STAGGERED DOWNPAYMENT FOR NEW HDB FLATS STARTING FROM SEPTEMBER BTO EXERCISE

BY JANICE HENG, Straits Times

SINGAPORE – Existing Housing Board flat owners who buy a new two- or three-room flat in a non-mature estate can now choose to pay only half the required downpayment upfront, and the rest later. This staggered downpayment takes effect from the September Build-to-Order exercise, which began on Wednesday.

For those who are not taking a bank loan, or who are taking an HDB loan, they need to pay only 5 per cent in downpayment when they sign the Agreement for Lease, instead of the current 10 per cent. For those taking loans from financial institutions, they need to pay only 10 per cent upfront, instead of the current 20 per cent.

The other half of the downpayment need only be paid when they collect the keys for the new flat, along with the balance purchase price of the flat.

The move is to help flat owners who wish to “right-size” to a new flat but have funds tied up in their existing flat, said the HDB in a statement.

In a blog post, National Development Minister Khaw Boon Wan noted that at his Meet-the-People sessions, he sometimes meets elderly residents who want to move to a smaller flat but face cash-flow difficulties.

“The sale proceeds for their existing (larger) flat will be enough to pay for the new (smaller) flat, but they need to sell the flat first to raise the funds for the new purchase,” he said.

In 2013, 47 elderly people cancelled their new flat bookings because they were unable to raise the downpayment, he noted. “Today’s announcement by HDB will help address this issue.”

On Wednesday, 4,630 new flats were launched for sale, across five projects in the three non-mature towns of Bukit Batok, Hougang and Jurong West, as well as one project in the mature town of Kallang/Whampoa.

Besides two- to five-roomers, there are also studio apartments on offer in Kallang/Whampoa and large Three Generation flats for multi-generation families in Hougang. Applications close on Tuesday, September 30.

The next BTO launch in November will have about 4,290 flats in the non-mature estates of Sembawang, Sengkang and Yishun, as well as the mature estate of Tampines. Another 3,000 flats will be offered in the Sales of Balance Flats exercise then.

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