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Thread: Younger HDB buyers likely to be more prudent: Observers

  1. #1
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    Default Younger HDB buyers likely to be more prudent: Observers

    Younger HDB buyers likely to be more prudent: Observers

    Besides encouraging prudence among young buyers, the policy tweaks should also see obvious winners in sellers of ageing flats and buyers, who now have more options to pick from, observers said.


    Published 6 hours ago


    Younger people may not be able to get as much in Central Provident Fund (CPF) monies or Housing Board loans to buy ageing flats, but they still benefit from policy changes announced yesterday, observers said.

    "The younger generation might not be thinking about retirement when they buy a house," said OrangeTee & Tie research head Christine Sun. "The changes will make them consider whether they might outlive their flat and have insufficient funds to retire on later."

    Yesterday, the Government announced that home buyers can use more CPF savings and get bigger HDB loans - as long as the flat's remaining lease covers them till age 95. Before, these depended on the remaining lease of the property.

    Most home buyers will not be affected by the new rules. But younger buyers who buy ageing flats must now be prepared to fork out cash and get smaller HDB loans.

    The changes are likely to nudge younger buyers to go for Build-to-Order (BTO) flats or newer resale flats, said Huttons Asia research head Lee Sze Teck.

    Under the changes, those who buy homes that do not cover them for life cannot withdraw more than $5,000 when they turn 55, unless they have saved up to the Full Retirement Sum (FRS). They can still withdraw 20 per cent of their Retirement Account savings when they hit their payout eligibility age. Previously, they could withdraw any savings in excess of their Basic Retirement Sum, which is half that of the FRS.

    Besides encouraging prudence among young buyers, the policy tweaks should also see obvious winners in sellers of ageing flats and buyers, who now have more options to pick from, observers said.

    ERA Realty key executive officer Eugene Lim said the changes upend the traditional way of buying homes since financing options are not automatically limited once a flat has less than 60 years left on its lease. "A potential buyer no longer has to be fearful of buying older properties," he said.

    How buyers received yesterday's news depended on their age.

    Engineer Ranon Mak, 27, who is looking to buy a resale flat in Tampines to be near his parents, said he is now limited to a smaller pool of flats if he does not want to use cash to buy his future home.

    But procurement analyst Teresa Wang, who is looking to upgrade to a larger flat near to the city next year, rejoiced.

    "I do not mind buying older flats, and it is good that I can do so using all my CPF," said the 42-year-old.

    Sellers of ageing flats are hopeful the changes can spark some offers.

    Housewife Susan Teo, 47, who lives in a four-room Bukit Merah flat with 55 years left on its lease, said: "If I can get more viewings, we can sell our place and buy the house to retire in."

    • Additional reporting by Euodia Chi


    How new rules affect CPF usage
    WITHDRAWING CPF FUNDS AT AGE 55


    When CPF members turn 55 years old, some may wish to withdraw their CPF savings. Previously, they could withdraw any amount above the Basic Retirement Sum (BRS) if they pledged a property with a remaining lease of at least 30 years.

    From today, this remaining lease will be raised to at least 40 years, to ensure that their flat covers them to age 95.

    This change is not expected to affect most CPF members, as all HDB flats and the vast majority of private properties have leases that can last a 55-year-old till age 95.

    BUYING MULTIPLE PROPERTIES USING CPF

    Previously, CPF members had to set aside the BRS before excess Ordinary Account (OA) monies could be used to purchase subsequent properties.

    From today, members who do not have a property that covers them till age 95 will need to set aside the Full Retirement Sum - twice the BRS - before they can use excess OA funds to buy other properties.

    Members who have a property whose remaining lease covers them till age 95 will not be affected.

    USING CPF FUNDS AFTER AGE 55

    For purchases from today, the remaining lease of the property must cover the buyer till he is age 95 in order for him to use Retirement Account savings above the BRS to pay for his property.

    Members approaching age 55 can ask the CPF Board to reserve their OA savings so they may continue servicing their mortgage payments after their 55th birthday. Those facing difficulty servicing their housing loans can approach the HDB or CPF Board for assistance.

    https://www.straitstimes.com/sites/d...db_4831229.pdf

  2. #2
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    Default Re: Younger HDB buyers likely to be more prudent: Observers

    Quote Originally Posted by reporter2 View Post
    Younger HDB buyers likely to be more prudent: Observers

    Besides encouraging prudence among young buyers, the policy tweaks should also see obvious winners in sellers of ageing flats and buyers, who now have more options to pick from, observers said.


    Published 6 hours ago


    Younger people may not be able to get as much in Central Provident Fund (CPF) monies or Housing Board loans to buy ageing flats, but they still benefit from policy changes announced yesterday, observers said.

    "The younger generation might not be thinking about retirement when they buy a house," said OrangeTee & Tie research head Christine Sun. "The changes will make them consider whether they might outlive their flat and have insufficient funds to retire on later."

    Yesterday, the Government announced that home buyers can use more CPF savings and get bigger HDB loans - as long as the flat's remaining lease covers them till age 95. Before, these depended on the remaining lease of the property.

    Most home buyers will not be affected by the new rules. But younger buyers who buy ageing flats must now be prepared to fork out cash and get smaller HDB loans.

    The changes are likely to nudge younger buyers to go for Build-to-Order (BTO) flats or newer resale flats, said Huttons Asia research head Lee Sze Teck.

    Under the changes, those who buy homes that do not cover them for life cannot withdraw more than $5,000 when they turn 55, unless they have saved up to the Full Retirement Sum (FRS). They can still withdraw 20 per cent of their Retirement Account savings when they hit their payout eligibility age. Previously, they could withdraw any savings in excess of their Basic Retirement Sum, which is half that of the FRS.

    Besides encouraging prudence among young buyers, the policy tweaks should also see obvious winners in sellers of ageing flats and buyers, who now have more options to pick from, observers said.

    ERA Realty key executive officer Eugene Lim said the changes upend the traditional way of buying homes since financing options are not automatically limited once a flat has less than 60 years left on its lease. "A potential buyer no longer has to be fearful of buying older properties," he said.

    How buyers received yesterday's news depended on their age.

    Engineer Ranon Mak, 27, who is looking to buy a resale flat in Tampines to be near his parents, said he is now limited to a smaller pool of flats if he does not want to use cash to buy his future home.

    But procurement analyst Teresa Wang, who is looking to upgrade to a larger flat near to the city next year, rejoiced.

    "I do not mind buying older flats, and it is good that I can do so using all my CPF," said the 42-year-old.

    Sellers of ageing flats are hopeful the changes can spark some offers.

    Housewife Susan Teo, 47, who lives in a four-room Bukit Merah flat with 55 years left on its lease, said: "If I can get more viewings, we can sell our place and buy the house to retire in."

    • Additional reporting by Euodia Chi


    How new rules affect CPF usage
    WITHDRAWING CPF FUNDS AT AGE 55


    When CPF members turn 55 years old, some may wish to withdraw their CPF savings. Previously, they could withdraw any amount above the Basic Retirement Sum (BRS) if they pledged a property with a remaining lease of at least 30 years.

    From today, this remaining lease will be raised to at least 40 years, to ensure that their flat covers them to age 95.

    This change is not expected to affect most CPF members, as all HDB flats and the vast majority of private properties have leases that can last a 55-year-old till age 95.

    BUYING MULTIPLE PROPERTIES USING CPF

    Previously, CPF members had to set aside the BRS before excess Ordinary Account (OA) monies could be used to purchase subsequent properties.

    From today, members who do not have a property that covers them till age 95 will need to set aside the Full Retirement Sum - twice the BRS - before they can use excess OA funds to buy other properties.

    Members who have a property whose remaining lease covers them till age 95 will not be affected.

    USING CPF FUNDS AFTER AGE 55

    For purchases from today, the remaining lease of the property must cover the buyer till he is age 95 in order for him to use Retirement Account savings above the BRS to pay for his property.

    Members approaching age 55 can ask the CPF Board to reserve their OA savings so they may continue servicing their mortgage payments after their 55th birthday. Those facing difficulty servicing their housing loans can approach the HDB or CPF Board for assistance.

    https://www.straitstimes.com/sites/d...db_4831229.pdf

    Interesting facts that needs attention

  3. #3
    Join Date
    Jun 2019
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    Thumbs up Re: Younger HDB buyers likely to be more prudent: Observers

    The new age buyers are said to be more careful when it comes to investing on properties in Singapore. Apart from the fact the new age buyers are more frequent to internet and social Medias. Also as per the new policies younger buyers are eligible for a smaller HDB loan than under existing rules. Under the new CPF loan a minimum lease requirement will be applicable for any HDB flats having 20 years left on the lease tenure from the previous tenure of 30 years. This recent announcement from National Development Minister Lawrence Wong has brought relief among young investors.
    if you want to have more knowledge about properties like HDB , CONDOS in Singapore , you can consult to some of the best dealers from https://propertyweb.sg/

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