BUY AND SELL A SINGAPORE PROPERTY FROM THE COMFORT OF YOUR HOUSE

The Housing and Development Board (HDB) of Singapore has reported a record annual deficit of approximately S$6.78 billion (US$5.1 billion) for the financial year 2023 (FY2023). This marks a significant rise from the S$5.38 billion deficit reported in FY2022.   The increase in the deficit underscores the financial challenges faced by HDB in balancing its mission of providing affordable public housing with escalating construction costs and an expanded flat supply.   Home Ownership Segment Drives Deficit   The bulk of the deficit—about S$6.23 billion—was attributed to HDB’s Home Ownership segment, which covers the development and sale of flats under Build-to-Order (BTO) schemes and the disbursement of housing grants to eligible households.   The deficit stems from three main areas:   1. Provision for foreseeable deficit: A net increase of about S$3.74 billion was recorded for flats currently under development. HDB makes upfront provisions for expected deficits for BTO projects, given the subsidized pricing of public housing. This provision rose significantly in FY2023 due to a ramp-up in BTO flat supply, with about 22,700 flats commencing development, a sharp increase from 15,100 flats in FY2022.   2. Gross deficit on completed sales: HDB reported a gross deficit of S$1.37 billion for flats where keys were issued to buyers, compared to S$1.2 billion in FY2022. While fewer units were sold in FY2023 (16,844 units compared to 18,478 in FY2022), higher construction costs drove this increase.   3. Higher housing grants: HDB disbursed S$999 million in CPF housing grants in FY2023, up 46% from S$686 million in FY2022. This spike followed a February 2023 revision to the CPF Housing Grant, increasing the amount by up to S$30,000 to improve resale flat affordability for first-time buyers.   Rising Costs and Expanded Initiatives   The record deficit is partly attributed to rising construction costs, fueled by global geopolitical conflicts and supply chain disruptions. These factors have impacted material costs and project timelines.   Despite these challenges, HDB remains committed to its long-term plans to meet housing demand. Since 2021, it has launched over 82,000 flats and is on track to offer 100,000 flats by 2025.   Investments in Upgrading and Rental Housing   Beyond home ownership, HDB invested significantly in rejuvenating existing estates and enhancing housing options for lower-income families:   - Upgrading programmes: HDB spent S$396 million on schemes like the Neighbourhood Renewal Programme, Home Improvement Programme, and Lift Upgrading Programme.   - Rental housing: HDB increased its spending to S$160 million in FY2023, up from S$141 million in FY2022, for upgrading and managing rental flats for lower-income households.   HDB also allocated S$446 million to residential ancillary functions, including the management of car parks and planning-related activities.   Commitment to Affordability   HDB reiterated its dedication to keeping public housing affordable and accessible. Despite rising costs, 80% of first-time homebuyers were able to service their housing loans with CPF, requiring little or no cash payments.   HDB CEO Tan Meng Dui emphasized that "enabling Singaporeans to own their homes remains HDB’s key priority." He noted that the substantial deficit under the Home Ownership segment reflects HDB’s commitment to affordability, inclusivity, and accessibility for Singaporeans, even in a challenging economic climate.   The record deficit highlights the financial trade-offs involved in sustaining Singapore’s public housing model, but it also reaffirms HDB’s enduring commitment to providing affordable housing for its citizens.

The October 2023 Build-to-Order (BTO) sales exercise saw a remarkable surge in applications, with over 35,600 submissions for 8,573 flats, marking the highest demand since August 2022. The exercise introduced a new classification system for flats, attracting strong interest across its 15 projects and signaling a significant shift in Singapore's public housing landscape.   A New Era for BTO Classifications   This sales exercise was the first to adopt the new Standard, Plus, and Prime classification system, replacing the traditional mature and non-mature estate labels. The reclassification, based on proximity to city centers, transport connectivity, and amenities, aims to offer greater clarity while addressing concerns over affordability and fairness.   Prime and Plus flats, offering better locations and additional subsidies, come with stricter resale restrictions, including a 10-year minimum occupation period and subsidy clawbacks of 6% to 9%. These measures are intended to curb the "lottery effect" associated with owning flats in prime areas.   High Demand for Well-Located Projects   The two Standard projects in Pasir Ris—Costa Riviera I and II—garnered the highest interest, with first-time application rates of 6.7 for five-room and 3Gen flats. Located near Pasir Ris MRT station and featuring relatively short waiting times of three years, these flats stood out among buyers.   Similarly, the West BrickVille @ Bukit Batok project, near the future Tengah Park MRT station, drew strong interest, particularly for its four-room and five-room flats, with first-time application rates of 3.0. Its short waiting time of just two years further boosted its appeal.   In contrast, the Taman Jurong Skyline project in Jurong West struggled to attract applicants despite its low launch prices. Propertyforsale Managing Director, JT Chia, attributed the undersubscription to its less favorable location, next to the busy Ayer Rajah Expressway (AYE) which is a source of noise and air pollution. "It is a double whammy when the nearest Lakeside MRT station is more than 25-minutes walk away," Mr Chia said. Popularity of Prime and Plus Flats   Prime and Plus projects in areas such as Ang Mo Kio, Bedok, Geylang, and Kallang/Whampoa were largely oversubscribed, reflecting strong buyer interest despite stricter resale conditions.   Central Trio @ AMK emerged as the most sought-after project in this category, with an overall application rate of 7.9 times. The 422 units in this Plus project attracted 3,345 applicants. There were 1,763 applications for its 267 four-room units, translating to an application rate of 4.1 among first-time families.   Property analysts noted that buyers prioritized affordability and location over the resale flexibility of these flats. We anticipated strong demand for this project, given the relative rarity of new flats in Ang Mo Kio. The last BTO project in this area, Central Weave @ AMK, was launched in August 2022 and saw an application rate of 14.1 times. Buyers Shrug Off Subsidy Clawback The subsidy clawbacks of 6% to 9% did not deter buyers from choosing the Plus and Prime BTO flats. Because they are expected to price in the clawback subsidy when they sell the flats after MOP. For example, a 4-room BTO Plus flat at Central Trio @ AMK cost about $500,000. The owner could stand to profit about $250,000 if it was sold for $800,000 in the near future after the 6% subsidy clawback.  Singles Drive Record Application Rates   The October exercise also marked a milestone for singles, who were allowed to apply for two-room flexi flats in any location for the first time. In the past, singles could only apply for such flats in non-mature estates. This policy change spurred significant demand, with first-time singles accounting for about 20% of applications.   In Bukit Batok, more than 36 first-time singles competed for each of the 130 two-room flexi units. Similar trends were observed in Ang Mo Kio, Kallang/Whampoa, and Pasir Ris, where application rates for singles ranged from 26.3 to 29.5.   It may take a few years to meet this pent-up demand among singles. Implications for Singapore’s Housing Landscape   The October BTO sales exercise underscores the importance of location and connectivity in driving demand. Projects near MRT stations or offering shorter waiting times were particularly popular, emphasizing the premium placed on convenience in a well-connected city like Singapore.   The strong response to Plus and Prime flats, despite their tighter restrictions, suggests that buyers are willing to trade flexibility for strategic locations and affordability. With the relaxation of rules for singles and the introduction of new classifications, the housing market appears poised for further evolution to meet diverse needs.   As demand for public housing continues to grow, these trends may guide future policies to ensure affordability, accessibility, and sustainability in Singapore’s public housing system.  

Home buyers in Singapore are set to benefit from the upcoming October Build-to-Order (BTO) sales exercise, which will launch next week with the largest number of projects to date. This exercise will mark the debut of a new classification system for public housing flats, aimed at offering more variety in housing types and ensuring affordability across different income groups. The Housing and Development Board (HDB) announced the availability of 8,573 flats across 15 projects in nine towns under the Standard, Plus and Prime framework, designed to cater to diverse housing preferences and needs. New Framework: Standard, Plus, and Prime Flats In a major shift, flats will now be categorized as Standard, Plus, or Prime based on their location, connectivity, and available amenities. This replaces the previous distinction between mature and non-mature estates. - Standard flats: Represent the baseline classification, generally found in areas with good but fewer premium attributes. - Plus flats: Found in "choicer locations" with better connectivity and unique features, offering a middle ground between Standard and Prime. - Prime flats: Located in areas with exceptional locational advantages, including proximity to the city center and amenities. HDB announced that seven Plus projects and one Prime project will be available in the upcoming exercise. The Plus projects will span towns like Kallang/Whampoa, Ang Mo Kio, Bedok, and Geylang, offering a total of 3,273 units. Notable developments include Kallang View, positioned between Kallang and Geylang Bahru MRT stations, and two waterfront projects—Bayshore Vista and Bayshore Palms —providing a sea view for upper floors.  The sole Prime project, Crawford Heights, will be located at the junction of North Bridge Road and Crawford Street in Kallang/Whampoa, offering 312 flats in a central area within a five-minute walk of Lavender MRT station. Standard Flats Still Dominate While the Plus and Prime flats present attractive options for buyers looking for premium locations, Standard flats will make up the bulk of this exercise, with 4,988 units across seven projects in towns like Bukit Batok, Jurong West, Pasir Ris, Sengkang, and Woodlands. These flats range from two-room flexi to larger 3Gen flats, offering a variety of housing options to meet different family sizes and needs. New Classification to Promote Fairness and Affordability The revamped classification aims to promote a good social mix in all towns and ensure that housing remains affordable to all income groups. In line with this, HDB will provide additional subsidies to buyers of Plus and Prime flats, ensuring they remain accessible to a broader range of Singaporeans. However, to prevent speculative gains, or what is often called the "lottery effect," these flats will come with stricter resale conditions, including a 10-year minimum occupation period (instead of the usual five years) and a subsidy clawback upon resale. Changes to Allocation Quotas and Schemes The new classification will also lead to adjustments in flat allocation quotas and ballot chances for first-timer applicants. Flats that were previously categorized as non-mature estate flats will now align with the Standard classification, while parameters previously applied to Prime Location Public Housing (PLH) flats will now apply to Prime flats under the new system. One significant change in this BTO exercise is that singles will, for the first time, be allowed to apply for two-room flexi flats in all locations across Singapore. More than 1,900 two-room flexi flats will be available in 10 of the 15 projects, offering greater opportunities for singles to own homes. Shorter Waiting Times for Select Flats In addition to the variety of housing types, buyers can look forward to shorter waiting times for certain projects. HDB will offer 2,085 flats with reduced waiting times across three projects in Bukit Batok and Sengkang, including West BrickVille in Bukit Batok, where flats will be completed within two years—one of the shortest wait times for a BTO project. Conclusion This upcoming BTO exercise, with its largest-ever number of projects and the new classification system, signals a significant step toward creating more inclusive and diverse public housing options in Singapore. The mix of Standard, Plus, and Prime flats provides potential homeowners with a broader range of choices, ensuring that housing remains accessible, equitable, and reflective of the different needs and aspirations of Singaporeans. Frequently Asked Questions (FAQs) Question: What happens if there is a divorce within the 10-year MOP? Answer: Neither husband nor wife is allowed to take ownership of the residential property, the flat will have to be surrendered back to HDB at a price that will likely be based on the original BTO purchase price less acquisition costs. Question: I am a single, what type of HDB flat can I buy? Answer: First-time single applicants are now eligible to: (a) purchase new two-room flexi flats in all locations under the Standard, Plus, and Prime categories; (b) purchase Standard or Plus flats of any size (excluding 3Gen flats) on the resale market; and (c) purchase two-room flexi Prime flats on the resale market. Question: When does the Minimum Occupation Period start counting? Answer: The 10-years Minimum Occupation Period (MOP) for your Plus or Prime HDB flat is calculated from the date you collect your keys. It does not include any periods when the flat is not occupied, such as when the entire flat is rented out or if there has been a breach of the flat lease. Question: What is the income ceiling for resale buyers of the Plus and Prime flats? Answer: The income ceiling is S$14,000 for the resale of Plus and Prime flats whereas the income cap for singles is S$7,000 if it is a Prime flat. Question: Can I rent out my whole flat after MOP? Answer: No, you are not allowed to rent out your entire flat if it is classfied under Plus or Prime flats. This type of flats are meant for genuine owner occupation and not investment. However, you can rent out individual bedroom as a room rental.

The Housing and Development Board (HDB) Lease Buyback Scheme (LBS) is a unique initiative by the Singaporean government aimed at helping senior citizens monetize their homes to supplement their retirement income. Introduced in 2009, this scheme provides a way for elderly Singaporeans to enjoy financial security in their golden years while continuing to live in their homes. Let's delve into the key aspects of this program, its benefits, eligibility criteria, and how it works.   1. What is the HDB Lease Buyback Scheme? The HDB Lease Buyback Scheme allows elderly homeowners living in HDB flats to sell part of their flat’s remaining lease back to the government, while retaining a 15- to 35-year lease to continue living in the same flat. The proceeds from this sale are used to top up their Central Provident Fund (CPF) Retirement Accounts, and in turn, these funds are used to purchase CPF LIFE annuities, which provide a steady stream of income for the rest of their lives. The scheme is particularly designed for elderly homeowners who wish to age in place, ensuring that they don’t have to move out of their familiar environment but still benefit from additional retirement funds. Most of the elderly folks are reluctant to move out of the neighbourhood where their decades-long friends reside, said JT Chia, Managing Director of Propertyforsale.   2. Eligibility Criteria Not every HDB flat owner qualifies for the Lease Buyback Scheme. The eligibility requirements are as follows: Age: At least one owner of the flat must be aged 65 or older. Flat Type: Initially, the scheme was available only for owners of 3-room or smaller flats. However, as of 2015, the scheme was expanded to include owners of 4- and 5-room flats, as well as larger flats like executive apartments. Flat Ownership: The flat must be owned under the Home Ownership Scheme (excluding those with more than one property). Remaining Lease: The flat must have a remaining lease of at least 20 years after selling the part to the government. Income Ceiling: The combined household gross income must not exceed $14,000 per month. Minimum Lease Period: Homeowners must retain a lease of at least 15 years (this can go up to 35 years depending on their age).   3. How Does the Scheme Work? The process of the HDB Lease Buyback Scheme is straightforward, designed to be hassle-free for senior citizens. Here’s a step-by-step breakdown: Step 1: Application – Interested flat owners submit their applications to HDB for review.   Step 2: Lease Retention – Homeowners can choose to retain a 15- to 35-year lease, based on their age and their retirement plans. For instance, those aged 65-69 need to retain a 30-year lease, while those aged 80 and above only need to retain a 15-year lease. Step 3: Lease Sale – The remaining lease is sold back to the government. The amount received from this sale is then used to top up the CPF Retirement Account (RA).  Step 4: CPF LIFE Annuity – The proceeds from the lease buyback are credited to the homeowner’s CPF RA. After the top-up, homeowners must use the funds to purchase a CPF LIFE annuity, which ensures a lifelong monthly payout for their retirement. Any remaining cash (after CPF LIFE top-up) is given to the homeowner as a lump sum.   4. Benefits of the HDB Lease Buyback Scheme The Lease Buyback Scheme provides several key benefits to elderly homeowners: 1. Unlocking Home Equity Without Relocation One of the major advantages of the LBS is that it allows homeowners to monetize their flat without selling and relocating. This is ideal for seniors who are emotionally attached to their homes and wish to continue living in familiar surroundings. 2. Steady Retirement Income The proceeds from the sale of the lease are used to top up the CPF RA, which is converted into a CPF LIFE annuity. This guarantees a steady monthly income for the rest of the homeowner’s life, ensuring financial security in retirement. 3. Flexibility of Lease Retention Seniors have the flexibility to choose the number of years they want to retain their lease based on their age and circumstances. This allows them to continue living in their flat for many years without worrying about running out of housing options. 4. Lump Sum Cash Payout After fulfilling the CPF top-up requirement, any remaining proceeds from the lease sale can be taken as a lump sum cash payout. This provides homeowners with immediate access to cash for medical expenses, daily living costs, or other financial needs. 5. Enhanced Retirement Savings Through the CPF top-up and CPF LIFE annuity, seniors enhance their retirement savings, reducing their dependence on other financial sources.   5. Considerations and Potential Drawbacks While the Lease Buyback Scheme offers a great deal of flexibility and financial support for retirees, it is not without its considerations: 1. Reduction in Inheritance By selling a part of the lease, the flat’s future value is reduced. This may impact the inheritance potential for beneficiaries, as the remaining lease on the flat will be shorter when passed on to their children. 2. Uncertainty Regarding Lifespan Seniors may find it difficult to accurately predict how long they will live. Retaining too short of a lease could lead to complications if they outlive the lease period, potentially leaving them in need of rehousing.    6. Conclusion The HDB Lease Buyback Scheme is a thoughtful initiative that caters to the financial needs of aging Singaporeans. It provides a balanced solution by allowing elderly homeowners to unlock their housing wealth while ensuring they can continue to live in their homes for the rest of their lives. With its expanded eligibility criteria, the scheme is now more inclusive, benefiting a larger portion of the elderly population. As with any retirement planning tool, it’s important for homeowners to weigh the pros and cons of the Lease Buyback Scheme carefully. For those looking to increase their retirement savings without leaving their home, this scheme offers a viable and beneficial option.

In a strategic move to moderate Singapore’s public housing resale market, the government has announced new measures to tighten the maximum loan amount that home buyers can obtain from the Housing and Development Board (HDB). Starting from Tuesday, August 20, 2024, the loan-to-value (LTV) limit for HDB loans will be reduced from 80% to 75%, effectively lowering the maximum loan amount available to buyers. This change was announced on Monday in a joint media release by the Ministry of National Development (MND) and HDB. The reduction aligns HDB loans with those offered by financial institutions, which also have an LTV limit of 75%. A Series of Cooling Measures This adjustment marks the fourth set of property cooling measures since December 2021, when the LTV for HDB loans was initially reduced from 90% to 85%. The LTV was further cut to 80% in September 2022, and now it has been tightened once again in response to continued price pressures in the resale market. The government’s ongoing intervention reflects its commitment to maintaining housing affordability amidst strong demand for resale flats. Although HDB resale prices grew by 4.9% in 2023—down from 10.4% in 2022—the first half of 2024 still saw prices rise by over 4%, driven by robust demand and a tight supply of flats reaching their minimum occupation period. Enhanced CPF Housing Grant for First-Time Buyers In tandem with the new LTV restrictions, the government has also announced an increase in the Enhanced CPF Housing Grant, aimed at supporting first-time home buyers, particularly lower-income households. Prime Minister Lawrence Wong revealed the enhancements during his National Day Rally speech on Sunday, highlighting the government’s focus on helping families secure affordable housing. Eligible first-time families can now receive up to S$120,000 under the Enhanced CPF Housing Grant, an increase of S$40,000 from the previous maximum of S$80,000. For eligible first-time singles, the maximum grant will increase by up to S$20,000, bringing it to S$60,000. The grant amounts are tiered based on household income, with the highest increases allocated to lower-income families. There are no restrictions on the type or location of flats eligible for the grant, ensuring broad access to this enhanced support. First-timer families Housing Grants GRANT CURRENT REVISED CPF Housing Grant 2- to 4-room flat S$80,000 (last increased in Feb 2023) No change   5-room or larger flat S$50,000 (last increased in Feb 2023) No change Enhanced CPF Housing Grant (EHG) Up to S$80,000 Up to S$120,000 Proximity Housing Grant (PHG) Up to S$30,000 No change Total grants for resale flats Up to S$190,000 Up to S$230,000 Total grants for new flats (EHG) Up to S$80,000 Up to S$120,000 First-timer singles Housing grants GRANT CURRENT REVISED CPF Housing Grant 2- to 4-room flat S$40,000 (last increased in Feb 2023) No change   5-room or larger flat S$25,000 (last increased in Feb 2023) No change Enhanced CPF Housing Grant (EHG) Up to S$40,000 Up to S$60,000 Proximity Housing Grant (PHG) Up to S$15,000 No change Total grants for resale flats Up to S$95,000 Up to S$115,000 Total grants for new flats (EHG) Up to S$40,000 Up to S$60,000 Impact and Implementation Since the introduction of the Enhanced CPF Housing Grant in September 2019, approximately 72,300 first-time households have benefited, with total disbursements exceeding S$2 billion. In the first half of 2024 alone, around 7,000 first-time households received S$204 million in grants. Of those who have benefited from the grant so far, 40% purchased resale flats, while the remaining 60% bought new flats through various HDB sales modes, such as Build-to-Order (BTO), Sale of Balance Flats, and open booking. The revised grant amounts will apply to first-time households who apply for a new flat from the October 2024 BTO exercise onwards, submit a resale flat application on or after August 20, 2024, or apply for an HDB Flat Eligibility (HFE) letter on or after the same date. Ensuring Affordability and Accessibility Despite the tighter LTV limits, the authorities emphasized that first-time home buyers, especially those from lower-income households, will be less impacted due to the significant housing grants available. Eight in 10 first-time families who collected the keys to their resale flats in 2023 used 25% or less of their monthly household income to service their HDB housing loan, often without needing to make any cash outlay. The government remains vigilant in monitoring the property market and has reiterated its commitment to keeping public housing affordable and accessible. As MND and HDB stated, “We will continue to monitor the property market closely and adjust policies as necessary to foster a stable and sustainable property market.” These new measures reflect a careful balance between cooling the resale market and supporting first-time buyers, ensuring that public housing remains within reach for Singaporeans.