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Saturday, December 19, 2009

HDB resale flat buyer eligibility

Buying a home is not only the biggest financial commitment one will ever make. In Singapore, if you are going to purchase a HDB resale flat, you should also ensure that you have met the eligibility conditions before committing to the resale transaction.

At the moment, you have to qualify under one of the following schemes so that you can buy a resale flat from the open market:
  • Public Scheme
  • FiancĂ©/FiancĂ©e Scheme
  • Single Singapore Citizen Scheme
  • Joint Singles Scheme
  • Non-Citizen Spouse Scheme
  • Non-Citizen Family Scheme
  • Orphans Scheme
  • Citizen/Singapore Permanent Resident (SPR) Siblings Scheme
Basically the eligibility conditions are with regards to citizenship, age and family nucleus.

If you are eligible to buy, the resale flat you are going to buy must also satisfy the Ethnic Integration Policy (EIP), which sets maximum proportions for ethnic groups in each block. The EIP is aimed to promote racial integration and harmony and to prevent the formation of racial enclaves, by ensuring a balanced ethnic mix among the various ethnic communities living in public housing estates.

It is good to refer to the TERMS AND CONDITIONS OF SALE/PURCHASE
OF AN HDB RESALE FLAT
before proceeding to buy a flat in the open market.

Saturday, December 5, 2009

HDB - the biggest landlord & developer of Singapore

Residential property in Singapore can be broadly classified into land properties, private and public housing. The vast majority (80%) of Singapore residents live in public housing estates while the rest reside in private estates. The HDB (Housing & Development Board) is the organization that plans and develops affordable and comfortable residential estates

The HDB is the statutory board of the Ministry of National Development responsible for public housing in Singapore. It's headquarters were previously located at Bukit Merah. The new HDB Hub is now located at 480 Lorong 6 Toa Payoh since 10 June 2002. The HDB's comprehensive housing programmes have involved the provision of not only the residential units but also the supporting facilities in the housing estates such as shops, childcare centers, carparks and industrial workshops.

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The HDB is generally credited with clearing up the squatters and slums of the 1960s and resettling residents into low-cost government-built housing. About 80-90% of Singapore's population are currently living in HDB flats. Costing between S$110,000 to S$800,000, these units are the most common form of accommodation for locals in Singapore. Thus, in Singapore's context, HDB flatas or the public housing is not considered a sign of poverty or a lower standard of living; as compared to public housing in other developed countries. For example, an HDB 4-room flat depending on age, environment and surrounding amenities can have a sale value of between S$300,000 to above S$400,000. Adding to the variety of public housing is the design, build and sell scheme (DBSS) introduced in 2005. Under DBSS, designated sites are sold to private developers, who are then responsible for designing, building and selling the flats.

An intermediate category of housing to bridge the gap between HDB flats and private condominiums was introduced in 1995. Called executive condominiums, these units offer the standard of private condominium living but at lower prices even though they are built and sold by private developers. The reselling of such units is subject to certain restrictions, which are lifted only after a minimum occupation period of ten years.

Shortly after independence, Singapore faced a serious problem of housing shortages. In response, the government passed the Housing and Development Act of 1960 which replaced the existing Singapore Improvement Trust with the Housing and Development Board. The very first priority during formation was to build as many low-cost housing units as possible. Through the years, the emphasis of its housing programmes has shifted from quantity of housing to quality of life. Beyond the flat itself, there is now also more attention given to the overall quality of the housing estate in terms of the amenities provided, aesthetic appeal and visual identity.

In 1968, citizens were allowed to use their pension fund (Central Provident Fund) to purchase and own the homes they were renting to give them a stake of the country and as an incentive to work hard. In 1980, a quota was introduced to ensure that no particular racial group concentrated together to prevent sectarianism. There must be a certain ratio of ethnicity within the HDB blocks, and any move-in or move-out must adhere to this policy.

In the 1990s, the HDB concentrated on the upgrading of existing older flats, installing new facilities such as lifts that stop on every floor. The first programme, called the main upgrading programme, was launched in 1990. Under this programme, improvement works are carried out within the flat and at the block and precinct levels. In 1995, HDB launched the selective en-bloc redevelopment scheme, which involves the demolition of entire blocks for redevelopment. Smaller-scale programmes have also been developed since 1990 to bring the benefits of upgrading to more residents. These include the home improvement programme launched in 2007 that targets common maintenance problems within the flat such as spalling concrete and ceiling leaks.

Ownership in public housing is limited to a 99-year lease. Size is usually denoted by the terms such as four-room, five-room or similar, and is based on the number of bedrooms in addition to the living room but newer five-room apartments come with only three bedrooms and a dining room. The largest HDB flats (in terms of floor area) ever built are two-storey Executive Masionettes built in the 1990s which can have floor area ranging from 160 - 190 m².

Friday, December 4, 2009

Introducing Singapore Real Estate Property

Singapore is one of Asia’s most advanced and cosmopolitan cities. It is an island state with a limited amount of undeveloped land. Because land is scarce, it is a precious resource and property is constantly in demand.

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Majority of the population live in high-rise HDB (Housing & Development Board flats (public housing) and condominiums. The rest of the people here own and live in private apartments/condominiums or live in a landed property.

Investing in real estate is very common among wealthier Singaporeans. More than 90% of households own their homes and are equipped with modern amenities.

Residential properties in Singapore can be divided into three main categories: Private apartments, landed properties and HDB apartments.

Private apartments are classified either as apartments or condominiums by the government. The distinction is somewhat artificial, but typically apartments are smaller developments and condominiums generally have more facilities and are larger. Most condominiums come with swimming pool, tennis court, gym, squash court, children playground and a BBQ area. They also typically have their own enclosed car park and security guards looking after the security at the entrances and the whole area around the condominiums. Tenure of private apartments is commonly freehold, 99-year leasehold or 999-year leasehold. A freehold title enables the owner to hold the property in perpetuity, whilst a leasehold title confers possession upon the purchaser for the duration of the lease (for example, 99 or 999 years). On expiry of the lease, the title and interest in the property revert to the State.

Interest rates in Singapore are currently relatively low which is helping to attract more buyers to the property market. Home financing can be quite affordable and if an investor decides they want a mortgage to buy their investment property in Singapore they should have this agreed in principal before making any offer to buy otherwise the sale could fall through and the potential buyer could lose up to a 10% deposit.

On deciding to purchase a property the first step is to get an Option to Purchase. This is done by making a payment of one percent of the purchase price. This will effectively take the property off the market and allow the investor’s solicitor to have time to check out whether all is in order with the property and whether the investor will require permission to buy it.

Option to Purchase is usually prepared by the seller's (vendor) solicitor or property agent is valid for a 14 day period after which time a buyer either forfeits his 1% and the property goes back on the market or the buyer pays a further 9% of the purchase price to make up a 10% deposit. At this stage the property buying process moves forward and a preliminary contract is signed by the vendor and buyer.

Any further surveys, searches and permission seeking will take place before the final contract is signed and the property is exchanged. There is usually a 1% fee payable by the buyer to the estate agent in Singapore.

Besides this, stamp fee will be payable to Inland Revenue Authority of Singapore within 14 days upon exercising the Option to Purchase or signing the Sales and Purchase Agreement when you buy from a property developer. For properties above S$300,000, stamp fee payable will be 3% of the purchase price minus S$5,400.

Lawyer’s fees and any charges attributed to acquiring permission to buy property in Singapore or securing a mortgage are extra.