Have you ever wonder how did Housing & Development Board (HDB) come out with this magic number of 35 years old? Here could be some reasons for it.
New flats are prioritized for applicants with family nucleus status
Family nucleus in HDB’s definition is as follows;
- Public Scheme; Spouse and children, parent and sibling
- Finance/ fiancée
- Orphans scheme
As you can see that there is no Singles scheme under family nucleus. That is why many grants and HDB priority scheme are designed to encourage citizens to set up family. Also not forgetting the additional baby bonus announced in August 2015. Of course, these pro-family incentives are totally logical as replacement rate is the key to survival for any country or civilization. If you beg to differ, I would recommend you to read this thought-provoking book by Jared Diamond – Collapse.
With the retirement age of 65 years old and the maximum tenure of 30 years for HDB loan, the latest age for one to enjoy maximum tenure is at 35 years old. Hence, in order to allow single Singaporean a chance to own a new flat, after giving priority to others with family nucleus, the earliest age to buy and yet enjoy the maximum tenure is then at 35 years old. This is arguably the most obvious reason why it was set at 35 years old when it was first announced in July 2013.
Updated HDB loan maximum tenure
Shortly after the announcement for 35 years old singles eligibility to buy new flats, the maximum tenure has been shortened from 30 to 25 years. In other words, singles Singaporeans now can still obtain the maximum loan tenure even at 40 years old, but at a higher monthly repayment due to the shortened loan duration.
Will the minimum age for singles purchasing new flat be increased? Most likely no, unless the over-supply of new flats is swallowed by increased demand such that applicants registered as a family nucleus are facing more difficulties to get a flat.
Can singles better utilize their funds before they turn 35?
Yes certainly! If you have been working for the past few years and have not bought any property, you can comfortably purchase a 2 bedrooms condominium with some simple planning.
All in all, do not wait till you are nearing 35 years old to start planning for your first asset. Start early, start now and be financially vigilant to utilize your cash optimally. Contact me today for a simple assessment on your financial health and opportunities to grow!