Saturday, June 20, 2015

More help for buyers of resale flats near parents'

The Ministry of National Development (MND) will look into how it can provide more help to those who wish to buy a resale flat to live near their parents, Minister for National Development Khaw Boon Wan said on Friday.

In an MND blog post, he noted that more Singaporeans now want flats near those of their extended families in mature estates, given the benefits of such arrangements.

"Since 2011, we have enhanced various priority schemes and introduced a new flat type to help extended families live together or close by for mutual care and support. They have produced good results," said Mr Khaw.

Data from MND indicates that a quarter (24 per cent) of applicants for Build-to-Order (BTO) flats submitted applications under one of these schemes, and enjoyed higher success rates than those who did not; the proportion is even higher - up to 36 per cent - in mature estates such as Tampines and Bedok.

MND noted that other schemes are also becoming more popular; the proportion of applicants applying under the Multi-Generation Priority Scheme (MGPS) or for 3Gen flats went from 5 per cent in 2013 to about 10 per cent the year after.

"We have tried to meet these needs (for flats close to extended families), by launching more flats in mature estates," said Mr Khaw, citing the BTO project in Tampines North last year, and the upcoming Bidadari launch as examples.

But land is limited for such launches, which is why the government gives an additional S$10,000 under the higher-tier CPF Housing Grant of S$40,000, to help first-timer families buy a resale flat to live together or close to their parents or married children.

An analyst said helping young couples live near their parents is always a good move, but thinks more can be done. For instance, he said, a segment of buyers will still be unable to afford flats in mature estates, even with the grants.

What such couples can do is rent out their flat in the non-mature estate, and then rent a flat near their parents. The government can assist with some rental payments they need, because the rental income they get from their flat is definitely lower than the rents they have to pay for renting a flat in a mature estate.

But we do not want an abuse of such rental subsidies or privileges, so the minimum lease (to qualify for such) subsidies must be between 11/2 and two years, instead of the standard one-year lease. This means the couple will have to be more committed to staying long term near their parents.

Adapted from: The Business Times, 20 June 2015