Revamped Proximity Housing Grant to push HDB resale volume to 24,000 units

3-room flats are predicted to be in hot demand.

The enhanced Proximity Housing Grant is poised to drive housing demand over the next 12 months with analysts foreseeing an expected resales volume of 24,000 transacted units in 2018, according to real estate agency Propnex Realty.

This comes as Finance Minister Heng Swee Keat announced the enhancements to the scheme in his budget address to incentivise family members who want to live near each other.

“We expect 3-room resale flats to particularly be in strong demand. Nevertheless, these enhanced grants will also not likely affect the private property segments as resale flats attracts a different profile of buyers – primarily couples and families who are not looking to purchase private properties,” said PropNex KEO Lin Yong Hock.

Hock added that the grant will slash demand in Build To Order (BTO) flats as resale flats become more attractive to prospective homebuyers due to shorter waiting time and closer location to their families.

The finance minister also announced that singles who purchase a resale flat near their parents will be eligible to receive a PHG of $10,000 whilst families buying a resale flat will benefit from a higher PHG of $30,000 – up from $20,000.

Additionally, the government is revising its definition of ‘near’ to within 4 km from the current proximity condition of living within the same town or within 2 km to provide housing applicants with more choices to live with their loved ones.

“The enhanced Proximity Housing Grant (PHG) is a welcomed move that will give singles and families greater incentive to live near their parents. With the revised 4km distance, there will be greater choices of units for singles and families to choose from. The grant would also especially be beneficially for those who have parents living in matured estates as the prices are usually higher in those areas and the grant would help to ease their costs,” Hock added.

For Singapore Business Review's full budget coverage, click here.

Photo from mailer_diablo - Self-taken (Unmodified), CC BY-SA 3.0

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