Huttons Asia has provided insights into the recent enhancements to the Silver Housing Bonus (SHB) and the increase in the Fresh Start Housing Grant, which aim to improve retirement adequacy and support home ownership for families with children. The changes allow seniors to retain cash proceeds whilst using refunded CPF monies to qualify for the SHB, potentially encouraging them to downsize to smaller flats.
This could increase the supply of larger resale flats and alleviate market tightness by 2025, although demand for smaller units may rise.
The SHB is now extended to private property owners with an annual value up to S$31,000 who choose to downsize. However, Huttons notes that the annual value threshold is low, limiting the number of private property owners who can benefit. Consequently, the impact on both the private residential and HDB resale markets is expected to be minimal.
Additionally, the Fresh Start Grant has been increased to S$75,000 for second-timer families with children living in public rental flats. These families can now purchase flats with flexible lease terms ranging from 45 to 65 years, provided the lease covers the youngest applicant until age 95. Whilst this offers families a permanent home, it may limit their ability to monetise the flat for retirement due to the decaying lease.
Huttons anticipates that the number of families benefiting from the Fresh Start Grant will be small, with negligible effects on the resale market.
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