The ongoing COVID-19 pandemic has led to a delay in the completion of BTO flats.
Currently, about 85% of the ongoing BTO projects are estimated to be delayed by between 6 to 9 months.
As such, many young couples looking for their first home may be thinking of buying a resale flat instead.
In today’s article, we share some important points to look out for when buying your first resale flat.
HDB’s Ethnic Integration Policy (EIP) and Singapore PR (SPR) Quotas
The EIP was introduced to preserve Singapore’s multi-cultural identity and promote racial integration and harmony.
The EIP ensures a balanced ethnic mix in HDB estates, thereby helping to promote racial integration and harmony. The EIP limits are set at block/neighbourhood levels based on the ethnic make-up of Singapore.
The SPR quota ensures that SPR families can better integrate into the local community. (Malaysians are excluded from this quota because of the close cultural and historical similarities with Singaporeans)
So the foremost important thing to do is to check the EIP and SPR in the neighbourhood or block that you are eyeing.
You are considered as having fulfilled the EIP proportion or SPR quota under these circumstances:
You are within the block/ neighbourhood’s limits in terms of your ethnic group and the SPR quota,
You and the seller are of the same ethnic group and household citizenship type.
If your household consists of members of different ethnic groups, you can choose to classify your household ethnicity under the ethnic group of any owner or spouse (co-owner or occupier), according to the race shown on the NRIC of the chosen member.
Once you have selected the ethnicity for your household, it will remain the same if and when you decide to sell your flat later on in the open market.
The EIP and SPR quotas are updated on the first day of every month. As the quotas will affect any resale applications in that month, you might get a different result if you submit your application later after too much time has elapsed.
You can check the EIP and SPR quotas using the HDB self-serve portal.
Affordability
Buying a property in Singapore is costly and for first time buyers, it may be a strain financially. The good news is that there are several grants that you can apply to ease the burden.
First-time buyer of new or resale HDB flats may be eligible for the Enhanced CPF Housing Grant (EHG) of up to $80,000.
For those buying resale flats, you get the EHG and you can also apply for the Family Grant of up to $50,000, and a Proximity Housing Grant of up to $30,000.
This means the total grant amount that resale flat buyers can get is $160,000.
1. Family Grant
The Family Grant is to provide financial assistance to married or engaged couples, or families who are first-timer applicants buying an HDB resale flat.
The amount that they can receive is as follows:
Source
2. Half-Housing Grant
For eligible first-time applicant whose spouse or fiance/fiancee that had previously enjoyed any housing subsidy, can apply for the Half-Housing Grant.
The amount they can receive is $25,000 if buying a 2 to 4 room flat, or $20,000 if they are buying a 5 room or bigger flat.
3. Proximity Housing Grant (PHG)
The Proximity Housing Grant (PHG) was introduced to help families buy a resale flat to live with, or close to each other for mutual care and support.
The following can apply for this grant:
Married/engaged couples or families who are buying an HDB resale flat to live with or near their parents/child.
The amount they can get is as follows:
Source
Remaining Lease
New HDB flats come with a fresh 99-year lease. However, for resale flats, depending on when you buy, the remaining lease would differ.
Therefore, it is important to find out how many years the flat you are eyeing has left.
You can use the HDB Map Services. Simply click on the housing icon, key in the address or postal code of the flat you are eyeing and all the relevant information are there.
You can find out the lease start date, remaining lease, breakdown of flat types, resale prices, rental rates, EIP and SPR quotas, and HDB’s upgrading and renewal programme. There is even a distance enquiry for Proximity Housing Grant tab, which you can use to see if you qualify.
Amenities
Living near amenities is another important factor. Besides ease of travel and convenience, having access to good amenities can add value to your property.
The better the amenities that surround your property, the more valuable your property is and the value can only increase in the future.
Amenities such as MRT stations, shopping malls, kindergartens and day-care centres, primary and secondary schools, hospitals, parks are what you should look out for.
So, depending on your current situation and short term plans, you should look for a place where such amenities are readily available.
Are You Ready?
Buying a property for the first time is a momentous event and can be quite daunting. After all, you are talking about purchasing an item that cost several hundred thousand dollars and being saddled with a huge housing loan. And then there are all the HDB rules and regulations to observe.
For an easy understanding of the HDB resale process, you can check out our previous blog post - Quick Guide to Buying Resale HDB Flat: Requirements, Financing and Fees.
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