Staggered downpayments for flat owners who ‘right-size’

Existing flat owners who “right-size” to a new two- or three-room flat in a non-mature town or estate can now choose to pay a lower downpayment upfront, the Housing and Development Board (HDB) said on Wednesday (Sep 24).

This new staggered downpayment arrangement takes effect from the latest Build-to-Order (BTO) exercise, which began on Wednesday.

Flat owners who are not taking up a loan or who choose to take up a HDB loan will need to pay a 5 per cent downpayment upfront, down from the current 10 per cent. For those who are taking up a loan with financial institutions, a 10 per cent downpayment will have to be paid up front, down from the existing 20 per cent.

They will only need to pay the other half of the downpayment together with the balance purchase price of the new flat when they collect the keys for the new flat, HDB said.

According to HDB, the new staggered downpayment arrangement aims to assist flat owners who wish to “right-size” to a new flat but have their funds tied up in the existing flat.


National Development Minister Khaw Boon Wan wrote in a blogpost he was glad about the change.

“At Meet-the-People sessions, I sometimes meet elderly residents who intend to right-size to a smaller flat but face some cash-flow difficulties in the process,” he wrote.

“The sale proceeds for their existing (larger) flat will be enough to pay for the new (smaller) flat, but they need to sell the flat first to raise the funds for the new purchase. For example, they have to make a downpayment for their new flat, which is at least 10 per cent of the purchase price.”

In 2013, 47 elderly people cancelled their new flat bookings because they were unable to raise the downpayment, Mr Khaw noted.


A total of 4,630 new flats, spread across six projects in the non-mature towns of Bukit Batok, Hougang and Jurong West, and the mature town of Kallang Whampoa, were launched in the September 2014 BTO exercise.

Eligible first-timer singles have the option of applying for a two-room flat in Buangkok Square, West Terra @ Bukit Batok, Yung Ho Spring I or Yung Ho Spring II. For large families, Three Generation flats are available at Buangkok Edgeview, Buangkok Square, St George’s Towers, West Terra @ Bukit Batok, Yung Ho Spring I or Yung Ho Spring II, HDB added.

Half of the studio apartments at St George’s Towers in Kallang Whampoa will be set aside for seniors living in the same town or within 2km of their current flat or property, or those applying for a studio apartment to live near or with their parents or married child.

Applications start on Wednesday and will close on Sep 30.

Another 4,290 flats in Sembawang, Sengkang, Tampines and Yishun will be launched in the next BTO exercise in November. Another 3,000 flats will be offered in a concurrent Sale of Balance Flats exercise, HDB added.

Source : Channel NewsAsia – 24 Sep 2014

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