HDB starts to sell 3/4-rm at shorter 50-year lease – no wonder become more affordable?

“Over 700 families in rental flats bought homes in 2022: HDB” (ST, Jan 24)

“Madam Lee, 53, moved into a two-room Housing Board flexi flat in Punggol in January, after 12 years staying in a rental flat with her two sons. She bought the unit at a shorter lease of 50 years – paying about $122,000, including a resale levy – under the Fresh Start Housing Scheme.

The scheme made the purchase more affordable for the assistant infant care teacher, who also received a housing grant of $35,000.”

Comment:

Does the above mean that her 2-room flexi 50-year lease’s original cost (before the housing grant + the resale levy) is about $157,000 ($122,000 + $35,000)?

I understand that such 2-room flexi flats cannot be sold or rented out

“Over the past 10 years, more than 7,800 rental households have bought homes, while another 2,300 households have booked units and are waiting for them to be completed.Of the more than 700 households, seven in 10 bought a flat from the HDB, with the remainder going for resale units. About two-thirds received grants, such as the Enhanced CPF Housing Grant of up to $80,000.”

Comment:

“There are currently around 51,100 households living in public rental flats.”https://www.straitstimes.com/……/budget-debate……

Does the above mean that about 1.4% of the public rental flats, were able to buy a HDB flat, in the year (700 divided by 51,100)?

How many were able to get the maximum housing grant of $80,000?

Can we have a breakdown of the percentage receiving different grant amounts?

“A majority bought a three- or four-room flat in a non-mature estate, and use a quarter or less of their monthly income to service their mortgage, HDB said.”

Comment:

As I understand that one has to apply for a Housing Loan Eligibility (HLE) letter and “affordability” test at the time of application, & again at the time of delivery of the flat – anyone whose monthly mortgage payment is more than 30% of their gross income, wouldn’t be allowed to buy?

And of course, those who can’t afford wonldn’t buy in the fist place – so, with this kind of “statistical” logic – it may always be affordable?

“Beginning with the February Build-To-Order sales exercise, rental households under the Fresh Start Housing Scheme can also buy three-room flats on a shorter lease, on top of the two-room flexi units currently offered.The scheme was launched in 2016 to help families with at least one child below the age of 18 and which had previously bought a subsidised flat. To promote affordability, both the two- and three-room flexi flats will be offered with leases of 45 to 65 years in five-year increments, as long as the lease can cover the youngest applicant up to age 95, HDB said.

Flats sold under the scheme have a 20-year minimum occupation period (MOP) to ensure a stable home for the families and children.”

Comment:

Since 2-room flexi flats cannot be sold or rented out – does it mean that the 3-room flexi lease flats can be sold or rented out after the longer 20-year MOP, unlike the 2-room flexi that cannot be sold or rented out?

“The Fresh Start Housing Grant was also increased from $35,000 to $50,000 from May 2022, with eligible families receiving $35,000 upfront in their Central Provident Fund (CPF) Ordinary Account when they collect their keys. The remaining $15,000 will be disbursed into the account in equal tranches over the next five years.

As at December 2022, 95 families have been emplaced on the enhanced scheme. Of these, 44 have collected keys to their flats, 48 are waiting to collect their keys and three are waiting to book a flat”

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About the Author

Leong
Leong Sze Hian has served as the president of 4 professional bodies, honorary consul of 2 countries, an alumnus of Harvard University, authored 4 books, quoted over 1500 times in the media , has been a radio talkshow host, a newspaper daily columnist, Wharton Fellow, SEACeM Fellow, columnist for theonlinecitizen and Malaysiakini, executive producer of Ilo Ilo (40 international awards), Hotel Mumbai (associate producer), invited to speak more than 200 times in about 40 countries, CIFA advisory board member, founding advisor to the Financial Planning Associations of 2 countries. He has 3 Masters, 2 Bachelors degrees and 13 professional  qualifications.