analysts said that the extra grants has widened the net of Singaporeans who can receive help, and it is a right step to make housing more affordable.

Many ideas were floated during the Our Singapore Conversation on housing — on how to bring down the prices of BTO flats, while imposing restrictions on home buyers. However, some analysts said the choice to give out more housing grants instead is a good move as it assures existing homeowners that the value of their flats is maintained.

However, the HDB resale market is not likely to be affected as some market watchers said those earning less than S$4,000 a month are not likely to buy resale flats.

Mohamed Ismail, CEO of PropNex, said: “To start with, the number who are looking at resale from this group are very minimal. A person who earns S$1,000, S$2,000 and S$4,000 — even with a grant, they will have challenges of the COV and other things, therefore the market will not be very much affected in the resale market.

“(Definitely,) there will be some people who could afford a resale flat. But now, on the assumption that the BTO flats enjoy greater subsidies, they will also take up the BTO flats.”

There will also be new Step-Up Housing Grants to help those upgrading from a two to a three-room flat. Some analysts said this may cause a gradual increase of two-room flats in the resale market over time.

Nicholas Mak, executive director of research and consultancy at SLP International Property Consultants, said: “There will perhaps be a slight increase in the number of two-room flats entering the resale market.

“But at the same time, there are also a number of people, such as singles or retirees, who are looking to buy two-room flats. So, I think there will be some adjustments in the market equilibrium but over time, there will not be a major shake-up in the market.”

More details on the new grants are expected soon.

Source : Channel NewsAsia – 19 Aug 2013

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