Should you apply for a HDB flat if you're single and just turned 35?

As someone born in the 1980s, it's often easy to forget just how far we've come as a country. No, I'm not just talking about all the glorious achievements we've been harping on, especially during SG50.

But I'm talking about the tiny steps we've been taking to make our country a little more inclusive. For singles, in particular. Did you know that before 1991, single Singaporeans couldn't even buy an HDB flat?

So what happened in 1991?

The Single Singapore Citizen Scheme was introduced, so that singles above 35 years old could buy HDB flats. It was one of the first changes introduced by Mr. Goh Chok Tong after he became Prime Minister the year before. Back then, ownership of HDB flats by singles was only restricted to 3-room or smaller resale flats and only in less popular estates.

It took almost a decade before singles could buy a resale flat anywhere on the island, and it was only in 2004 that singles had no restrictions on flat size. In 2013, over a decade after the BTO flat system was introduced, singles were finally allowed to buy subsidised flats directly from the HDB, but only two-room flats.

What should singles know about buying HDB flats today?

Singles need to consider a couple of things when applying for an HDB flat. If you're earning more than $6,000 a month, you're not eligible to buy a flat.* If you're earning more than $6,000, you're eligible to buy a resale flat of any size**, but not a BTO flat. If your monthly income is $6,000 or less, you are also eligible to buy a new subsidised two-room flat in a non-mature estate.

(*UPDATE 10/3: Thank you to the many readers who pointed out this error. There is no income ceiling to buy a resale flat, but if you earn more than $6,000 you will not be eligible for any grants or obtain an HDB housing loan.

**UPDATE 14/3: As of November 2015, the income ceiling for singles to buy a new flat from HDB has been raised from $5,000 to $6,000.)

If you meet those income requirements, you are then eligible for a Singles Grant of $15,000 if you're buying a resale flat. If you're buying a BTO flat, the price of the flat is already subsidised. Regardless of whether you're buying a new or resale flat, you may be eligible for further grants, like the Special Housing Grant, for amounts from $2,500 to $40,000, depending on your income, as well as a Proximity Housing Grant (if you buy a resale flat to live with your parents) of $10,000.

So, if you're turning 35 this year, should you apply for an HDB flat?

If you're an 80's kid like me, you'll be 35 before this decade is over. Should you be looking at applying for an HDB flat as soon as you're eligible? Here are 3 points you'll want to consider:

1. Grant money is easy money

Okay, so maybe that was a pretty mercenary way to put it, but the truth is, we're Singaporeans, and we know a free gift when we see one. Whether we're planning to live in a flat permanently or not, there's no harm getting some money in the process. Grant money does not need to be returned to the government when you sell your flat. It's yours to keep.

If you're buying a resale flat, that's anything from $15,000 to $35,000 in grants you're eligible for. If you're buying a BTO flat, you may get anything from $2,500 to $40,000, on top of your already-subsidised housing. That's honestly easy money.

Of course, most of these grants depend on your income, which brings me to my next point.

2. Your income may increase as you grow older

If you don't apply for an HDB flat as soon as you turn 35, there's a chance you might not be eligible for grants to buy an HDB flat because your income has exceeded the requirement. As I mentioned earlier, any single earning more than $5,000 is no longer eligible to buy a new HDB BTO flat, and any single earning more than $6,000 will not be eligible for any grants. But even if you think you'll never earn that much money (which is a pretty depressing thought in Singapore with our high cost of living) that doesn't mean that you can afford to wait.

Since the grant amount you're eligible for is based on your income, it makes even more sense to apply for your flat while your income is still low in order to maximise the grants you can get. Of course, that doesn't mean you should manipulate your income too much before applying for a flat - remember that TDSR requirements are designed to ensure you only buy a flat you can afford.

3. The property market is pretty cheap right now, but it won't stay cheap for long

Two-room BTO flats were recently sold at prices as low as $80,000. On the other hand, resale flats went for a median price of $280,000 to $367,500 for 3-room flats last quarter. That's the result of a slow but steady uptrend over the past 5 years that seems to have stalled for now, but not for long.

In that sense, there really is no better time to buy an HDB flat as soon as you're eligible for one.

But do ask yourself these questions first:

- Can you afford to buy a new property? The cost of the flat may seem cheap, but you'll find yourself with high initial costs, not just for your downpayment, but also renovation costs.

- If you're currently living with your parents, are you willing to give up those comforts? For most of us, living with our parents is still going to be easier on our wallets. There are many things we often take for granted when we're living under their roof, like the convenience of living in a mature estate for example, that we may not get to enjoy in a new property.

- Do you think you might get married in the next 10 years? That might affect your decision to buy a BTO flat. Since it can take up to 3 or even 5 years before you get your keys, and then there's the Minimum Occupation Period of 5 years, that's at least 8 to 10 years you'll both need to stay in that 2-room shoebox of an apartment. That might not be a problem if neither of you are planning to have kids, but if you are - it might make more sense not to tie yourself down to a 2-room BTO flat when you'll be eligible for subsidised housing once you find the right person. Or the most convenient person, really.

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