With the announcement of enhanced resale flat grants comes the question on homebuyers’ minds: Will sellers raise prices?
The Central Provident Fund (CPF) housing grants, which are effective for resale flat applications from Monday, were raised by $10,000 to $20,000 for first-timer families, and $5,000 to $10,000 for first-timer singles, Finance Minister Heng Swee Keat announced in his Budget speech. Upcoming executive condo launches include Hundred Palms Residences EC, Anchorvale Lane EC, while existing ones include Parc Life EC, Signature at Yishun, Brownstone EC, Visionaire EC, Inz Residence EC, The Criterion EC and Northwave EC, The Terrace EC, The Vales EC, , Sol Acres EC and The Bellewoods EC. Hundred Palms Residences details and Hundred Palms EC show flat will be available shortly.
But some prospective buyers, like Ms M.L. Yong, 30, are concerned that sellers could jack up the price if they find out she is a first-timer applicant. For the past two years, she and her fiance have been looking for a Housing Board flat near his parents’ home in central Singapore.
The couple, who have a monthly combined income of $10,000, are tying the knot later this year.
“The grants are very welcome and make resale flats near his parents more affordable now.
“But what is to stop sellers from charging us more?” asked Ms Yong, who works in an architecture firm.
Industry watchers said Ms Yong has little cause for concern, though it is still possible that some sellers may attempt to pocket the gains.
Mr Nicholas Mak, research head of SLP International Property Consultants, said: “Some sellers will certainly try and perhaps raise prices by half the grant amount.
“But it is very unlikely for most sellers to do that.”
He said the resale market is and has always been a buyer’s one.
“Raise the prices? There is a simple solution for the buyers.
“They simply go to the next flat,” he added.
With an expected rise in demand for resale flats, R’ST Research director Ong Kah Seng believes that sellers may soon be able to sell their units in a shorter time, which currently averages around three months.
Mr Ong predicts that the impact on resale prices will be minor, with a possible rise of 0.3 per cent this year.
Meanwhile, resale transactions are expected to increase due to the measures.
PropNex Realty chief executive Ismail Gafoor estimates that the volume of transactions will go up by about 10 per cent.
A total of 20,813 resale flats changed hands last year, and the number is expected to cross 22,000 this year.
Mr Ismail said: “Indeed, with the recent price corrections in the HDB resale market in the past few years, and now with the increased grants, the Government’s decision is timely.
“It opens up more choices for young couples who are considering purchasing HDB resale flats.”
These grant enhancements are meant to help new couples looking for a home, Parliament heard on Monday.
But property experts believe the rationale for implementing them now is also to encourage financial prudence in homebuyers in the current economy.
One clue is the larger grants for smaller flat types, said Mr Mak.
“It shows that the Government wants families to spend within their means,” he noted.
“In a competitive job market today, a smaller flat is easier to maintain, especially when times are bad.”
The group most likely to benefit are young families with pressing housing needs who also want to live near their parents, said ERA Realty key executive Eugene Lim.
The measures may also “encourage some couples to tie the knot earlier and have children soon after marriage”, said OrangeTee’s head of research and consultancy Wong Xian Yang.