Forum: Let singles buy older resale flats from 30

Two trends have been observed in the housing market recently. First, more younger singles are renting to live independently. Second, Pioneer and Merdeka Generation households looking to monetise the value of older flats face a narrower pool of buyers, as many buyers tend to prefer newer properties.

One policy option that could address both trends is to lower the minimum age for singles buying older resale flats to 30.

Renting a three-room flat in a mature estate can cost around $3,000 a month. A three-room flat built in the 1970s in the same area may transact at around $450,000. If a single buyer takes an HDB loan over 25 years at 75 per cent loan-to-value, the monthly instalment would be around $1,500 (before conservancy charges and other ownership costs).

Evidently, the monthly outlay for home ownership would be materially lower than renting, while also allowing the buyer to build home equity.

The suggested change has two potential benefits.

First, it gives singles in their late 20s and early 30s a pathway to home ownership at a more affordable monthly cost than renting. Under current rules, singles cannot buy Build-To-Order flats or resale flats until age 35.

Second, it could broaden the buyer pool for ageing flats and help older owners unlock value from their older flats and right-size to a smaller home.

There are many flats built in the 1970s in mature towns such as Ang Mo Kio, Clementi and Toa Payoh, which offer strong connectivity and established amenities. Lowering the minimum age for singles to buy these older flats could benefit both younger buyers and older owners, on a willing buyer, willing seller basis.

Christina Ng Sor Hua