SINGAPORE – Income ceilings for new Housing and Development Board (HDB) flats and executive condominiums (ECs) will be raised, while the Special CPF Housing Grant (SHG) will be enhanced, as the Government seeks to ensure public housing remains affordable and accessible to all Singaporeans.
In his National Day Rally speech today (Aug 23), Prime Minister Lee Hsien Loong announced to effervescent applause that monthly household income ceilings for new HDB flats and ECs will be increased by S$2,000 to S$12,000 and S$14,000, respectively. The existing executive condo includes The Terrace EC and Brownstone EC while upcoming ones include Signature At Yishun EC and The Criterion EC.
“We last raised this four years ago. Since then, incomes have gone up further and since then, we have cleared the first-timer backlog for HDBs. So, we have the possibility now to raise the income ceiling and bring more people into the eligibility net,” he said.
The last time the income ceilings were raised — also by S$2,000 — was in August 2011, 17 years after the limits were previously revised.
Data from the Department of Statistics showed that median monthly household income from work registered nominal growth of 38 per cent, or 6.7 per cent per year, in the five years to 2014. In real terms, this median income grew 18 per cent, or 3.4 per cent per annum.
Minister for National Development Khaw Boon Wan said in June during a “live” talk show on MediaCorp’s Chinese-language station Capital 95.8FM that he was in favour of more Singaporeans living in HDB flats, even if they have greater means and do not need Government-subsidised housing.
Another measure Mr Lee announced today was the increase in the income ceiling for the SHG from the current S$6,500 to S$8,500, so that middle- and lower-income households will find HDB flats more affordable. This increase will see two-thirds of households in Singapore qualify for the grant, up from around half today.
The maximum grant amount will also be doubled from the current S$20,000 to S$40,000, Mr Lee said.
“What does this mean? A median household buying a flat that previously received S$10,000 of SHG, now they will receive S$30,000 of SHG — three times as much!” he said.
Mr Lee identified HDB housing as one important way that Singaporeans can move forward together in the next 50 years. He said the HDB home-ownership programme, which started in the 1960s, has enjoyed “tremendous success”, with more than 90 per cent of HDB flat-dwellers owning their flats.
“We have achieved something unique for our people: Home ownership. And there are no ghettos or slums anywhere in Singapore … In Singapore, no matter where you are, you live in a good neighbourhood. Good homes, parks, waterways. You can feel safe and secure… This must always be the reality for all Singaporeans,” he said.
Mr Lee recounted a story about a visiting International Monetary Fund economist who stayed at the Fairmont Hotel here. The economist, identified only as Sudip, wanted to find out how big the “nice area” around the hotel was, as every city has a “rough area”.
He had decided to set off from the hotel, walk in one direction and turn around only when he had reached a “rough area”. After two hours, he gave up and turned around, concluding that there was no “rough area” in Singapore, said Mr Lee.
Presenting the Government’s housing report card for the past five years, Mr Lee said the Government had launched 100,000 HDB flats — the equivalent of four Clementi towns — and shortened queues for flats, with most first-timers able to select a flat in a non-mature estate on their first try.
“Big moves” were also taken to stabilise housing prices. In his Mandarin speech, Mr Lee said that property-cooling measures and increased supply have helped to achieve that.
Some of these measures targeted at HDB flat-purchasers include reducing the repayment period of HDB loans to 25 years from 30 years, and housing loans offered by banks to 30 years from 35 years. A mortgage-servicing ratio cap of 30 per cent is also applied to the buyer’s gross monthly income.