Budget 2018 has been released. How did the real estate industry perform last year?
Are there any changes from this year’s budget affecting the real estate market and if so, what do these changes hold?
$4.7 billion collected in stamp duties last year
The property market performed well last year, chipping in $4.7 billion in stamp duties. The original estimation was $2.7 billion. Last year’s better-than-expected performance from the property sector has played a big part in generating 2017’s Budget surplus.
Prices of properties, both private condominiums and resale HDB flats, are now more affordable, creating a demand for properties in both the primary and secondary markets. Sellers and developers have found the consumer sweet spot of $1 million as the palatable total quantum.
More public housing subsidies to encourage caregiving and community living
Singles may welcome the new public housing subsidy. They can now receive a $10,000 Proximity Housing Grant (PHG) if they purchase a resale flat within 4km of their parents. Previously singles were not eligible for this grant and could only receive a grant should they buy a flat to live together with their parents.
The next big change is an enhancement of this existing grant from $10,000 to $15,000. And the pool of available flats available to them will also widen. The distance from their new flat and their parents’ flat is now 4km instead of the previous 2km.
Up to 50,000 flat buyers have utilised the PHG since its inception in August 2015. About 25% of the transactions between August 2017 and December 2016 have made use of the grant, with $211 million disbursed to 11,000 families. 93% of the grant applicants were families with the rest coming from singles.
This new grant may however only benefit singles whose parents live in non-mature estates where resale flat prices are more affordable.
For those who are living in mature estates such as Ang Mo Kio, the $10,000 grant may not be enough to offset the high selling prices of units here.
The authorities are however hopeful that this new move will help singles afford resale flats and ease up the demand on new 2-room Build-to-order flats.