Sharing Singapore Property News, Guides and Updates

Wednesday, 20 May 2020

HDB’s Proximity Housing Grant (PHG): All You Need to Know - by 99.co

All hail the HDB Proximity Housing Grant (PHG)—the government’s way of encouraging Singaporeans to stay close to their families and maintain a robust intergenerational support system!

Here’s the basics about the PHG. The PHG is a CPF housing grant of up to $30,000, and it’s for buying resale flats only.

Two types of buyers can benefit: those who want to live WITH their parents/children in a HDB resale flat, and those who want to buy a HDB resale flat NEAR their parents/children.

A brief backgrounder on the Proximity Housing Grant (PHG)

The PHG was launched in 2015 and has since helped over 30,000 households. In 2018, the criteria for PHG was revised to let more Singaporeans benefit from this grant. It is now more inclusive and generous:

More $: The maximum grant amount for those living with their parents/children in the same HDB flat is now $30,000, up from $20,000. Those living near their parents/children will receive $20,000 in grants—this is unchanged.
Singles welcome: The PHG is now available to singles buying an HDB resale flat. Previously, only married/engaged couples or family members buying a flat together may apply. Single applicants will receive half the grant amount that a couple would: $10,000 if they live near their parents/children, and $15,000 if living with.
Wider radius: The PHG is now available when buying a resale flat within a 4km radius of the family’s HDB flat or private property address. Previously, the maximum distance was a 2km radius or within the same HDB town—criteria that many buyers found limiting*

*Note that a HDB flat in same town but further than 4km from the other flat from won’t qualify for the PHG. (Read on to find out how to check the distance between two flats!)

Here’s our handy infographic that sums up HDB’s Proxmity Housing Grant (PHG).

proximity housing grant phg hdb eligibility criteria

proximity housing grant phg hdb grant amount

What are the conditions to be eligible for the Proximity Housing Grant (PHG)?

You are a Singapore Citizen aged 21-years or above.
For a family/couple nucleus, the other applicant must be a Singapore Permanent Resident or a Singapore Citizen.
For singles, you must be 35-years-old and above, applying under the Single Singapore Citizen Scheme, Joint Singles Scheme, and Public Scheme.
For those with a non-Singaporean spouse, as long as you are 21-years or above and applying under the Non-Citizen Spouse Scheme, you are eligible, too.
You must be buying a HDB resale flat. And the flat must be a 2-room flat or larger and have a remaining lease of at least 20 years. PHG isn’t for BTO flats!
The house your parents/children are living in can be an HDB flat or private residential property (e.g. condo, landed home). For private properties, your parents/children must be living in it (i.e. owner-occupiers). The property must also be owned by your parents/children (which can include your children’s in-laws or immediate family member such as your sibling).
There is no income ceiling on the PHG, hurrah!
Both first-time homebuyers and second-time homebuyers are eligible.
You will only be able to receive the PHG once in your lifetime. If you have received the PHG previously, you may not apply.

How do I check if a flat qualifies for Proximity Housing Grant (PHG)?

Okay, so what is 4km radius exactly? HDB has set up a Distance Enquiry e-service that lets you check if the HDB resale flat you have in mind is within 4km of your children/parent’s home. Simply key in the postal codes to both properties. Here’s us keying in the postal code of two HDB flats in the east.

There’s also a search function in HDB’s Map Services. While looking at the housing information for a particular HDB address, you can select ‘Distance Enquiry for Proximity Housing Grant’ in the right navigation menu to check which blocks of flats are included within a 4km radius.

HDB Map Services is great, but it doesn’t show you which units are on sale.

BUT the HDB Map Search doesn’t show you which units are currently for sale. So, if you’re looking to buy a HDB resale flat within 4km of your parent/children, the most straightforward way is to head to property potral 99.co, type in that home’s address or postal code and hit ‘Search’.

Once you do that, you’ll be taken to a results screen with a map view. If you’re accessing 99.co using desktop, point your cursor to the red nub on the right edge of the radius and drag it outwards to it’s maximum 4000m (i.e. 4km). This is our very own Radius Search Filter for the Proximity Housing Grant!

If you’re using the app version of 99.co, you can hit the funnel icon on the top right of your results screen, where you can then set the search radius to 4000m (i.e. 4km) and access a whole lot of other filters to narrow down your search for your dream home.

proximity housing grant hdb phg 4km radius filter 99.co app

Do I have to return or pay back the Proximity Housing Grant (PHG)?

A misconception about CPF housing grants, including the PHG, is that they are free. Well, unless you plan to stay in the same house forever–which is unlikely as families grow/shrink overtime–you’ll need to refund the the grants you’ve taken when selling your flat.

This refund comprises the principal amount of grants you’ve received as well as its accrued interest of 2.5% on the grant amount. Accrued interest is the amount of interest your grant could have earned if it had stayed in your OA untouched.

The money will be deposited into your CPF Ordinary Account (CPF-OA)*. And it comes from the proceeds from selling your current flat.

However, the good news is that the amount returned into your CPF-OA may be used to buy your next home.

*Note that if you’ve also taken the AHG, SHG or EHG in addition to the PHG, only a maximum of $60,000 from these grants will go back into your CPF-OA when you sell your flat. The excess will be equally distributed in your CPF Special Account and Medisave accounts.

Am I really living near my parents?

In the Pasir Ris and Tampines examples above, the two flats are a short bus ride and walk apart.

However, not all flats that are within 4km of each other are well-connected. If travelling time between the two homes is an important consideration, narrow down your search for a HDB resale flat using the Search by Travel Time feature on 99.co. Choose a travel time (which is via public transport) that you are comfortable with, say, 20 minutes.

In the search results, you’ll see homes that are within a 20 minute bus or MRT ride away from your indicated address. The Search by Travel Time function can help you find the most ideal resale flats within the 4km PHG radius.

What other grants can I be eligible for?

Other grants available for buyers of HDB resale flats include:

For Singles

Singles Grant: Those aged 35 and above may receive $25,000 for 2- to 4-room flats and $20,000 for 5-room flats.
Enhanced CPF Housing Grant for Singles: Those aged 35 and above may receive grants from $2,500 to $40,000 based on their average monthly income.

For First-time Applicants (Couples/Families)

Enhanced CPF Housing Grant for Couple/Families: Applicants may receive grants from $5,000 to $80,000 based on their average household income.
Family Grant: Married first-time applicants may receive grants from $30,000 to $50,000 based on size of flat and citizenship.

For Second-time Applicants

Step-Up CPF Housing Grant: Second-timer applicants may receive a $15,000 grant based on your current and future flat types.

For First-time and Second-time Couples

Half-Housing Grant: Reserved for first-time applicants whose spouse/fiance has previously received a housing subsidy. Applicants may receive $25,000 for 2- to 4-room flats and $20,000 for 5-room or bigger flats.

For Newly-married Singles

Top-up Grant: Reserved for those who had previously received a Single Grant but is now married, as well as those who had previously received a Single Grant under the Non-Citizen Spouse Scheme but whose spouse is now a Singapore Citizen. The amount is dependent on how much you have previously received.

Good luck with your home search!

Will the PHG give you an incentive to buy a HDB resale flat near your parent’s home? Let us know in the comments section below!

If you found this article helpful, 99.co recommends

Looking for a HDB resale flat? Find your dream home on Singapore’s most intelligent property portal 99.co!

1 day ago · 8 min read · by Eliza Hamizah

Source: 99.co (20 May 2020)

Option To Purchase: 5 things you might not know about (but really should) - by 99.co

The Option To Purchase (OTP) is not something we think about often; at least until something goes wrong. Then we’re making sobbing noises, begging for our lost deposit, and fuming about “how the stupid thing can work that way”.

Thing is, both new and seasoned homebuyers should pay more attention to this initial stage of a property transaction, beacuse the OTP isn’t always as straightforward as it seems:

1. The OTP is not standardised for private property transactions

When buying private property, the OTP is not a standardised document. The OTP prepared by the seller’s lawyer, and your own lawyer is supposed to review it and recommend changes to protect you. You shouldn’t assume that the terms in the OTP are “all the same” and sign it without consulting with your lawyer.

For example, the “norm” of a 14-day option period for an OTP is not mandatory, and can be longer. In a recent sale of a $28 million penthouse to Vicky Zhao’s husband, the OTP was originally signed three years prior to purchase although, in reality, sellers’ agents will likely give you the cold shoulder if you suggest anything longer than two months.

Other possible variables in the OTP include:

The possession period of the seller (i.e. when they have to vacate and leave the property to you)
The payment method, including the rest of the downpayment (this should be an escrow account for the buyer’s safety)
The use of the “as is where is” basis for the property transaction (i.e. whether you are accepting the property in its current state, or whether you will accept it only on certain conditions, such as the seller first repairing fire damage)

These issues should all be clarified with your lawyer, who will then send the OTP back with proposed changes.

Note that this doesn’t apply to HDB properties, for which a standard OTP document is used (this is available on the HDB website).

2. Offer to Purchase is sometimes abbreviated as “OTP” as well, but is different and can affect the actual Option to Purchase

letter of intent — The Offer to Purchase is sometimes also called the OTP, but it’s not the same. Take note of its wording nonetheless.

The Offer to Purchase is a letter from the buyer to the seller, signalling serious intent to purchase the property. The Offer to Purchase is not usually considered the binding legal agreement, whereas the Option to Purchase is. Also, note that the Option to Purchase is drafted by the seller’s lawyer, whereas the Offer to Purchase is from the buyer to the seller (it’s often drafted by the buyer’s agent).

The wording in the Offer to Purchase can, however, affect the subsequent Option to Purchase. The most famous example of this was in 2013, when an Offer to Purchase stipulated that the “option period” for a transaction should be “three days”.

Well the buyer got three days all right, and the Chinese New Year break saw the OTP expire before it was exercised. Had the Offer to Purchase included the term “subject to contract”, that wouldn’t have happened.

Given that the Offer to Purchase and OTP come in quick succession, make sure you don’t mistake one for the other. Again, make sure your lawyer sees every piece of paper relevant to the transaction, before you sign and send.

3. The option fee isn’t always 1%, it’s negotiable

It’s entirely possible for an OTP to require a bigger option fee (i.e. deposit) than the usual 1% for a private property transaction.

At times, the buyer may even negotiate the amount of the deposit in exchange for other concessions. For example:

Say you want to purchase the property and you’re 100% certain. However, you need extra time to sell your existing property, as you need the cash proceeds first. However, the seller is unwilling to wait so long; they don’t want to risk taking the property off the market for a long time for you, only to find out you’re backing out later.

“In cases where a significantly longer option or completion period is required, a common request from sellers are an increase in option fee or both option and exercise fees,” said Stuart Chng, Founder of Navis Living Group at OrangeTee.

“The higher fees are to justify the sellers’ opportunity cost or mitigate their risks in case the buyer backs out,” he added.

4. For new launches, a “reservation scheme” means re-issuing or renewing a lapsed OTP

In many showflats, you may hear the term “reservation scheme”. This is to allow buyers to “chope” a unit, even if they don’t have immediate financing to buy it.

The reservation scheme does not mean you can reserve the unit without an OTP. Most of the time, it just means the developer will renew or re-issue the OTP, whenever it lapses (there may be a fee for this, such as $300 each “extension”). Note that repeated extensions can get very expensive, such as if the OTP is valid for two weeks each time, but you keep renewing it over a month or two.

Also be aware that you are still signing an OTP, so your initial deposit, plus the costs you incur for extension or re-issue of the OTP, are non-refundable.

These schemes are okay if you need extra time while working out the sale of your existing home, already have loan approval but want to hunt for a lower interest rate, etc. But don’t put your money down if you’re not even sure you can get a loan, as you’ll still lose the deposit if you don’t exercise the OTP.

It’s definitely not “free to chope”.

5. How you treat the cheques matter as much as your signature

Signing a check — If you cash the buyer’s cheque, you’ve accepted the OTP even if you haven’t actually signed.

If you’re the seller, and you bank in the cheque for the OTP deposit, you’ve already agreed to it. It doesn’t matter whether or not you actually put your signature to the document. This was established in a case in 2008, when the seller instructed the property agent to bank in the cheque but didn’t sign the OTP yet.

As such, don’t bank it in before you’ve scrutinised the OTP with your lawyer, and are fully satisfied with the terms.

Also, for transactions using cheques, note that you cannot cash cheques past the OTP deadline and then claim the buyer failed to exercise the OTP. If you lose the cheque, damaged it for some reason, etc., then you’re still bound by the OTP, even if the seller has to re-issue a new cheque past the deadline.

The sensitive issue is when the cheque somehow gets to you late. For example, if the buyer sends a cheque to exercise the OTP, but due to courier issues it arrives a day late. This will then be up to your lawyers to resolve.

Buyers, for safety’s sake, don’t wait till the last minute to send the cheques!

Do you have any other questions relating to the Option to Purchase? Let us know in the comments section!

If you found this article useful, 99.co recommends Sales & Purchase Agreement: A guide for new launch condo buyers and Covid-19 and Property: 12 Legal Questions Answered by Lawyers

Looking for a property? Find the home of your dreams today on Singapore’s largest property portal 99.co! You can also access a wide range of tools to calculate your down payments and loan repayments, to make an informed purchase.

2 days ago · 7 min read · by Ryan Ong

Source: 99.co (20 May 2020)

Why are Executive Condos located so far away? - 99.co

It’s not exactly a secret that Executive Condos are off-the-beaten path. Out of 69 ECs launched and built so far, all but one (Bishan Loft) is located within 10km of the CBD.

Don’t believe us? Look at our map below showing where every Executive Condominium is located in Singapore. Blue markers are completed ECs, whereas purple and orange markers denote newly launched and upcoming ECs respectively.

There are a number of reasons as to why ECs are saddled with land plots that are more remote compared to the typical condo. And why you can bet on that to continue long time to come. (It doesn’t make them a bad deal though.)

Why are ECs located in far away (i.e. ulu) areas?

There are three main reasons for this:

You’re paying a lot less for ECs
It’s assumed the demographic is less reliant on public transport
Those ulu land plots make more sense for ECs than BTO units

Reason #1: You’re paying a lot less for ECs

The Executive Condominium (EC) was introduced by HDB in 1997 to cater to Singaporeans, especially young graduates and professionals who can afford more than a HDB flat but find private property to be out of their financial reach.

For ECs to cost less than condos, the land cost component can’t be too high. The government and the Housing & Development Board (HDB), which releases EC sites for tender, recognise this fact.

So land plots designated for ECs are understandably located in areas with low land cost, far away from the city and at times a distance away from town centres (as is the case of Tampines Ave 10) and MRT stations.

Yes, regular private condos are also launched in such areas. Alhough both may be similar at first glance (e.g. they both have condo facilities), the materials used in a private condo is typically higher-end.

Compared to a condo at launch, an EC in a similar location costs about 10 to 20% less. There’s simply no way to sell ECs at such a discount in more prime areas where land cost is higher.

Hougang

Name of Project	Year	Launch Price (avg psf)	Difference
Heron Bay (EC)	2012	$737	20% lower
Boathouse Residences	2012	$917	20% lower

Tampines

Name of Project	Year	Launch Price (avg psf)	Difference
Arc at Tampines (EC)	2011	$728	16% lower
Waterview	2011	$863	16% lower

Sengkang

Name of Project	Year	Launch Price (avg psf)	Difference
Lush Acres (EC)	2013	$792	8% lower
H2O Residences	2013	$865	8% lower

You may click/tap on the links to the condos above to see if current prices for the EC projects are still at a premium versus their next-door condo counterpart.

Note that an EC typically receives a boost in value after five years (when PRs become eligible to buy), and after 10 years (when foreigners become eligible to buy) upon completion.

Typically, the resale price gap between ECs and private condos will decrease when these milestones are hit.

Reason #2: It’s assumed the EC demographic is less reliant on public transport

This is going to sound elitist, but here it is: Singaporeans living in HDB flats more likely to need walking-distance access to daily amenities and ready access to public transport, such as MRT stations, to get to work. They’re less likely to be able to afford a car, or call Grab every single time they want to head out.

Also, unlike a condo, HDB estates don’t really have the means to organise private shuttle services to the nearest MRT. The monthly conservancy fees HDB owners pay is 5-8 times less than an EC or condo maintenance fee.

So, with Singaporeans’ interest in mind, it’s only right that HDB reserves land near existing amenities for HDB flats and locate ECs further away from main amenities (e.g. Tampines Ave 10), or in HDB towns that are not yet mature (e.g. Punggol, Sembawang).

Reason #3: Ulu land plots make more sense for ECs than BTO units

Apart from the two reasons given above, we need to consider how much someone would pay for a BTO flat in a remote or inaccessible area. As we’ve pointed out, the typical HDB dweller is less likely to be able to afford private transport, and HDB estates don’t run free shuttle services to the MRT station.

With that in mind, would first-time, cash-tight BTO applicants part with good money (e.g. $300,000 for a four-room flat) to live in, say, the fringes of Yishun?

The answer is a resounding NO. In the September 2018 BTO sales launch, HDB got a slap in their face when they received fewer applications than flats available for Melody Spring @ Yishun and Yishun Glen. (As we all know BTO projects are typically well-oversubscribed.)

HDB must’ve been kicking themselves back then, because if these plots were instead released to private developers and sold as Executive Condos, HDB would’ve earned a much greater profit AND matched the demographic profile to the location better. Win-win.

But, the secret sauce of ECs is how far away they are.

An overlook of the wetland and the famous deep-orange bridge. — Less mature estates also mean there’s greater room for development and appreciation; if you can bear with it for now.

When Executive Condos first started to launch in Punggol, the place was still considered a place where, to use a colloquial expression, birds don’t even lay eggs. Now it’s a vibrant town with every amenity available with further developments in the pipeline such as the Punggol Digital District, the upcoming Singapore Institute of Technology (SIT) campus, and the Cross Island MRT Line.

Piermont Grand, the only EC launched in 2019, more or less marked the turning point for the area. It was priced at between $890,000 to around $1.7 million, and the first EC to be launched above the $1,000 per square foot (psf) price point. The location, which is at Sumang Walk in Punggol, isn’t considered considered the most central in the town. Residents are a nine-minute walk, or two LRT stops, from Punggol MRT.

Despite that, Piermont Grand has sold more than 60% of units to date, a commendable achievement in a lukewarm market. Other developers are taking that as a cue, launching the ECs Ola and Parc Canberra at prices around $1,100 psf this year.

Location should be a determining factor in any property purchase, but consider some differences when it comes to ECs.

While Executive Condos may not be in a particularly built-up area right away, they’re still highly affordable homes especially considering the upside from privatisation and future development of the area.

This means an EC may not give you the same immediate convenience as, say, an older resale condo that’s already in a mature area; or a high-priced new launch condo in a prime spot. However, the latter tend to already be purchased by developers at a premium, meaning there’s less room for appreciation.

A final consideration to getting an EC are the grants available to eligible buyers and the convenience over stamp duties (i.e. you don’t need to pay the Additional Buyers Stamp Duty (ABSD) when upgrading from an HDB flat to an EC, unlike a condo where upgraders have to pay first and apply for remission later).

So, no matter how far away they may be, Executive Condos will continue to be hot property among those can afford it.

Would you get an EC in a far away location? Let us know in the comments below.

If you found this article helpful, 99.co recommends 8 step guide to buying a new launch condo in Singapore and The FULL list of 2020 New Launch Condos in Singapore (+ Analysis)

3 days ago · 7 min read · by Ryan Ong

Source: 99.co (20 May 2020)

Pages