HDB flats

Heaven forbid that we go one week without fighting over something in Singapore. The latest clash of arms is the “flats for singles” issue. Depending on which camp you’re in, this is either (1) a step toward remaking the Garden of Eden, or (2) turning the country into some sort of Stalinist, anti-family regime. We take a peek at both views, and ponder the effects on you:

Flats for singles: Suddenly, the void deck became THE place on Friday nights.

What’s the Issue With Flats for Singles?

HDB has started selling flats directly to singles. This is under the Joint Singles Scheme, and the Single Singapore Citizen Scheme. We have an article explaining that here.
While singles are cheering, there’s also rising opposition to the idea. The impact can be felt by three main groups of people:

  • Families Who Ballot / Will Ballot for BTO Flats
  • Property Investors and Landlords
  • Singles Who Can’t Get Married

1. Families Who Ballot / Will Ballot for BTO Flats

Around 30% of two-room flats are earmarked for singles. Because of overwhelming demand (each flat has about 58 singles fighting for it), excess flats from bidding exercises will also be allocated to singles. You can read the coverage on that here.
This bothers some families, who feel they may lose their flats. But how likely is that?
In our opinion, it’s improbable. Because take note: excess flats from bidding exercises are being given to singles. Families still have priority. And the fact that there’s an excess shows there’s more than enough flats to go around, at least in the two-room category.

Clearly, we singles need the space more than families.
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Also, numbers suggest most families aren’t fighting for the same flats as singles. According to Channel NewsAsia:
In comparison, the application rates of families for two-room flats came in much lower – between 0.8 and 1.1 for first-timers, and 1.9 and 3.2 for second-timers – which led to some property analysts to call on the HDB to increase the allocation of such units for singles.” – More Chances for Singles to Buy Flats (CNA, 21 Oct. 2013)
So long as the families keep getting their flats first, singles won’t be snatching homes from them. For more on how to ballot for flats, ask us on Facebook, or see our infographic guide.

2. Property Investors and Landlords

Treat your HDB flat like an asset? In that case, you’re losing a second group of potential buyers. The resale market already took a hit, when Permanent Residents (PRs) were forced to wait three years to buy.
As more flats become available to singles, it can only weigh down the Cash Over Valuation (COV). Property investor Charlie Sng feels that:
There is no impact right now, because there are still a lot of singles who cannot get BTO flats. But as the number of flats for them grows, it will siphon off demand for resale flats. I think in future it will put some drag on COV prices…I suspect, a little bit, that this is part of HDB’s intent.”

Flats near train stationMy property’s near the train station. Perfect to rent, if you don’t want to leave your children any inheritance.
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Charlie adds that the news isn’t favourable to landlords, for obvious reasons. Given the rate of property appreciation, almost every single will jump at a chance to buy instead of rent.

3. Singles Who Can’t Get Married

Single sex marriage isn’t permitted, so flats for singles are a godsend to gay couples. They’ll still be down $15,000 (the grant for getting married). But hey, at least they can get a home without buying private property.
Also, we have people who won’t settle down for personal reasons. The new singles schemes at least encourages them to stay on in Singapore.
Image Credits:
Phillipe Put, aenertia, HenryLeongHimWoh
Source: http://www.moneysmart.sg/housing-property/hdb-flats-for-singles-how-they-will-affect-you/