'Stay-then-pay' the way to go

Families looking to move into their new home quickly can now do so, with CapitaLand's new stay-then-pay program

Have you found your dream home, but need just a little more time to save up? Or are you an HDB owner who is keen to upgrade, but also concerned that a flat hastily sold may fetch a less-than-desirable price?

For house hunters looking for a little flexibility, property developer CapitaLand recently rolled out its popular stay-then-pay programme at Sky Habitat, a 509-unit condominium near Bishan MRT. 

Launched in June last year at d’Leedon and The Interlace, the stay-then-pay programme allows buyers to make a 10 per cent upfront payment, move into the unit within eight weeks, and cover the remainder of the cost in one year’s time. For foreigners, the upfront payment is 15 per cent.

The scheme helps to cut time and cost issues for purchasers, giving them more time to dispose of their previous home and allowing them to save the money that would otherwise be spent on an interim home.

Take, for example, a Singaporean family living in a five room HDB in Bishan. The family is itching for an upgrade, and their hearts are set on a 1,292 sq ft two-bedroom-plus-study unit at CapitaLand’s Sky Habitat. 

Complete with its own outdoor terrace, the $1.86 million unit is a good fit for the family – but there is a catch. Their current flat has not been fully paid for, which means that under a standard payment scheme, the family would have to pay $1.11 million upfront with a 50 per cent loan-to-value (LTV) ratio. Alternatively, they could borrow up to 80 per cent LTV ratio – but only if they dispose of their current flat first. 

The stay-then-pay programme offers a third, more convenient option. Under this scheme, the total upfront payment would be slashed to just $366,600. The family would be able to move in almost immediately, while still having a full year to ensure their current flat is sold for the highest possible price.

“It’s an ingenious, attention-grabbing way to market completed projects,” Mr Tay Kah Poh, head of residential services at Knight Frank Singapore, said in an article in The Edge, “It gives buyers more flexibility to divest their current home, while saving on loan interest during the ‘stay’ period.” 

Dr Lee Nai Jia, Head (SEA) Research of Edmund Tie & Company, also praised the scheme.

“Buyers will benefit as it helps to improve their cashflow position,” he said.

“However, MAS has indicated that banks will have to take such incentives into consideration before approving loans,” he added.

Still, it is an offer home hunters are finding hard to resist. Since its introduction last year, about 200 units have been sold under the scheme in total, which has been well received, particularly by HDB upgraders.

111 units, including two- to four- bedroom apartments and penthouses are still available at Sky Habitat, at an average price of $1,500 per square foot.