Executive Condo Income Ceiling To Be Timely Raised

RAISING the income ceiling for new Housing Board flats and Executive Condo would be timely, given how salaries are climbing, say property analysts, MPs and flat buyers. Upcoming executive condo include the The Brownstone EC, The Criterion EC , Parc Life EC and Signature At Yishun EC.

This would benefit the growing number of households which earn just above the current cut-off of $10,000 every month and so cannot qualify for new flats, they told The Straits Times.

National Development Minister Khaw Boon Wan hinted during his ministry’s budget debate on Tuesday that the ceiling could be raised. “As income level rises, we must be prepared to adjust the income ceiling,” said Mr Khaw, adding that he would mull over the issue.

Generally, households with a gross income of more than $10,000 are not eligible for new HDB flats. Those earning more than $12,000 cannot buy executive condominiums (ECs).

The income ceiling was last raised in 2011, from $8,000 for HDB flats and $10,000 for ECs. Before that, the $8,000 limit had remained unchanged for 17 years.

Noting that median household income for Singapore residents had jumped by 17.8 per cent since 2011 to $8,292 last year, real estate company OrangeTee’s manager of research and consultancy Wong Xian Yang said raising the limit would be fitting. He expects it to go up to around $12,000.

The median income for a man in his early 30s is $4,333, while a woman in her late 20s gets around $3,150, according to Ministry of Manpower figures for last year. This means the combined income for a couple getting married at this age would be $7,483 – well below the current $10,000 ceiling.

But Mr Gan Thiam Poh, an MP for Pasir-Ris Punggol GRC, noted that some couples marry late.

Citing the example of a couple looking for a flat in Sengkang, he said their total pay crossed the $10,000 mark after the husband was promoted, and they could no longer qualify for a Build-To-Order (BTO) flat. “We don’t want their career achievements to turn out to be penalties,” he said.

Another buyer in a similar situation is Ms Tan Si Hui, 30. The lab researcher and her boyfriend, whose combined income recently went up to $10,500, have failed in their past five BTO applications.

“We don’t want to risk putting money into private property, especially with the rising cost of living in Singapore,” said Ms Tan, who is now looking for a resale flat instead.

On Tuesday, Mr Gan and fellow MPs Lee Bee Wah (Nee Soon GRC) and Hri Kumar Nair (Bishan-Toa Payoh GRC) called for either raising the income ceiling or removing it altogether.

“The income ceiling is too blunt a tool, (it) does not take into consideration the circumstances faced by each family such as the number of dependants,” said Mr Nair.

But Mr Khaw disagreed.

“I don’t think we want to lift the income ceiling completely,” he said, noting that Housing Board flats are heavily subsidised and are aimed at those who need help more.

Raising the income ceiling might also edge out more lower- income families during balloting, warned property agency Century21 chief executive Ku Swee Yong.

“We are risking not paying enough attention to those people who are earning less,” said Mr Ku, adding that households that fall above the income ceiling can well afford alternatives, like resale flats. “The current ceiling is already very generous.”

Mr Wong acknowledged, however, that the income limit for three-room flats in non-mature estates and two-room flats is lower at $5,000. He added that the price gap between resale and BTO flats has been growing, making resale flats a less viable alternative for households which have busted the income ceiling.

According to figures from the Ministry of National Development, the price difference in the outside central region was 31 per cent last year, up from 18 per cent in 2004.

executive condo and housing situation