Strong demand from singles for 2-room flats expected to continue

It has been about a year since a new housing policy allowed singles to buy two-room flats directly from the HDB. Since then, more than 5,200 two-room flats in non-mature estates have been put up for sale, and 2,765 units have been sold under the scheme, with about 560 successful applicants collecting their keys so far.

This exceeds the 1,550 units set aside for singles. These include applications under the Single Singapore Citizen Scheme, Joint Singles Scheme and Non-Citizen Spouse Scheme. Prior to this, singles were only allowed to buy flats from the resale market.

Under the current singles scheme, 30 per cent of two-room flats are set aside for eligible singles who are Singapore citizens, first-time applicants, aged 35 and above, and earn up to S$5,000 monthly. On top of that, any remaining supply from that set aside for families will also be allocated to singles.

The strong demand from singles is expected to continue. Propnex CEO Mohamed Ismail said for recent BTO flats, a two-bedroom unit in Yishun was priced between S$76,000 to over S$80,000, while recent resale transacted prices of a two-bedroom unit in neighbouring Marsiling range from S$230,000 to S$250,000.

“Therefore, a person who is able to buy a two-bedroom flat is getting a discount of more than 50 per cent compared to the resale price,” he said. “There are many singles who do earn much more, and prefer a bigger space. So more or less about 20 per cent of the singles who have no alternative but to buy resale flats in the past would be considering taking up the BTO flats.”

In the latest BTO exercise in July, there were 18.7 applications for each two-room unit set aside for singles. The HDB has said it will offer 5,000 two-room flats this year (2014).

While it may be too early to review the singles scheme, Member of Parliament Gan Thiam Poh, a member of the Government Parliamentary Committee for National Development said: ”I think HDB should concentrate on building more two-room flats to cater to the demand. Also, looking at the requests by singles – they do hope that they can get two-room flats in mature estates. I think their suggestion can also be considered because we also want singles to stay near their parents.”

Housing grants to the tune of S$24.8 million have been disbursed to successful applicants as of July 31 this year. Together with the Additional CPF Housing Grant and Special Housing Grant, they can get up to S$30,000 in grants, depending on their income.

Ms Jowel Foo, 36, is among the ones who have benefited from the grants. She was among the first to apply for a flat under the singles scheme, and successfully booked one of 218 balance units released during the first sales exercise in July.

She moved into her new two-room Build-To-Order flat in Yishun about three months ago, paying S$133,000 for the 47 sq m unit after receiving S$10,000 in grants.

“It was my Mum who encouraged me,” said Ms Foo, a manager with her family’s food business. “We think that having an asset of my own in Singapore would be very useful for me in the future.”

Source : Channel NewsAsia – 22 Aug 2014

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