I REFER to the letter, 'High HDB resale prices not all good news' (my paper, Sept 8).

While it is true that high resale prices for Housing Board flats may present a financial obstacle for newlywed couples, there are alternative housing options, government grants and tips that can help alleviate this problem.

Firstly, they can consider build-to-order (BTO) flats, which are constantly being launched.

These flats are released at very affordable prices and are not subject to cash over valuation (COV).

They are ideal alternatives for young couples and are often located in areas under development, where the valuation of their flat would appreciate over time.

Secondly, if one adds up all the government grants available to first-time buyers, a young couple could enjoy a rebate of up to $80,000 on the price of their HDB resale flat.

This would more than offset the COV for most flats in most areas.

Thirdly, it is necessary, whether a couple are a first-time buyer or has purchased flats before, to consider their property purchase as a mid- to long-term investment, which means five years or more. With this in mind, they should always buy within their means and maintain six to 12 months' cash reserve.

The letter writer's point that upgraders will benefit from high resale prices is important.

It is because of high resale prices that HDB upgraders can more easily make the leap from HDB to private property.

However, while the gap between the HDB resale-price index and private-property median prices is narrow, some upgraders may face a financial obstacle in making good the difference.

Therefore, instead of a situation where the Government controls HDB resale prices, it may be better for couples to exercise prudence and consider all available options before purchasing their property.

Mr Adam Tan
Corporate Communications Manager
PropNex Realty

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