4 things real estate experts want from the 2023 budget
PropNex’s wishlist aims to help segments of the population to own homes.
Real estate agency, PropNex, listed four measures they wish to be included in the 2023 budget for more Singaporeans to meet their housing aspirations.
The first on PropNex’s wishlist is for the government to align additional buyer’s stamp duty (ABSD) remission treatment for married couples upgrading from HDB flats to private homes with that of those upgrading to new Executive Condominiums (EC) from developers.
Currently, Propnex said married HDB upgraders have to pay ABSD upfront within 14 days of signing the Sales and Purchase Agreement.
“The upfront ABSD payment is the biggest hurdle for many families who wish to upgrade from their HDB flat to a private home. To avoid paying ABSD – at 17% for Singaporeans buying a second residential property - some families opted to sell their HDB flat first before buying a private home,” PropNex said.
“Following the sale of their flat, many of these families rent in the interim, which not only causes inconvenience but could result in them incurring unnecessary expenses to relocate to the temporary accommodation,” the agency added.
This is why some upgraders purchase new ECs from developers instead, given that they do not need to fork out the large ABSD payment upfront.
However, PropNex said many couples may not be eligible to buy ECs as they have exceeded the monthly household income ceiling of $16,000.
“In addition, the stock of new ECs in the market is also limited and 70% of EC units are set aside for first-timer buyers during the initial project launch, with fewer options left for upgraders,” PropNex said.
To help more families achieve their aspirations of living in a private home, the agency said the government can provide “some form of contractual undertaking to ensure that the private home buyers sell their HDB flats within six months from collecting keys to their new home.”
Another thing which PropNex wishes the government to do is to provide more clarification on the 15-month wait-out period, particularly, as to when the rule will be reviewed or updated.
The agency added that such updates will help private homeowners in their real estate planning.
“Many private homeowners – who are not seniors - have shelved their plans on putting their property up for collective sale because they are unable to purchase an HDB resale flat as their replacement home owing to the 15-month wait-out period,” PropNex said.
“This affects the owners’ ability to monetise their asset and could disrupt their financial planning goals – some owners may be looking at selling their private home and moving to a resale flat, keeping part of the sales proceeds to build up their savings,” the agency added.
The real estate expert also called on the government to increase the Outside Central Region (OCR) residential land supply on the Government Land Sales (GLS) confirmed list.
“As the OCR serves a wider pool of demand – from first-time home buyers and HDB upgraders - PropNex hopes that the government will consider injecting more GLS sites to this sub-market,” PropNex said.
Under the 1H23 slate, the government offered only 2,120 units in the OCR, lower than the 2,550 units in H222.
Lastly, PropNex urged the government to shorten the Build-to-Order (BTO) waiting time to three years.
The firm said doing so will help “young couples in planning their marriage and in starting a family,” given that they prefer to secure a flat first before having children.
Currently, the waiting time for many standard BTO projects is more than four years.
“As the borders reopen and workers return to support the construction sector post-pandemic, and with the continued use of productivity measures such as precast technology, perhaps the government can consider building more BTO projects in advance ahead of the sales launch,” PropNex said.