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New housing rules from 10 May 2019

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Posted (edited)

Some info on pro rated CPF used for <95 ... Basically every drop in 5 yrs , CPF drop by 2 X ... 

so 5 yrs --- 10 % drop in CPF

15 yrs    --- 30% drop in CPF

 

 

https://www.mom.gov.sg/newsroom/press-releases/2019/0509-more-flexibility-to-buy-a-home-for-life

 

 

 

 

More Flexibility to Buy a Home for Life While Safeguarding Retirement Adequacy

 

9 May 2019

JOINT MND-MOM PRESS RELEASE

Rules on CPF usage and HDB housing loans have been updated to provide more flexibility for Singaporeans to buy a home for life, while safeguarding their retirement adequacy. The rules will now focus on whether the remaining lease of the home can cover the youngest buyer until at least the age of 95. If so, home buyers will be allowed to obtain maximum CPF usage and HDB housing loan (for HDB flat buyers). Those who do not meet this criteria will still be able to use CPF and take up an HDB housing loan, but the amount will be pro-rated. 

2. The updated rules will take effect from 10 May 2019. Majority of home buyers will not be affected as they are already purchasing a property which lasts them to the age of 95. 

Updates to CPF rules for all properties 

Use of CPF for property purchase 

3. Previously, the use of CPF to buy properties focused on the remaining lease of the property:

Remaining lease of property  Previous rules on total use of CPF

60 years or more  Buyer can use CPF to pay for the property up to the Valuation Limit (VL)

30 years to less than 60 years  • Buyer can use CPF if the remaining lease of the property covers the youngest buyer until at least the age of 80 

• Total amount of CPF that can be used is capped at pro-rated VL

4. These rules have to be updated to take into account the changing needs and higher life expectancy of Singaporeans. Under the new rules, the total amount of CPF that can be used for property purchase will depend on the extent the remaining lease of the property can cover the youngest buyer to the age of 95.

 

 

post-59158-0-85641600-1557733941.jpg

 

 

5. To ensure prudent use of CPF monies, there will still be a minimum lease requirement for the use of CPF for property purchases. This will be lowered to 20 years (from the existing 30 years), in line with the existing criteria for HDB loans. 

CPF withdrawal rules after age 55 with a property 

6. Previously, CPF members above the age of 55 could withdraw their CPF savings above the Basic Retirement Sum (BRS) if they owned a property with a remaining lease of at least 30 years. This was to ensure that they have secured a home in retirement and a basic level of retirement income. 

7. To encourage CPF members to have a home for life and to secure at least a basic level of retirement income, CPF members will now need to have a property with sufficient remaining lease to cover them until at least the age of 95, before they can withdraw their CPF savings above the BRS. This change is not expected to affect most CPF members, as all HDB flats and the vast majority of private properties have leases that can last a 55-year old member until the age of 95. 

Updates to HDB housing loan rules for flat buyers 

8. Previously, buyers of HDB flats faced restrictions on the amount of HDB housing loan they could get to purchase flats with remaining leases of less than 60 years. 

9. With this update, buyers will now be able to take an HDB housing loan of up to the full 90% Loan-to-Value (LTV) limit , if the remaining lease of the flat can cover the youngest buyer to the age of 95. 

10. If the remaining lease of the flat cannot cover the youngest buyer to the age of 95, they can still take an HDB loan but the LTV limit will be pro-rated from 90%, based on the extent that the remaining lease can cover the youngest buyer to the age of 95. 

11. Put together, these changes will give buyers more flexibility when buying a home for life while safeguarding their retirement adequacy. A summary of the updated rules on CPF usage and HDB housing loan is in Annex A. Examples of how buyers will be affected by the updates are in Annex B. Further details on the CPF changes are in Annex C

Implementation 

12. The updated rules will apply to: 

• HDB flats: Flat applications received on or after 10 May 2019. 
• Private properties and Executive Condominium units: Option to Purchase or Sales & Purchase Agreement signed on or after 10 May 2019. 
• CPF withdrawals: Applications received on or after 10 May 2019. 

13. Buyers can click on the following links to use the online calculators to compute their allowable CPF usage (public and private housing) and HDB housing loan: 

CPF usage

• HDB housing loan 
New flat 
Resale flat

14. Buyers who bought properties before 10 May 2019 and are still servicing their housing loans will not be affected by these changes. Members who bought their property and turned 55 years old before 10 May 2019 can continue to apply to CPF Board to withdraw their CPF savings above their BRS under the previous rules. 

15. Those who are mid-way through a property purchase can approach CPF Board or HDB for clarifications and assistance. 

16. For enquiries, members of the public can contact: 

CPF usage 

• CPF Board Service Line : 1800-227-1188 
• Write to us : cpf.gov.sg/askcpf 

HDB housing loan 

• HDB Sales/Resale Customer Service Line : 1800-866-3066 
• HDB Branch Service Line : 1800-225-5432 


Issued by : MND & MOM 

Date : 9 May 2019 

  

Annex A 

Updated Rules on CPF Usage and HDB Housing Loan

 

 

post-59158-0-90259600-1557733803_thumb.jpg

^For HDB flats, the point of purchase refers to the flat application date. For private properties and Executive Condominium units, the point of purchase refers to the Option to Purchase or the Sale & Purchase Agreement exercised date. 

  
Annex B 

What The Updates Mean to Property Buyers 

A. Majority of buyers will not be affected by the changes. 


Example 1: Sammy and Devi are both 25 years old; they just got married and are buying their first home.

Age of Youngest Buyer 25 years old   Property Type  
 5-room resale HDB flat 
85 years remaining lease 
[i.e. lease covers Sammy and Devi until at least the age of 95] Lower of Property Price or Market Value   $430,000

The couple’s maximum CPF usage and HDB housing loan limits are not affected by the updated rules. 

As the property covers them until at least age 95, they may also request to withdraw CPF savings above their Basic Retirement Sum (BRS) when they turn 55.

 

post-59158-0-82634200-1557733569_thumb.jpg

 

*Applicable limit for buyers who have not set aside the BRS. Usage beyond the Valuation Limit (up to applicable limits) is allowed if the property buyers have accumulated their BRS. 
Note: 
1. Banks also take reference from CPF restrictions when assessing how much loan to lend. 
2. Actual loan amount is subject to credit assessment which takes into account, among others, buyer’s income and age. 


B. Those who buy a home for life would face less restrictions on their CPF usage.

Example 2: John (age 48) and Jane (age 45) are buying a flat to move closer to their parents’ homes.

Age of Youngest Buyer  45 years old Property Type 4-room resale HDB flat 
50 years remaining lease 
[i.e. lease covers youngest buyer (Jane) until at least the age of 95] Lower of Property Price or Market Value $430,000

Under the updated rules, the couple may use up to $86,000 more of their combined CPF savings to buy the flat. Their HDB housing loan does not change. 

As the property covers them to age 95, they may also request to withdraw CPF savings above their BRS from the age of 55. 

​ post-59158-0-21207100-1557733471_thumb.jpg

 

*Applicable limit for buyers who have not set aside the BRS. Usage beyond the Valuation Limit (up to applicable limits) is allowed if the property buyers have accumulated their BRS. 
Note: 
1. Banks also take reference from CPF restrictions when assessing how much loan to lend. 
2. Actual loan amount is subject to credit assessment which takes into account, among others, buyer’s income and age. 

C. Those who buy a home with a remaining lease that does not cover them to the age of 95 will be able to use CPF and take up an HDB housing loan, with limits to safeguard their retirement adequacy. 

Example 3: Nick and Cheryl are both 25 years old; they just got married and want to buy their first home.

Age of Youngest Buyer  25 years old   Property Type 4-room resale HDB flat 
65 years remaining lease 
[i.e. lease does not cover Nick and Cheryl until at least the age of 95] Lower of Property Price or Market Value  
 $430,000

Under the updated rules, the maximum CPF usage is reduced by $43,000 while the HDB housing loan is reduced by $38,700. 

 

post-59158-0-34929800-1557733353_thumb.jpg

 

 

*Applicable limit for buyers who have not set aside the BRS. Usage beyond the Valuation Limit (up to applicable limits) is allowed if the property buyers have accumulated their BRS. 
Note: 
1. Banks also take reference from CPF restrictions when assessing how much loan to lend. 
2. Actual loan amount is subject to credit assessment which takes into account, among others, buyer’s income and age. 

As the property does not cover them to the age of 95, they will not be able to withdraw CPF savings above their BRS from the age of 55 (except for the first $5,000 from the age of 55, and 20% of their RA savings from their payout eligibility age). 

If they buy a flat which has a longer lease coverage, they will be able to use more CPF. Their HDB housing loan will also be higher.

 

post-59158-0-78855400-1557733269_thumb.jpg

 

 

*Applicable limit for buyers who have not set aside the BRS. Usage beyond the Valuation Limit (up to applicable limits) is allowed if the property buyers have accumulated their BRS. 
Note: Examples above assume lower of price or market value is $430,000 across all flats. 

Annex C 

Further Information on CPF Changes 

Consequential changes to purchase of multiple properties using CPF: Previously, CPF members needed to set aside the Basic Retirement Sum (BRS) before excess Ordinary Account (OA) monies could be used to purchase second or subsequent properties. From 10 May 2019, members who do not have any property bought using CPF monies that covers them until at least the age of 95 will need to set aside the Full Retirement Sum before using excess OA monies to purchase second or subsequent properties. Members who have a property with remaining lease that covers them until at least the age of 95 will not be affected (i.e. previous rules apply). Members in a buy-first-sell-later situation are not affected if they dispose of their previous property within the six-month grace period. 

Consequential changes to CPF usage after age 55: For purchases from 10 May 2019, the remaining lease of the property needs to cover the buyer until at least the age of 95 for the buyer to use Retirement Account (RA) savings above the BRS to pay for the property. Members approaching age 55 can ask CPF Board to reserve their OA savings so that they may continue servicing their mortgage payments after the age of 55. Those facing difficulty servicing their housing loans can approach HDB or CPF Board for assistance.

Edited by Angcheek
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Posted (edited)

it seems like the changes also want to curb the crazy million dollar resale hdb

so that siaolang dont insanely throw all the cpf$ into million dollar hdb which turn to $0 after 99 years

if they want to pay $1M ... can ... use ca$h

Edited by Wt_know

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it seems like the changes also want to curb the crazy million dollar resale hdb

so that siaolang dont insanely throw all the cpf$ into million dollar hdb which turn to $0 after 99 years

if they want to pay $1M ... can ... use ca$h

 

those over Million one are still young flats ... I think the new changes wont affect this group. 

Easily pass the 95 limit test . Or did I missed somethiing ? 

 

 

for those who have already bought flat over million , if they rich , no problem . 

 

if they expecting to make some quick $ ... I think this will become harder now. 

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those over Million one are still young flats ... I think the new changes wont affect this group.

Easily pass the 95 limit test . Or did I missed somethiing ?

 

 

for those who have already bought flat over million , if they rich , no problem .

 

if they expecting to make some quick $ ... I think this will become harder now.

Must say congratulalation to the idiot!
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$1 million HDB (usually):

 

- central (saves time for family's daily travel)

- near / at MRT

- plenty of amenities

- near workplace

- near premium schools

- (sometimes) premium address

- (sometimes) culturally rich areas

 

If rent such a place, the rent is probably around $3000-3500 per month based on today's low rent price. Some 30 years to recoup the full rent with some length of lease left.

 

May be a good deal for some if they can unleash the value.

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+1

Those people who buy the 1mil HDB aren't fools..

Huge units, great locations, lots of amenities..

 

For example, if the two blocks near Farrer MRT come on sale, I'll buy them in a snap... or the new Dawson area.. also very nice

You can smile at your neighbours who paid 2-3 times more for their fancy condos. 

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Posted (edited)

+1

Those people who buy the 1mil HDB aren't fools..

Huge units, great locations, lots of amenities..

 

For example, if the two blocks near Farrer MRT come on sale, I'll buy them in a snap... or the new Dawson area.. also very nice

You can smile at your neighbours who paid 2-3 times more for their fancy condos. 

 

The difference is in the potential capital appreciation.

 

The old HDB, while has great conveniences, spacious, etc.....has almost no chance of capital appreciation unless there is some form of policy change which the authorities are trying to tweak now.

 

The below chart tells you the current story.  All Condos $psf appreciation vs All HDBs $psf appreciation.

 

Note : Chart below does not include EC

post-69683-0-83499100-1557981175_thumb.jpg

Edited by Icedbs
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Posted (edited)

$1 million HDB (usually):

 

- central (saves time for family's daily travel)

- near / at MRT

- plenty of amenities

- near workplace

- near premium schools

- (sometimes) premium address

- (sometimes) culturally rich areas

 

If rent such a place, the rent is probably around $3000-3500 per month based on today's low rent price. Some 30 years to recoup the full rent with some length of lease left.

 

May be a good deal for some if they can unleash the value.

who is the idiot pay $3.5k to rent an old HDB with gianpeng furniture and dirty toilet bowl?

muahahahaha ... huat ah!

and the rules to rent out hdb keep changing and tightening

overnight can strike the million dollar hdb rental dream to $0

Edited by Wt_know

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who is the idiot pay $3.5k to rent an old HDB with gianpeng furniture and dirty toilet bowl?

muahahahaha ... huat ah!

and the rules to rent out hdb keep changing and tightening

overnight can strike the million dollar hdb rental dream to $0

 

Let's take the three blocks at Commonwealth MRT. 30 plus stories high, with the train so close you can almost pee on it.

 

Take a couple or even a brace of close friends. Rent the place at say 3-3.5k and divide it up. The one who gets the master bedroom pays a bit more. 10 mins to Science Park. 15 mins to Orchard Rd. 

Market, food and weekends at Holland V. 

Ask the owner to spruce up the place, after all, it's 3.5k rental. Provide a new 55" TV and wifi and a decent toilet with hot water. All very standard requests.

 

Any takers? 

 

Plenty I'll say... Not everyone needs or wants a swimming pool and tennis courts.. of course Commonwealth Towers or Queens might be 'sexier' but these large HDB blocks have their attraction too..

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Posted (edited)

hdb got 3 bedrooms

to get that amount

at least 3-4 tenant ... 2-masterbed, 1-common, 1-common

worst is to get 6 tenants to split the cost

and toilet will be a huge challenge during peak hour to go to work

and the target are either prc, indian or pinoy FT

except prc ... most indian and pinoy FT all rent condo liao

1room studio or 2room sharing... easy to find roommate

Edited by Wt_know

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The difference is in the potential capital appreciation.

 

The old HDB, while has great conveniences, spacious, etc.....has almost no chance of capital appreciation unless there is some form of policy change which the authorities are trying to tweak now.

 

The below chart tells you the current story. All Condos $psf appreciation vs All HDBs $psf appreciation.

 

Note : Chart below does not include EC

The government is not trying to tweak policy to appreciate old hdb. If anything, they are tweaking it the other way. The recent drop in hdb resale prices is the message from government has finally sunk in. Don’t expect public housing to appreciate as it is not sustainable.

 

At the end of the day, is the higher rental yield worth the higher depreciation ? Same argument as 99 years vs freehold.

 

The answer is not that clear cut...

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If people old already and cannot afford a roof over your head can join me in Bangkok.

 

I plan to retire there. We can even have a maid to cook and also clean us.

 

:D

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Posted (edited)

The government is not trying to tweak policy to appreciate old hdb. If anything, they are tweaking it the other way. The recent drop in hdb resale prices is the message from government has finally sunk in. Don’t expect public housing to appreciate as it is not sustainable.

 

At the end of the day, is the higher rental yield worth the higher depreciation ? Same argument as 99 years vs freehold.

 

The answer is not that clear cut...

 

On the recent CPF moves for old flats, there are two camp of thoughts among the agents and agencies.

 

The first camp focuses on the positives....older folks can now use more cpf to buy older flats,  so that should bring more demand to old flats, at least sustaining their value.

 

The 2nd camp focuses on the limitation, that younger folks may be discourage to buy older flats now, so lesser demand on the older flats causing more depreciation.

 

Time will tell which way it will go.

 

However, if we look at all the other moves such as HIP2, VERS and enlarging the radius from 2km to 4km for proximity grant, it is quite clear that those moves are to help to sustain or increase the demand for older flats.

 

As for higher rental yield vs depreciation for older flats,  one has already lost the first 5 years of MOP period that they could not rent out the unit. The depreciation already had a head start for 5 years. I do not think the higher rental yield is going to be worth it in the end.

Edited by Icedbs
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On the recent CPF moves for old flats, there are two camp of thoughts among the agents and agencies.

 

The first camp focuses on the positives....older folks can now use more cpf to buy older flats,  so that should bring more demand to old flats, at least sustaining their value. [grin]

 

The 2nd camp focuses on the limitation, that younger folks may be discourage to buy older flats now, so lesser demand on the older flats causing more depreciation.

 

Time will tell which way it will go.

 

 

 

 

I also have the same thinking ... the 2 schools . and I sided the 2nd camp . 

 

i still think reducing the 30 yr to 20 yr min lease period has little impact . This can be seen as a positive act of 10 yrs benefiting older people age > 65  ... however, they also increased the min age coverage from 80-95 ... a reduce of "15 yrs " of potential buyers  age 50-60 .  

 

 

if anyone wan to downgrade , they would have done before 65 .  Selling their flat has no benefit from pledging . if they have alot of cpf , this scheme has no benefit . if they dont have cpf , this scheme doesnt help either .... ok just my own view .  [grin]

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If people old already and cannot afford a roof over your head can join me in Bangkok.

 

I plan to retire there. We can even have a maid to cook and also clean us.

 

:D

 

BKK not cheap lel .......... outskirt maybe ok . 

 

are you trying to find someone to be escape goat for ur MIL ?  :XD:

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$1 million HDB (usually):

 

- central (saves time for family's daily travel)

- near / at MRT

- plenty of amenities

- near workplace

- near premium schools

- (sometimes) premium address

- (sometimes) culturally rich areas

 

If rent such a place, the rent is probably around $3000-3500 per month based on today's low rent price. Some 30 years to recoup the full rent with some length of lease left.

 

May be a good deal for some if they can unleash the value.

 

if include INT , maybe alot more yrs ... 

 

on the other hand , people who pay such high price for BTO , likely for their own stay instead of renting out. 

if u buy for investment , u wont pay the highest price on record rite ?   [grin]

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if include INT , maybe alot more yrs ...

 

on the other hand , people who pay such high price for BTO , likely for their own stay instead of renting out.

if u buy for investment , u wont pay the highest price on record rite ? [grin]

Personally if I can choose, I will opt for the cheapest BTO and reserve the cash for private (upgrade or second property).
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Posted (edited)

that’s sound more like it ...

a below $350k bto give the highest yield in rental income

after mop chop chop rent out whole unit especially for the sengkang/punggol new bto

 

Personally if I can choose, I will opt for the cheapest BTO and reserve the cash for private (upgrade or second property).

Edited by Wt_know
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thatâs sound more like it ...

a below $350k bto give the highest yield in rental income

after mop chop chop rent out whole unit especially for the sengkang/punggol new bto

 

 

Have to sell what. U want to incur 12% absd for your 2nd property? Huh.

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Posted (edited)

Have to sell what. U want to incur 12% absd for your 2nd property? Huh.

12% ie $120k for $1M absd is sup sup water

10 years later ... rental income plus asset appreciation

no 50% no talk ... agent says one

Edited by Wt_know
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