STAGGERED PAYMENTS AND CANCELLATION RATES
To help ease the cost that young couples have to fork out for their flats, down payments are split into two instalments under a Staggered Downpayment Scheme. The first down payment is either 5 or 10 per cent, depending on the type of loan taken. The second instalment is due at key collection.
Should couples still face difficulties paying the reduced initial down payment, the amount payable will be brought down further to 2.5 per cent of the flat price.
As with all HDB purchases, in the event that a couple under the deferred income assessment scheme can no longer afford the unit and is rendered ineligible to continue with the purchase, the flat application will be cancelled.
If the cancellation was after signing the lease agreement and before key collection, the couple has to forfeit 5 per cent of the purchase price, according to the HDB website.
In response to CNA’s queries, the statutory board said past data shows the cancellation rates for those under the deferred income assessment are similar to those of other young couples not under the scheme.
“Only a small minority of households have cancelled their flat applications due to financial difficulties,” HDB said.
“We encourage flat buyers to plan their finances carefully and buy a flat within their means. HDB has a steady pipeline of flat supply for different budgets and needs, and there is no need to rush to apply for a flat.”
WHAT DO YOUNG COUPLES THINK?
Financial circumstances aside, earlier applications could also create problems if the relationship between the young couple does not work out when the flats are ready for collection, said Professor Sing Tien Foo, provost’s chair professor for the real estate department at the National University of Singapore (NUS) Business School.
Moreover, having a higher income level at the deferred income assessment stage will mean couples receive fewer benefits under the Enhanced CPF Housing Grant which varies by income, he added.
Their average household income must be below S$9,000 in order to receive grants from S$5,000 and above.
CNA spoke to some university students to find out how they felt about the scheme.
Final-year Nanyang Technological University (NTU) student Ms Huang applied for a BTO flat with her boyfriend of seven years back in 2022 and came across the deferred income assessment while doing her research.
But the couple did not qualify for the scheme then under its current rules as only Ms Huang was a full-time student; her partner had signed on with the Air Force and was earning an income.
But the computer science student, now 24, said she still would not have taken up the scheme even if the rules had been relaxed earlier.
“If we are assessed later on, we might get (a smaller) grant because (I) would have graduated already and the income level will be higher,” she said, echoing NUS’ Prof Sing.
“We will end up loaning more money which we, in the end, need to pay off. It’s not like a discount, whereas a grant is more of a discount,” said Ms Huang, who only gave her last name.
“It’s not motivating enough for me to apply under this scheme (even if I qualified).”
Second-year chemistry student Jesslyn Tan felt that the expanded scheme would help couples who have been together for several years and are planning to settle down.
But in her case, the 21-year-old has been with her boyfriend for about two years and is not looking to apply for a BTO flat so soon, she told CNA.
“I think it’s suitable for those who are in long-term relationships already. But for people who just got together in university and (are) not looking to settle down so fast, maybe it’s not useful,” said Ms Tan, whose partner studies in ITE.
The NTU student also does not think that applying for a flat would be her top priority when her boyfriend enrols in university and she enters the workforce. “For now, I just want to focus on my career … (My concerns) are more of like ‘what job am I going to get and how (am) I going to earn?’
“I’ll worry about that kind of stuff (about BTO) later on in my life,” Ms Tan said.
For others like art design and media student Wong Yi Xiu, 21, getting a BTO flat is “not a huge thing” at the moment and she did not want to rush into applying for one.
The first-year student added that she was also not ruling out the option of turning to the private property market for her future home. “Personally, I think it’s better when my partner is in the same phase in their life as me (before) I get a (flat),” she said.
