SINGAPORE — The Housing and Development Board (HDB) will raise the income ceilings — for the second time since 2011 — for Build-To-Order (BTO) flats and Executive Condo (ECs), said National Development Minister Khaw Boon Wan yesterday, as he looks to “give every Singaporean couple a chance” to live in an HDB flat even though they may have greater means and do not need Government-subsidised housing. Upcoming executive condo launches include The Brownstone EC and Signature At Yishun EC while existing ones include The Terrace EC , Waterwoods EC and Skypark Residences.
The new limits could be rolled out as soon as August or September. Around the same time, the HDB is also expected to launch a new “two-room flexi” scheme which has been in the works. The new initiative would merge the existing studio apartment and two-room-flat schemes, and offer buyers flexibility in lease lengths.
“If you ask for my personal opinion … I generally prefer to give every Singaporean couple a chance of living in (a) HDB (flat),” Mr Khaw said during a live radio talk show on MediaCorp’s Chinese-language station Capital 95.8FM.
“You may come from, say, an upper-income group. You do not need an HDB flat. But I feel that it’s good for … almost all Singaporeans to have a chance of living in HDB for five years, and interact with the community.”
He added: “It’s part and parcel of the Singaporean way of life. It’s just like males go for National Service … If we can give them this opportunity of staying in HDB towns, I think there are more positives than negatives.”
Currently, the income ceilings for BTO flats and ECs are S$10,000 and S$12,000, respectively. These were each raised by S$2,000 in August 2011 — some 17 years after the limits were previously revised.
Adding that income levels have increased over the last four years, Mr Khaw said that about 80 per cent of Singaporeans meet the existing BTO income ceiling. Based on data from the Department of Statistics, median monthly household income from work was S$8,292 last year, up from S$7,037 in 2011.
Property analysts TODAY spoke to were caught off-guard by Mr Khaw’s announcement, given that the income ceilings were raised just four years ago. Mr Chris Koh, director of property firm Chris International, felt the move was aimed at helping couples earning just above the current limits.
“We now have the 30 per cent MSR (Mortgage Servicing Ratio) for housing loans, so even for buyers whose income is S$10,000, what they can purchase under the MSR limit is not a big property,” Mr Koh said. He suggested raising the income ceilings to S$12,000 and S$15,000 for BTO flats and Executive Condo, respectively.
Mr Ku Swee Yong, chief executive of property firm Century 21, noted that raising the income ceilings would result in keener competition for BTO flats. He argued that the move could go against the intent of keeping BTO flats affordable for the lower-income group. “By letting more people be eligible, the lower-income families may stand a lower chance of securing a (house) for themselves,” Mr Ku said.
The previous revision of the income ceiling was done after the 2011 General Election, and the analysts noted that this time round, such a move could sweeten the ground ahead of the next GE, which must be held by January 2017. “I do think this will help them score votes,” Mr Koh said.
Elaborating on the new “two-room flexi” scheme, Mr Khaw said that the tenures could range between 30 and 99 years to accommodate the needs of different groups including singles, families with children and the elderly.
There would be restrictions to, for instance, prevent a young couple from buying units with a shorter lease.
“Should we allow a young couple to buy a 50-year lease?” Mr Khaw said. “While the price may be cheaper for them, our worry is 50 years is too short for them … if they are, for example, 30 years old or 25 years old, in 50 years, by the time the lease runs out, they will be 75 years old.” He added that a young couple could well afford a two-room flat with a 99-year lease under the new scheme, given the heavy subsidy accorded to first-time buyers.
Property analysts had earlier welcomed the idea of merging the studio apartment and two-room-flat schemes. Among other benefits, such a move would allay seniors’ concerns about their fate if they outlived the current 30-year lease under the studio apartment scheme, and that others want to leave the flat to their children, the analysts had said.