More first-time home buyers opting for resale flats

The Pinnacle@Duxton in the Telok Ayer area.
The Pinnacle@Duxton in the Telok Ayer area.PHOTO: ST FILE

One in five new buyers of Housing Board homes chose a resale flat over a Build-To-Order (BTO) flat last year - more than double the proportion recorded five years ago, according to latest HDB figures.

This is despite first-time home buyers getting top priority for new flats, with up to 95 per cent of BTO units reserved for them.

Analysts attribute the increase to the bigger pool of flats in desirable locations and the slide in prices in the last four years.

Said International Property Advisor chief executive Ku Swee Yong, citing Pinnacle@Duxton in Tanjong Pagar and flats in Holland Drive: "Young families who want homes in better locations now have good-quality stock to choose from."

HDB figures given to The Straits Times yesterday show 3,441 Singaporean families bought a resale flat with a housing grant last year. This works out to 19 per cent of all flat purchases made by first-time buyers using government grants or subsidies. The remaining 14,273 bought subsidised BTO flats.

In contrast, 1,980 families - or 9 per cent - turned to the resale market in 2012. The remaining 21,025 bought BTO flats. Since then, the proportion of resale flats bought has been rising.

The bigger stock of desirable flats is because flats in, for instance, Pinnacle@Duxton hit the minimum five-year occupation period last year, making them eligible for sale.

The price slide of the last four years, coupled with government grants for first-time buyers, has made resale flats more affordable.

For example, couples who buy resale flats near their parents will get a $20,000 Proximity Housing Grant, introduced in 2015.

Said SLP International executive director Nicholas Mak: "First- timers today are in a better state than their counterparts about seven years ago. Resale prices have softened, and there are more grants, so they feel more comfortable about buying a resale home."

The HDB said it expects more first-time buyers to consider resale flats, given the recently enhanced Central Provident Fund Housing Grant. They can get up to $50,000, against the previous cap of $30,000. But it expects resale flat prices to remain stable. "First- timers also have the option of buying a new flat directly from HDB, and resale flat sellers will need to be realistic in pricing their flats."

Job recruiter Evonne Ouyang, 27, bought a four-room Serangoon flat for $480,000 last year, after failing to get a unit in three BTO or sale of balance flats exercises.

"With a resale flat, there is no waiting and you also know what you'll end up with," she said, adding that she received a CPF Housing Grant of $30,000 grant.

But some flats would still be out of reach for young home buyers, like those in Clementi Avenue 3, where a third unit crossed the $1 million mark in the last 10 months.

The record-setting $1.04 million deal, closed last month, was for a 118 sq m flat on the 39th floor. It is in Clementi Towers, the first HDB integrated project with both a mall and bus interchange.

PropNex agent Gaynor Lim, who represented the sellers, said the price paid by the buyers was above the valuation of $1.018 million. The couple, who are in their 30s, were drawn by the flat's size, view and proximity to amenities.

A version of this article appeared in the print edition of The Straits Times on May 03, 2017, with the headline 'More first-time home buyers opting for resale flats'. Print Edition | Subscribe