Tuesday 27 May 2014

More help for couples to live with or near parents

Khaw floats ideas, including larger grants and top priority for flats
By Toh Yong Chuan, The Straits Times, 26 May 2014

YOUNGER couples who want to live with or near their parents may soon get more help, said National Development Minister Khaw Boon Wan as he mulls over measures to help them.

On the cards are possibly larger housing grants, more three- generation flats and even doing away with balloting completely, by giving them "absolute priority" when flats are balloted.

This is in addition to the larger grants and higher number of chances that they currently enjoy for buying resale and new flats respectively.

The likely new measures were disclosed by Mr Khaw in his blog yesterday, in which he revealed that there remains a sizeable number who are unable to live with or near their parents, even though they want to do so.



A Housing Board survey showed that the proportion of young couples who live with or near their parents increased from 31 per cent in 2003 to 37 per cent last year.

It still falls short of the 50 per cent who have expressed a desire to be near their parents, revealed Mr Khaw.

It is unclear why this remaining 13 per cent could not make the move, but he hinted that more would be done to help them. Larger grants could be an option, he said.

"We... provide a higher-tier CPF Housing Grant to eligible first-timers who buy an HDB resale flat with or in the same estate as their parents ($40,000 instead of $30,000). Should we widen the difference? Will this help more to live together or near their parents?" he asked.

He also cautioned against shutting out young couples as a result of the "alumni" effect, so that those whose parents do not live in their preferred estates still have opportunities to move into them.

Another alternative is to encourage parents to live in non-mature estates near their married children, he said.

This is because "mature estates would have limited land to build large numbers of new flats", he observed.

The Ministry of National Development has started consulting the public on a number of housing issues, including how such young couples may be helped. Members of the public can sign up for the dialogue or give their views at www.mnd.gov.sg/HomeSweetHome.

A suggestion is for greater flexibility in loan approvals to help young couples live near their parents, said Mr Terry Lim, a corporate communications manager in a volunteer welfare organisation.

The 30-year-old is marrying his 23-year-old fiancee next year and the maximum HDB loan they could take based on their current income is insufficient to buy a resale flat in Bishan or Ubi where their parents live.

"We can go for BTO flats, but it means living far away from parents and waiting a few years for the flat," he said, referring to Build-To-Order flats

"The HDB can take into account that our salaries will go up, approve a bigger loan, so that we can buy a flat near our parents."





Mixed reactions to helping families live close together
Industry players, buyers in favour of idea but fear system may be abused
By Yeo Sam Jo, The Straits Times, 29 May 2014

IN AN effort to strengthen family bonds, National Development Minister Khaw Boon Wan suggested measures to help more Singaporeans live with or near their parents - but they have drawn mixed reactions from property analysts, agents and buyers.

His most controversial suggestion was giving "absolute priority" to those applying for Build-To-Order (BTO) flats in the same estate as their parents - which would do away with balloting for these applicants.

While many were in favour of families living close together, some argued proximity to one's parents should not trump other reasons for getting a flat, such as being near schools or workplaces.

Others believe that such a priority system might be abused.

"It is not very fair to those whose parents do not currently reside in mature estates, especially the popular mature estates such as Tiong Bahru, Queenstown..." said OrangeTee's research head Christine Li. "It could even lead to unnecessary over-consumption by those who do not need public housing, but just want the flat due to the premium location."

Key executive officer of Horizon Real Estates Lena Low agreed: "Of course it'll be abused. It's giving too much priority to being close to parents. Others will have no chance to live in these areas."

Ms He Qing Pei, 24, who is searching for a flat with her 27-year-old boyfriend, said: "Proximity to parents is a factor when choosing a flat but not the most important factor for me."

The management trainee lives with her parents in Boon Lay, but wants a home in a central location like Toa Payoh. "It's unfair if they make it the top priority and diminish other people's chances."

In a blog post on Sunday, Mr Khaw floated ideas to encourage more Singaporeans to live with or near their parents. He noted how a Housing Board survey showed the proportion of young couples living with or near their parents rose from 31 per cent in 2003 to 37 per cent last year, but still fell short of the 50 per cent who expressed a desire to be near their parents. However, he cautioned against an "alumni effect", shutting out young couples whose parents do not reside in the estate they want to live in.

To get around this, ERA Realty key executive officer Eugene Lim suggests increasing the minimum occupancy period before new owners can sell their units from five years to at least eight years to ensure commitment to the flat and prevent abuse of the system.

Mr Khaw also suggested encouraging parents to live in non-mature estates near their married children, but some feel it would be an "uphill" task.

"Old folk have their social networks and might be less adaptable," said Mr Colin Tan, director of research and consultancy at Suntec Real Estate Consultants.

Other ideas floated by Mr Khaw, such as larger housing grants and building more three-generation flats, were deemed more feasible options.

"Currently some people don't find it so affordable to live near their parents," said Mr Tan. "There are cheaper BTOs out there compared to the more expensive resale flats near their parents. An increase in grants would compensate and help them..."

Indeed, Mr Khaw had suggested providing an even higher Central Provident Fund Housing Grant to eligible first-timers who buy an HDB resale flat with or in the same estate as their parents. Currently, those who opt to live with their parents or in the same estate get an extra $10,000 on top of the $30,000 grant for families.

Mr Lim felt there would be good demand for three-generation flats, especially among second-time buyers with children.

But Mr Tan had doubts: "You often hear of in-laws quarrelling. Some people need more personal space. It should be an option but not aggressively promoted."










Most favour higher priority for families to live near parents: Poll
By Yeo Sam Jo, The Straits Times, 5 Jun 2014

AN OVERWHELMING majority of Singaporeans polled are in favour of giving more perks to people who want to live with or near their parents.

An ongoing survey by the Ministry of National Development (MND) showed yesterday that nine out of 10 Singaporeans support greater priority for those who apply to live in the same town - in both mature and non-mature estates.

About eight out of 10 respondents also backed higher housing grants for those who live close to or with their parents.

The online questionnaire, which surveys Singaporeans on their preferred housing arrangements, commenced on May 25 and will end next month. Almost 2,000 people had responded as of yesterday.

Seventy-two per cent of 949 young Singaporeans polled said they would prefer to live close to their parents after they marry - whether next door or in the same block, neighbourhood or town.

Yet, 76 per cent of them plan to set up their own homes and not live with their parents.

Of these, 41 per cent cited "independence and privacy" as the chief factor behind this decision.

"I would prefer my first property to be away from my parents," said 24-year-old undergraduate Alan Tang. "There is something to be said about living independently and striking out on your own.

"Of course, as my parents get older or fall ill, I would naturally be more inclined to live under the same roof."

Army regular Lee Siang Ming and his wife chose to live with his in-laws in a four-room flat in Tampines so that they could help look after Mr Lee's nine-year-old son and seven-year-old daughter.

"We wanted someone we trust to take care of the kids," said the 29-year-old. "That way, we can feel at ease while we are at work."

Last month, National Development Minister Khaw Boon Wan floated in a blog post several suggestions to encourage more Singaporeans to live with or near their parents.

These included giving "absolute priority" to those applying for Build-to-Order (BTO) flats in the same estate as their parents, which would do away with balloting for them, and even larger grants for first-timers who buy an HDB resale flat with or in the same estate as their parents.

Currently, those who opt to live with their parents or in the same estate get an extra $10,000 on top of the $30,000 grant for families.

Singaporeans also get double the ballot chances if they apply for a BTO or Sale of Balance flat near their parents or married children, and triple the chances if they apply to live in the same flat.

Meanwhile, up to 15 per cent of the studio apartment, two-room and three-room supply in a BTO project are set aside for parents who apply for flats in the same project as their married children.

In a bid to further consult Singaporeans on how housing policies can help extended families draw closer together, the MND has commissioned a door-to-door survey, which will quiz around 2,000 respondents over the next few months.

It is also organising a series of housing conversations this month to gauge the opinions of young couples, married couples and seniors.

Members of the public can sign up for these and fill out the online survey at www.mnd.gov.sg/homesweethome





How to avoid 'alumni' effect with HDB priority
By Janice Heng, The Sunday Times, 15 Jun 2014

Most Singaporeans surveyed support the Housing Board's plans to encourage couples to live near their parents. But how to do this without penalising other applicants too harshly is another question.

In a blog post last month, Minister for National Development Khaw Boon Wan noted that half of all couples want to live with or near their parents, but only 37 per cent are able to do so. "We must do more to help families stay close to one another," he said.

He floated several ideas, including higher grants for those buying resale HDB flats near their parents' homes, a move backed by about eight out of 10 respondents in an ongoing survey by the Ministry of National Development.

More controversial, however, was the idea of absolute priority for those seeking Build-To-Order flats near their parents' homes.

This would guarantee such applicants a flat without the need to ballot, assuming there were enough flats to go around.

Nine out of 10 survey respondents supported greater priority for those wanting to live near their parents. But absolute priority?

The survey did not ask about that. Anecdotally, though, that idea does not seem popular.


One participant noted that couples whose parents live in mature estates would benefit from a higher resale value of their flat.

Flats in mature estates tend to fetch more than others on the resale market. Three-room flats in mature Clementi estate went for an

average of $382,000 in May, compared with $336,500 in neighbouring, non-mature Jurong East.

Housing experts have similar concerns. Says OrangeTee head of research Christine Li: "It is not very fair to those whose parents do not currently reside in mature estates."

Mr Khaw himself acknowledged the danger of other couples being crowded out. He highlighted the need to avoid the "alumni" effect, which refers to how Primary 1 places in popular schools are snapped up by the children of alumni, leaving barely any spots for others.

"How do we avoid the 'alumni' effect, so that those whose parents do not live in their preferred estate still have an opportunity?" asked Mr Khaw.

What lies at the heart of this issue is the fact that some estates are more popular than others because they have more amenities, higher resale prices and central locations.

Yet this also means that couples whose parents live in such estates already have an incentive to get flats there, and arguably need no further persuasion to do so.

If anything, more incentives for them could "lead to unnecessary over-consumption by those who do not need public housing, but just get the flat due to the premium location", notes Ms Li.

Given that, perhaps the HDB should focus on increasing incentives for those whose parents live in non-mature estates.

The HDB already gives greater priority to those applying for flats in an estate where their parents live, or vice versa. They get double the ballot chances that other applicants do.

If the HDB wants to do more, it could increase the ballot chances only for those with parents in non-mature estates.

Perhaps it could go as far as to introduce absolute priority for this group, and see how the first few BTO launches play out.

There are precedents for treating new flats in mature and non-mature estates differently, in recognition of differing demand. Singles, for instance, are allowed to buy two-room flats in non-mature estates only.

But what if those with parents in mature estates feel disadvantaged because they want a flat in a non-mature estate?

They are still likely to have a shot. The chance of an alumni effect is much lower in such estates.

In the latest BTO exercise in May, for instance, three-room flats in Bukit Batok and Woodlands attracted fewer first-time applicants than there were flats available - let alone applicants with parents who lived there.

As the name suggests, non-mature estates are also younger, making them unlikely to have a high proportion of older residents whose children might flood in.

Another method that avoids the alumni effect is already in place: the Multi-Generation Priority Scheme.

This scheme sets aside up to 15 per cent of the studio apartments, and two- and three-roomers in each BTO project for couples and their parents who apply for separate new flats in the same project.

Since both the parents and their married children are moving at the same time, there are no unfair advantages for those with parents living in certain estates.

Could applicants under this scheme be given absolute priority too? After all, this is unlikely to crowd out other applicants. In last September's BTO launch, just 42 such pairs of families applied.

Ultimately, in trying to get more couples to live near their parents, we should ensure that they are doing so for the right reasons.

This means, for a start, preventing the abuse of priority schemes in order to snag attractive properties. Focusing on non-mature estates is one way to do so.


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