Monday, February 20, 2006
Lower-income workers welcome housing grants for flat purchases
Low income-earners have welcomed the measures announced in the Budget on Friday to help first-timers buy their own flats.
They can receive a housing grant of up to twenty thousand dollars.
Property agents say that the measure will certainly help this group get affordable housing.
41-year-old Arivuazahagan and his family have been living in a one-room rental flat for the past 19 years.
Although he pays slightly more than S$40 to rent the flat every month, he wants to buy his own place.
But the sole breadwinner of the family who earns less than S$1,500 a month as a security guard has been waiting for his elder son to complete his national service before he buys a flat.
He said: "I am only waiting my sons to be stable. When they finish NS, they can work and get some money so my CPF can buy house. If I want to buy house, at least 2 to 3 persons work then it is comfortable."
With the new housing grant that the government has announced, Mr Arivuazahagan will stand to receive up to S$60,000 - the maximum grant of S$20,000 as he's earning below S$1,500 a month - and another S$40,000 if he's buying a resale flat near his parents.
And he is already looking forward to a three-room flat so that his sons can each have a room of their own.
A better option for him, say property agents, is to buy a new two-room flat that the government is planning to build.
Chris Koh, Director, Dennis Wee Properties, said: "First a 2-room flat I foresee HDB will price it at about S$70,000. With a S$20,000 grant added on, means effectively I pay about S$50,000 for that flat so S$50,000 if I were to divide it again, maybe over a 20-year loan and that will result in an instalment of about S$200. It's definitely payable because with a S$1000 salary, assuming that we are talking about the age group of 35-45 with a contribution of 20-30 percent to the CPF account, then I'll have sufficient instalments so that may be a better option for someone with lower income."
Alternatively, Mr Arivuazagahan could also consider a 2-room resale flat that's available in the market to get maximum benefits from the grants.
Under current regulations, first-time buyers of resale flats are eligible for the grant of $30,000 or $40,000 if the resale flat is near his or her parents.
The grants are not eligible for new flats.
There are currently 6,294 two-room flats that are currently owned by Singaporeans, with another 23,057 rented out in the market.
Mr Koh said: "Two-room flats are very popular. In fact not a lot of people want to sell them. The people who own them are of a higher age group. In fact when there's a flat to sell, we get a lot of calls from retirees. Retirees who downgrade, pay the flat fully and not have any loans. You do see people in two-room flats in areas like Bedok and they are very sought after. You don't see them coming up for sale so often but when they are up for sale, we get a flood of calls for that flat. It's quite easy to sell because there's demand for it."
Property agents suggest that the government should look into allowing the new housing grant to be used to pay the monthly instalment of their flats and not just as down payment.
Mohamed Ismail, CEO, Propnex, said: "For the existing grant of $30,000 to $40,000, the current requirement here is that one has to utilise towards all the down payment. Leaving it in the CPF to pay towards the instalment will definitely help the lower income, especially one who's earning below $1,000."
"He does not want to be burdened by the monthly commitment and if this top up can be used towards the monthly instalment, then it will again free him from other commitments or whatever costs of living that one has to take care of."
The new initiative to help low wage earners buy their own flat is expected to benefit some 6,000 households per year.
It is part of the government's aim to help up to 90 percent of Singaporeans to own their homes. - CNA/ch
They can receive a housing grant of up to twenty thousand dollars.
Property agents say that the measure will certainly help this group get affordable housing.
41-year-old Arivuazahagan and his family have been living in a one-room rental flat for the past 19 years.
Although he pays slightly more than S$40 to rent the flat every month, he wants to buy his own place.
But the sole breadwinner of the family who earns less than S$1,500 a month as a security guard has been waiting for his elder son to complete his national service before he buys a flat.
He said: "I am only waiting my sons to be stable. When they finish NS, they can work and get some money so my CPF can buy house. If I want to buy house, at least 2 to 3 persons work then it is comfortable."
With the new housing grant that the government has announced, Mr Arivuazahagan will stand to receive up to S$60,000 - the maximum grant of S$20,000 as he's earning below S$1,500 a month - and another S$40,000 if he's buying a resale flat near his parents.
And he is already looking forward to a three-room flat so that his sons can each have a room of their own.
A better option for him, say property agents, is to buy a new two-room flat that the government is planning to build.
Chris Koh, Director, Dennis Wee Properties, said: "First a 2-room flat I foresee HDB will price it at about S$70,000. With a S$20,000 grant added on, means effectively I pay about S$50,000 for that flat so S$50,000 if I were to divide it again, maybe over a 20-year loan and that will result in an instalment of about S$200. It's definitely payable because with a S$1000 salary, assuming that we are talking about the age group of 35-45 with a contribution of 20-30 percent to the CPF account, then I'll have sufficient instalments so that may be a better option for someone with lower income."
Alternatively, Mr Arivuazagahan could also consider a 2-room resale flat that's available in the market to get maximum benefits from the grants.
Under current regulations, first-time buyers of resale flats are eligible for the grant of $30,000 or $40,000 if the resale flat is near his or her parents.
The grants are not eligible for new flats.
There are currently 6,294 two-room flats that are currently owned by Singaporeans, with another 23,057 rented out in the market.
Mr Koh said: "Two-room flats are very popular. In fact not a lot of people want to sell them. The people who own them are of a higher age group. In fact when there's a flat to sell, we get a lot of calls from retirees. Retirees who downgrade, pay the flat fully and not have any loans. You do see people in two-room flats in areas like Bedok and they are very sought after. You don't see them coming up for sale so often but when they are up for sale, we get a flood of calls for that flat. It's quite easy to sell because there's demand for it."
Property agents suggest that the government should look into allowing the new housing grant to be used to pay the monthly instalment of their flats and not just as down payment.
Mohamed Ismail, CEO, Propnex, said: "For the existing grant of $30,000 to $40,000, the current requirement here is that one has to utilise towards all the down payment. Leaving it in the CPF to pay towards the instalment will definitely help the lower income, especially one who's earning below $1,000."
"He does not want to be burdened by the monthly commitment and if this top up can be used towards the monthly instalment, then it will again free him from other commitments or whatever costs of living that one has to take care of."
The new initiative to help low wage earners buy their own flat is expected to benefit some 6,000 households per year.
It is part of the government's aim to help up to 90 percent of Singaporeans to own their homes. - CNA/ch
// posted by Shajahan @ 11:13 AM 