Source : Sunday Times – 29 Nov 2009
Help! They are getting married but they cannot get a new flat quickly enough, the couples in distress say.
Dr Muhammad Faishal Ibrahim, an MP for Marine Parade GRC, is used to hearing such laments. He sees three to four cases a month of couples in need of a quick housing fix.
They could turn to the resale market but surging demand means the high prices are beyond the reach of many young couples.
Which is why Dr Muhammad said: ‘Housing should be part of your wedding plans.’
In other words, couples should plan ahead, like what transport planner Teo Ti Pin has done. Wedding bells for him will ring in 2013 when his new five-room flat in Punggol is ready.
He and his girlfriend of five years have registered under a scheme for courting couples to book new HDB flats.
They are not alone. Four in 10 first-time applicants for new flats are under this fiance/fiancee scheme.
They need to produce their marriage certificate only within three months of getting the keys to their flat.
While the HDB said this proportion is ‘high’, Dr Muhammad feels it could be higher.
Sure, there is a wait for the flat to be built, but the payoff is in not coughing up a big sum to get a resale flat.
High demand for such units has caused prices to surge, by 3.6 per cent in the third quarter this year compared to the previous quarter – a record high in five years.
The cash-over-valuation (COV) – or the cash top-up payable by buyers above a flat’s valuation – also quadrupled from a median of $3,000 in the previous quarter, to $12,000 in the third quarter.
Dr Muhammad, an assistant professor of real estate at the National University of Singapore, feels that couples who run into trouble with housing often fail to plan ahead.
‘I’ve met residents who are often in distress and can’t get a flat because they apply six months or a year before their wedding date, without thinking it takes three years to build the flat,’ he noted.
Indeed, Mr Teo, 26, said he was advised by a colleague this year to plan earlier for a flat.
The couple, who met in their first year in university, want to settle down in a few years’ time. His girlfriend, Ms Ng Yizhen, 24, a researcher in a laboratory, wants to have children before she turns 30.
They initially looked for a resale flat near his parents’ home in Boon Keng. Weekends were spent viewing flats in Toa Payoh, Potong Pasir and Serangoon but prices were beyond their reach.
‘People were asking for at least $20,000 cash-over-valuation. A four-room flat cost at least $450,000,’ said Mr Teo.
Their combined income just about exceeds $6,000 a month.
Mr Teo said while they would have married if they could find a resale flat, they are not in such a rush that they would rent or move into either of their parents’ homes.
The HDB scheme, which was started in the 1960s, carries with it the risk of a couple’s relationship turning sour while they wait for the flat to be built.
They cannot replace the name of their partner with that of another, or a parent.
They will also have to forgo the downpayment – 5 per cent of the flat’s selling price – if they give up the unit, as is the case with married applicants.
While acknowledging the risks, Dr Muhammad said the upside is that couples have a new flat when they begin their married lives.
Engineer Dennis Ee, 27, who is on the scheme, feels the same way. He is mindful of the risks in joining the scheme but ‘we are quite sure we will commit to each other’.
He and his girlfriend, Ms Ashley Qiu, 26, also an engineer, are due to get their four-room flat in Punggol in 2013.
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