How many of you guys are already thinking about moving out of your house at the age of 20? However, due to the fact that we have yet to have a stable income and the guidelines for buying a property in Singapore is restricting us from buying one soon.
I feel that in our 20s, we should start reading up on buying a house as the earlier we know, the more time we have to plan towards our goal of owning our own house. With that being said, all these are just my findings and I hope this article will help you to understand better about planning towards having your first house.
HDB Flats in Singapore
HDB flats are by far the most affordable houses for Singaporeans to aim for, the majority of us should understand the prices, schemes, and guidelines towards buying an HDB flat.
*Prices for HDB BTOs listed above are based on August 2020’s HDB Launch with grants or otherwise stated.
*Prices for Resale HDB, Executive Condominiums, and Private Condominiums are based on 2019’s price list
From this diagram, you can roughly see and compare the prices across different types of property that you are interested in buying.
BTO Flats
With BTO flats being the ones that are most affordable, I feel that young people should be targeting them as they are the cheapest and the houses are new. Bear in mind that all these prices for the houses are before grants so the prices can be even lower as long as you fulfill the conditions for the grants.
The location also plays a part in houses. As you can see, those places in “Non-Mature” areas will have a lower price as compared to those in the “Mature” areas. This might be due to the fact that those flats in “Mature” areas are more developed and accessible as compared to the ones in “Non-Mature” areas. But again, I feel that Singapore’s transportation system is good enough for you and it is something that you want to consider.
What are the grants available for BTO Flats?
Enhanced Housing Grant (EHG)
If you and your partner are both first-timers then you may be able to get this grant. The condition is that the household monthly income must not exceed $9,000. The lower your monthly household income, the more you will get from the grant, the amount is up to $80,000.
If one of the people between you and your partner is not a first-timer, then the conditions will be slightly different. Firstly, your average household income per person has to be lower than $4,500 12 months prior to your flat application. You must not own any other property such as private condominiums. The amount is up to $40,000.
Additional CPF Housing Grant (AHG)
For this grant, it requires you to apply for a 2-room Flexi or larger flat. Your income ceiling must not exceed $5,000 and you and all other co-applicants/essential occupiers must all be first-timers. You or your spouse must have worked continuously for 12 months prior to the flat application and still be working at the time you submitted the application.
You and your other flat applicants must not own any properties such as private residential, house, building, or land. Then the grant may give you up to $40,000 depending on your household income.
Special CPF Housing Grant (SHG)
The flat that you applied for must be 2-room Flexi, 3-room, or 4-room in a “Non-Mature” estate. Your income ceiling cannot exceed $8,500 and you and all other co-applicants/essential occupiers must all be first-timers. You or your spouse must have worked continuously for 12 months prior to the flat application and still be working at the time you submitted the application.
You and your other flat applicants must not own any properties such as private residential, house, building, or land. Then the grant may give you up to $40,000 depending on your household income.
Step-Up CPF Housing Grant
If both of you are second-timers then there may be more complications as more requirements are needed. Firstly, your current flat must be either a rental flat or a first subsidized two-room flat that is in the non-mature areas. Other than that, your income ceiling must not exceed $7,000 and you must have continuously worked for 12 months prior to the flat application. The grant amount is only up to $15,000 as you are a second-timer.
Resale Flats
As you can see, the prices for Resale Flats are higher than BTO flats. This may be due to the fact that older flats tend to have better amenities in the “Mature” areas.
By buying resale flats, you may be able to minimize the renovation costs as the previous owner may have done a good job in the renovation and have been taking good care of the house. This would be a good reason for you to purchase a resale flat as you can just take the house with the interior design left by the previous owner.
In some instances, some houses may be badly maintained and you may even end up paying more for renovation as compared to renovating a BTO flat. So you have to factor in the costs to renovate before buying a resale flat.
The Proximity Housing Grant (PHG)
This grant is meant to help more families to buy a resale flat to live near each other for mutual care and support. This applies to both single and married/engaged couples who are buying a resale flat to stay nearer to their parents/child.
If you are moving with your family to live near your parents/child then you may get $30,000 and $20,000 if it’s within 4km. If you are single, then it’s $15,000 and $10,000 within 4km.
To apply for this, you must be a Singapore Citizen and your family nucleus must have at least another Singapore Permanent Resident or a Singapore Citizen.
You must be at least 21 years old if you are moving as a family. If you are single, you have to be at least 35 years old.
The household status must also meet the requirement to not have received PHG earlier on.
So What Should You Do?
My suggestion is that you should always do some calculations to determine if your income is able to support the property that you are getting. Yes you may argue that you want to live in a nice house but that may cost you to be in debt forever and have zero liquidity.
However, do take note of these grants and see how they can be of help for you to get your desired house.
