Higher grant, wider qualifying distance for homeowners living near parents

SINGAPORE — Those looking to live near their parents or children will now be able to buy a resale flat within 4km of each other, rather than just 2km, under the Proximity Housing Grant scheme.

This will allow applicants to choose from a wider pool of public housing units near their loved ones, including resale flats in nearby estates, Finance Minister Heng Swee Keat said on Monday (Feb 19) in his Budget speech.

Singaporean families buying a resale flat from the Housing and Development Board (HDB) to live with their parents or children will now receive a bigger grant of S$30,000, which is S$10,000 more than before.

Those buying a resale flat near their parents or children will continue to receive a S$20,000 grant.

For singles aged 35 or older who buy a resale flat to live with their parents, they will now receive a Proximity Housing Grant of S$15,000, up from S$10,000 previously.

Singles buying a resale flat near their parents will get a S$10,000 grant.

First-time applicants may now receive up to S$120,000 in housing grants — together with the Central Provident Fund (CPF) Housing Grant and the Additional CPF Housing Grant — when buying a resale flat to live with their parents, a 50 per cent increase from three years ago.

The revised proximity condition of 4km will also apply to the Married Child Priority Scheme and Senior Priority Scheme for new public housing units, with effect from the HDB’s Build-To-Order (BTO) and Sale of Balance Flats exercise to be held in May.

Earlier this month, the HDB announced that some 11,000 households have bought resale apartments near their parents or married children with the help of the Proximity Housing Grant since it was introduced in 2015.

Another 1,000 families will receive the grant once their resale transactions are completed.

RESALE FLATS NOT CHEAP

First-time buyers approached by TODAY found that the latest enhancements are not “very appealing”, given the high prices that resale flats already command.

Ms Alyssa Boon, 25, who works in a bank, would consider getting a condominium unit before applying for a resale flat. Over the past three-and-a-half years, she has applied for a BTO flat eight times with her boyfriend and they have not succeeded in getting one.

Condominium prices are relatively lower now compared to the past, she said, while prices of resale HDB flats have gone up.

However, she believes that “most people will still fall back on resale flats if they can’t afford a condominium unit and can’t get a BTO flat”.

“Most (of our) parents live in matured estates and there usually isn’t many BTO blocks in those areas, so if newlyweds want to live near their parents, having a higher grants for resale flats will definitely be good,” Ms Boon said.

Account executive Sheena Wong, 25, who applied for a flat with her boyfriend during this month’s BTO exercise, said that the grants would not help much because both of them do not earn enough to consider getting a resale flat.

They are looking for a home in the Ubi area even though the couple’s parents live in Pasir Ris and Sengkang. Ms Wong said that the revised proximity condition would be tempting if they have exhausted their BTO options.

Ms Tay Xiang Yi, 26, a sales operations analyst, also finds that resale flats are less appealing than, say, an executive condominium, a class of public housing developed and managed by private property developers.

She has submitted an application for a BTO flat in the Sengkang area near her parents’ home. “Whoever has their parents in mind would already want to live near them regardless of the incentive,” she said.

Marketing manager Hairol Salim, 33, said that the grant extension to singles would help him “a bit” financially, as he intends to buy a flat near his parents when he moves out to live with his partner.

HDB’S RESALE VOLUME EXPECTED TO RISE

While some of those looking to buy a home are put off by resale prices now, property analysts foresee that resale transactions will still go up in time.

Mr Nicholas Mak, group executive director of real estate investment firm ZACD, noted that about 12,000 households have benefited from the Proximity Housing Grant, making up about a quarter of the 50,000 HDB resale transactions since it was launched in August 2015.

“Now that the Government is going to increase the amount and expand the definition of the proximity from 2km to 4km, more households are going to apply for it. The number of applicants could increase by one-third to 50 per cent,” he predicted.

This would increase the demand for HDB resale flats and speed up the recovery of resale prices which could happen by the second half of this year.

“Singapore is small and 4km would be practically almost the size of a typical HDB town. For Bishan, if the parents’ flat is in the middle of the town, the proximity would be almost the radius of the whole town,” Mr Mak said.

Mr Desmond Sim, head of research for Singapore and South-east Asia at real estate services firm CBRE, commented that the Budget this year is “pro-family” and the revised criteria of the grant is a “good sweetener” to help families live closer together.

“For smaller towns like Sengkang, depending on where you live, (the new distance requirement) might extend even to Punggol. Old towns like Toa Payoh or Ang Mo Kio and Hougang would probably have people living in the radius within the town itself,” he said.

Mr Lim Yong Hock, key executive officer of PropNex Realty, said that the enhanced grants might possibly increase HDB’s resale volume for this year to almost 24,000 units, compared to about 22,000 units last year.

His view is that the higher grant would ease the strong demand for BTO flats by singles when resale flats become more attractive to them.

“The grant would also be especially beneficial for those who have parents living in matured estates. Prices are usually higher in those areas and the grant would help to ease their costs,” he added. ADDITIONAL REPORTING BY ANGELA TENG