Prime Minister Lee Hsien Loong has hinted at possible relief for the “sandwich class” who may fall just outside the income ceiling for new HDB flats. The ceiling is currently set at a household monthly income of $8,000. On another note, the Reform Party is proposing to lower the qualifying age for singles who wish to purchase HDB flats.
Couples who are about to bust the $8,000 monthly income ceiling to qualify for new Housing Board (HDB) flats may be in for some relief, Prime Minister Lee Hsien Loong hinted yesterday.
With incomes rising amid a tight labour market, Mr Lee said he expected wages to go up this year. The Government would ‘revisit’ the cap, which was set at $8,000 in 1994.
Artist's impression of Montreal Ville BTO HDB flats in Sembawang. Image courtesy of HDB.
‘The income ceiling is something which we are studying. We will revisit it again after the effects of the current round of measures become clearer.’
The Government had introduced several rounds of cooling measures to dampen speculative demand for property, the latest in January.
PM Lee did not promise that the cap would go up, but his comments made it clear he was sympathetic to the plight of couples whose incomes went up just above the ceiling. These couples have complained they are barred from buying new HDB flats but cannot afford private property.
Artist's impression of Yishun Greenwalk BTO flats. Image courtesy of HDB.
Mr Lee noted that some couples are marrying later, with some in their mid-30s who might be reaching the top of the income cap. Some were within the income ceiling while applying for a new build-to-order (BTO) flat, but a promotion or pay rise while waiting for the flat to be ready could tip them over.
‘So when they apply for BTO flats and they don’t get them, and a promotion or an increment may be on the way… what should normally be good news for celebration becomes a cause for anxiety because they may be promoted out of range (of the income cap),’ he told reporters at a media conference.
The affordability of HDB flats has emerged as a top issue in this election. The opposition has also said that new HDB flat prices are rising faster than median incomes.
Young couples who are eligible to buy new flats have also complained of long waits for their homes under the BTO scheme, which lets couples book their flats before they are built.
On the long wait for flats, Mr Lee said that this year, the HDB is building a record number of 22,000 new flats under the BTO scheme.
The Greenwich Condominium at Seletar Road
On high prices, he acknowledged that many first-time buyers could not afford private property and did not have enough savings to pay the cash component for a HDB resale flat. Some relied on parents to help out. This was why the Government would look at the income ceiling again.
Last August, the Government raised the income cap for HDB’s Design, Build and Sell Scheme – for the top tier of HDB flats – from $8,000 to $10,000
‘We considered whether to do it for the other HDB flats such as the BTO but we haven’t done it yet because the property market was very hot and we didn’t want to add more pressure on the BTO flat queue or, for that matter, on the resale flat queue,’ he said, explaining that a change in the income ceiling would also affect the eligibility for other HDB loans.
HDB flats at Toa Payoh
Meanwhile, the Reform Party has proposed lowering the qualifying age of Singaporean singles to buy a HDB flat.
Ho Soak Harn, a member of the RP’s West Coast GRC team led by party chief Kenneth Jeyaretnam, said that the party wants to lower the age at which Singaporean singles qualify to buy a HDB flat. This can be done by offering one or two-room ‘starter flats’ which cost less and which singles can ‘pay off in 15 years, not 25 years’, she said.
She also intends to push for more part-time jobs ‘so that Singaporean mothers are given a chance’ to be in the workforce and care for children, by offering more allowances and incentives to employers.
Mr Jeyaretnam also mentioned, without elaborating, policy pledges from RP’s manifesto such as universal health insurance to replace Medisave and Medishield, a minimum wage, reform of the CPF scheme to allow withdrawals at age 55, and reducing National Service first to 18 months and then a year.
As was the case at its last two rallies, the RP candidates repeatedly raised the ‘spirit of democracy’ embodied by late opposition veteran JB Jeyaretnam, who founded RP in 2008.
Source: The Straits Times © Singapore Press Holdings Ltd. Reprinted with permission.
Editor’s Commentary:
There are many more different family types emerging as society evolves. In order to not let these minority groups fall through the cracks, it’s time for a review of Singapore’s housing policies.
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Great site. A lot of useful information here. I’m sending it to some friends!
Income ceiling may be one of the factors but its not the most critical one. By just raising the income ceiling does not help much as our overall household income has not increase accordingly with the growth forecast!!! In actual facts, our income has remained the same for over last 10years!!! Only the civil servants have enjoyed the benefits such as pay increase and very huge bonus given away especially to the ministers!!!
I suggest that the government looks into the possibilities of subsidies for Singapore Citizens ONLY and whom are first timers. If they are to sell away the flat after a few years, they are to refund the amount back to the government. And dont allow PRs to buy brand new flats!!!! Remember your initial objective is to ensure every Singapore Citizens have a place to stay and we call it HOME!!!!!
The way the current policy goes, I dont see our younger generation could afford to buy their own flats!!! They would have to workd for at least 5-8years and manage to save every single cents they earned then they may be albe to consider buying one.
Hope you people hear us and take note of our concern and SOLVE IT!!!!
good post
I totally agreed with ‘Awakening ‘ dated July 5, 2011.The $11,000/- per month as according to him maybe from a self-employed person. I am talking about if this couple work for a MNC. Though they may earn $11,000/- combined income,you must not forget there is the CPF deduction, parents allowances on both side of the family. After the calculation they may only be able to take home roughly around $8000/- or less. Cost of living is high, to buy a resale HDB is already a burden.
Finally I should think all Singaporeans should be given a chance to buy a HDB flat direct from HDB.
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HDB ceiling of $8,000 should not be raised. Families that earn $11,000 a month should be able to afford private housing comfortably. Lower income families already have a hard time trying to buy their HDB flats without this group coming in to join their queue. There’s already a bottleneck in the HDB building program, namely the “Build to order” system. At every BTO exercise, it is 7 to 10 times oversubscribed. Think about those families that earn $1,000 to $2,000.
I total disagree what your comment for those who earn $11000 a month could afford to live in a private housing comfortably. Not every people will bring home $11000 even thought they declare their income tax monthly pay is $11000. Some of them might be self-employ.They declare their company profit is for the whole year and do you think that will they bring home the money is the total what they earn monthly. How about the company that need money to roll. They might only brought 30% of the money home. What if they need to take care of their parents and need to pay extra expenses on them. The income ceiling only base on the total they earn, but never deduct out their expenses. If you said they brought $11000 home after all the deduction, I will agree with you that they are able to afford to buy a private house.