SINGAPORE - More people have tapped the CPF Housing Grant to buy resale flats since it was increased about a year ago, said the Housing Board in an update on Feb 25.
From Feb 14, 2023, to December 2023, more than 11,000 households bought resale HDB flats with the grant, up 31 per cent from the same period in 2022.
HDB said in a statement that $505.2 million in such grants was given out to 10,400 buyers of resale flats, and the remaining 600 buyers are set to receive the grant when their transactions are completed over the next few weeks.
On Feb 14, 2023, Deputy Prime Minister Lawrence Wong announced in Budget 2023 that the CPF Housing Grant would be increased to support Singaporeans who want to buy resale flats but find prices too high.
Previously, buyers of two- to four-room resale flats received $50,000, while buyers of five-room or larger units got $40,000.
First-timer singles received $25,000, while singles who are buyers of five-room units got $20,000.
After the increase, first-time buyers of two- to four-room HDB resale flats now get $80,000, while those who buy five-room or larger resale units get $50,000.
First-timer singles now get $40,000 for four-room and smaller units, and $25,000 for five-room units.
HDB said that with the increased grant, nearly 80 per cent of first-timer families who collected the keys to their resale flats in 2023 used 25 per cent or less of their monthly household income to service their HDB loans.
Given that 23 per cent of total Central Provident Fund (CPF) contributions for employees aged 35 and below will be allocated into their CPF Ordinary Account – which can be used for housing – these buyers will be able to service their HDB loans with little or no cash payments, added HDB.
Among those who received the higher grants was project manager Ho Swee Chin, 41.
She was prepared to fork out over $60,000 for the down payment for her two-room resale flat in Sengkang, but was able to pay it in full using savings from her CPF Ordinary Account and the $40,000 grant for singles.
“Because of the grant, my cash flow is not so tight, and I don’t have to take up a renovation loan,” said Ms Ho, adding that she is expecting to fork out $40,000 for renovations.
Of the 11,000 households that tapped the increased grant, 69 per cent were families and 31 per cent were singles.
Some 81 per cent of them bought four-room or smaller flats, while the other 19 per cent bought five-room or larger units, said HDB.
Besides the CPF Housing Grant, there is also the Enhanced CPF Housing Grant, which gives up to $80,000 to families buying their first new or resale flat, and the Proximity Housing Grant, which gives up to $30,000 for buyers of resale flats who choose to live with or near their parents or children.
In 2023, HDB handed out $1.22 billion in housing grants, up from $1.13 billion in 2022, it told The Straits Times previously.
From 2020 to 2023, more than $4.5 billion across three housing grants were given to buyers of new or resale flats, HDB said earlier in February. In those four years, 41,600 households tapped the CPF Housing Grant.
In its statement, HDB also said that the rate of resale price growth has continued to moderate over the past year, following the ramp-up in housing supply and several rounds of property cooling measures.
Resale prices went up 4.9 per cent in 2023, less than half of the 10.4 per cent surge in 2022. Fewer resale flats also changed hands in 2023, dropping 4.2 per cent, from 27,896 flats in 2022 to 26,735 flats in 2023, said HDB.
The proportion of resale flat buyers who paid cash over valuation (COV) has also halved, falling from nearly 30 per cent in the fourth quarter of 2022, to about 15 per cent in the same period in 2023.
The majority of resale flat buyers did not have to pay any COV, HDB added.
COV is the amount a buyer has to pay in cash when a resale flat is sold above its HDB valuation.
It said: “HDB will continue to keep a close watch on housing market conditions and review our policies to ensure public housing remains affordable and accessible for Singaporeans.”
