New Housing Grant and Household Income | Singapore Property | HDB Flat | Executive Condo

Higher-income earners will also get help

How does the new housing grant work?
Household income of $10,000 and below – Housing grant $30,000
Household income of $10,000 – $11,000 – Housing grant $20,000
Household income more than $11,000 – Housing grant $10,000.
Do the numbers work out for you?

Arc @ Tampines executive condominium.

Higher earners who want to buy executive condominiums will be eligible for housing grants – but they will not be as big as what lower earners will get. The monthly household income ceiling has been raised from $10,000 to $12,000. However, National Development Minister Khaw Boon Wan yesterday announced a ‘fairer’, tiered system to take into account the greater earning power of those who are now eligible.

Buyers with a monthly household income of $10,000 can still receive the full $30,000 Central Provident Fund Housing Grant. But any household earning between $10,000 and $11,000, will receive $20,000, while those making more than that will get $10,000.

‘I think it’s fair,’ Mr Khaw said yesterday in Mandarin. ‘If your income is higher, naturally you won’t need the subsidies as much as those earning less than you. (Thus), the higher your income, the lower the grant.’

He told reporters at The Pinnacle @ Duxton: ‘Even for those earning more, we will still give them grants, albeit in smaller amounts. I feel this would make for a fairer overall system, and people are more likely to be able to accept it.’

ERA Realty’s Eugene Lim said buyers will still welcome the raised income ceiling, even though the grant is disbursed in tiers.

‘Previously, those earning between $10,000 and $12,000 would have to buy private property, which is still pricey to them,’ he said. ‘So now they can come into the executive condominium market and still get a grant, that’s a bonus.’

Asked what effect this will have on the private property market, Mr Lim said that mass market private developers will have to price their projects competitively.

Mr Khaw also touched on the Design, Build and Sell Scheme (DBSS), which is currently under review. Introduced in 2005, it aimed to give private developers a chance to take part in the public housing market and introduce more innovative buildings.

Centrale 8 in Tampines under the DBSS scheme? Image by Sim Lian Group Limited.

But it attracted widespread criticism earlier this year when a project launched in Tampines came with sky high price tags.

Mr Khaw said he is taking his time to review the scheme, but pointed out that the DBSS income ceiling, recently raised to $10,000, is comparable to the current Build-to-Order (BTO) offerings.

‘If you believe you can afford DBSS because it’s designed by private developers, go ahead, but if you feel that (you can’t), then come to us… It really offers a choice for those earning up to $10,000, whether you want DBSS or a five-room HDB flat, our quality is as good as any.’

Analysts The Straits Times spoke to said this might spell the end of the scheme.

Anchorvale Cove BTO flats in Sengkang. Image courtesy of HDB.

PropNex chief executive Mohamed Ismail said: ‘To me, DBSS is gone as the Government has suspended all DBSS land sales and the income ceiling for it is unlikely to be raised. Moreover, BTO flats are now in direct competition with it.’

Mr Lim added that typically, BTO flats will always be the cheapest option as the pricing is controlled by the Government. ‘But it’s different for DBSS, where developers had to bid competitively for the land, and thus factor it into their launch prices. So now developers of DBSS projects yet to launch are relooking their prices.’

Editor’s Commentary:
Some may think the raise in income ceiling is not sufficient, while others may welcome it with open arms. Whichever the case, change is positive and from what we can see, this is at least a small step in the right direction.