The Ministry of National Development points out that resale HDB transactions will ultimately have to be priced according to the wishes of both buyers and sellers; with the current high interest rates and global economic uncertainties, buyers are still price sensitive and may be pushed out of the market if sellers raise their asking prices.
The increase in CPF housing allowance is targeted at first-time buyers who meet certain income requirements, rather than all HDB resale buyers, which will have limited impact on the resale market.
First-time buyers of two- to four-bedroom HDB flats will receive an additional $30,000 in CPF Housing Grant, and $10,000 for five-bedroom or larger flats.
Some property analysts believe that the increase in the housing grant may prompt some sellers to raise their asking price, pushing up the resale price of HDB flats.
Given the potential impact of the increase in the purchase allowance in a strong resale market, the Government will only allow higher allowances for eligible first-time buyers, whose monthly household income must not exceed $14,000, and for singles, whose monthly income must be below $7,000.
In the past two years, about one-third of resale HDB flat buyers received CPF housing subsidies.
For first-time buyers who prefer a specific location or want to own a new home sooner, the resale HDB market can meet their housing needs.
Of course, the increase in HDB resale prices has caused anxiety among some first-time buyers, and while there are initial signs of easing in the market following two rounds of cooling measures in December 2021 and September 2022, it will take some time for these initiatives to take effect.
To assist eligible first-time home buyers and singletons to be able to buy their own homes, the Housing Development Board has increased the CPF Housing Grant.
Families purchasing a four-bedroom or smaller flat will receive an increase from $50,000 to $80,000, while those purchasing a five-bedroom or larger HDB flat will receive $50,000, $10,000 more than before.
The allowance for a single first-time buyer of a four-room or smaller flat is increased from $25,000 to $40,000, while the allowance for a single buyer of a five-room flat is increased from $20,000 to $25,000.
It is expected that more than 10,000 first-time buyers and singletons will benefit from the increase in the CPF housing allowance in the first year.
Increase in allowance for first-time buyers of HDB flats. This is a targeted measure to address the concerns of some first-time buyers who cannot afford or cannot afford a HDB flat through practical subsidies.
These measures include:
i. First-time buyers of two- to four-bedroom resale HDB flats will receive a CPF flat purchase allowance of $80,000, $30,000 more than before, and $50,000 for five-bedroom or larger flats, $10,000 more than before.
Secondly, the additional allowance increase for single persons is 50% of that for families.
Third, young couples aged 40 and below who are interested in buying their first home, as well as families with children, will have an extra chance in the lottery when they apply to pre-buy a HDB flat.
The price hike has seen a lot of online discussion on the subject of whether the country can afford HDB flats. One, it is a realisation that the current resale prices are indeed already too high for some first-time buyers (especially in established areas).
Secondly, it shows that the government will not sit back and do nothing anyway, and will take action when it is time to do so. The focus on first-time buyers is also the right approach, as the Government's policy of making HDB flats available to every family (both for purchase and rent) is one that it will always uphold and cannot be questioned.
As to whether the new measures will boost the resale market, the Ministry of National Development explained in a release last night that not all open market buyers will receive the extra allowance, and only single first-time buyers with a monthly household income of up to $14,000 or an individual income of up to $7,000 will be eligible; it is estimated that 10,000 first-time buyers will benefit in the first year of implementation.
It is estimated that 10,000 first-time buyers will benefit from the measure in the first year of implementation. Based on free market principles, sellers may lose more than they gain if they overpay for the new allowance.
The current long waiting time for pre-purchase of HDB flats, mainly due to delays caused by the epidemic, has led some eager home buyers to turn to the resale market, driving up resale prices.
The Government has already implemented cooling measures in the resale market to moderate demand, and it is believed that the launch and completion of more pre-owned HDB projects in the next few years will further moderate demand and prices for resale HDB flats.
It is imperative that the immediate needs of some first-time buyers are addressed. It is believed that in the short term, the newly introduced measures will at least give them peace of mind and more choices.
This practical action shows that the Government will keep its promise of home ownership and will adjust its measures to help people own their homes according to the needs of the situation, so as to ensure that HDB flats are affordable and accessible to the people of Hong Kong. People's doubts are unwarranted.
While the Home Ownership Policy ensures that every family can afford to buy a HDB flat, it is not possible for everyone to buy the flat of their choice.
It is understandable that some people insist on buying a HDB flat in a mature district for various reasons, such as living close to their parents, or planning for their children to attend a prestigious school, or because there are better facilities in the mature district, but there is unlikely to be as much land available in these areas to meet people's needs. Therefore, it is also necessary for homebuyers to adjust their mindset appropriately.
Of course, this is not to say that the HDB cannot brainstorm ways to enhance the attractiveness of non-mature districts.
It is undeniable that at the initial stage, the facilities in non-mature districts are generally unable to keep pace with each other, thus causing many people to be deterred from moving forward, especially young people who were born and raised in mature districts and are used to the convenience of living there.
To overcome this problem, it is necessary to speed up the development of various facilities in the new towns, such as nurseries, kindergartens, schools, cafes, bakeries and hawker centres.
Neighbourhood shops also play an important role in making HDB flats in non-mature areas more attractive.
If the development plan of the new district also covers the development of these infrastructures, e.g. by offering rent concessions in the initial years to attract shops to move in early, the new neighbourhood can be energised more quickly and the rejection of young applicants can be reduced.
There is a trend towards younger local housing agents. The three major real estate agencies noted that at least 10% of their agents are under the age of 35. Some companies have seen a year-on-year increase of up to 12% in the number of young housing agents.
The age of buyers and sellers is also now younger, closer to the age of the real estate agent and better able to understand their needs.
As of January this year, almost 21% of the estate agents at this firm were aged 35 and under, an increase of about 1% year-on-year.
Another operator had more than 30% of its housing agents under the age of 35, up 12% year-on-year.
The youthfulness of housing agents is also due to the fact that they want to try out some of these careers where they are more able to have flexibility. The barriers to entry are not very high either, and commissions are earned. Although the barriers to entry are not high, the competition is fierce, so not every young person can achieve good results.
Figures provided to New Media News by the Council of Real Estate Agents show that the number of real estate agents has been increasing year on year, with 34,427 as at January 1 this year, the highest number to date. Newly registered agents numbered almost 2,180 last year.
According to the academics interviewed, theoretically, a larger number of agents means more competition, which means they have to be as productive as possible, which is a positive effect on the market.
