Housing Grants, Higher Income Ceiling for Flat Buyers Expected to be Covered during NDR 2015

SINGAPORE: Market watchers told Channel NewsAsia a higher income ceiling for buyers of new flats and executive condominiums is expected to be announced to allow more Singaporeans to qualify for public housing. Executive condo in the market includes The Terrace EC, Brownstone EC and upcoming Signature At Yishun EC. National Development Minister Khaw Boon Wan had said in a radio interview in June that changes are likely to be made known in August.

Housing, education, families and babies are among the topics that will be covered in this year’s National Day Rally on Sunday (Aug 23) Prime Minister Lee Hsien Loong revealed in a video posted to Facebook and YouTube on Friday.

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Already, the Government has released a series of videos online and on television, highlighting its commitment to keep HDB flats affordable.

Currently, households earning a gross income of more than S$10,000 cannot apply for new HDB flats, while those earning more than S$12,000 cannot buy ECs.

Member of Parliament for Nee Soon GRC Lee Bee Wah said: “I think many of them want to buy flats near their parents. Now that the resale market has softened, buying from the open market could be another option. So, perhaps more grants can be given to them so that they can buy flats near to their parents.”

PropNex Realty CEO Ismail Gafoor said: “The sandwiched class – people who are earning above S$3,000 and even up to S$6,000 to S$7,000 – are finding it difficult to tide themselves over to buy a resale flat or to upgrade.” He said measures could be unveiled to ease the burden of this group by increasing housing grants.

First-timer applicants with a household income not exceeding S$10,000 can receive grants of up to S$30,000 when they purchase a resale flat. If the flat is located near their parents’ home, applicants get an additional S$10,000.

National Development Minister Khaw Boon Wan had said in June that his ministry is studying more ways to help families live closer together, including helping those who wish to buy resale flats near their parents.

Some market-watchers also said it may be timely to focus on the second-timer applicants, now that housing demand from first-timers has been largely met. More than 100,000 new BTO flats have been launched since 2011. Currently, up to 85 per cent are reserved for first-time applicants.

Said Mr Ismail: “The key priority of the Government is always to give people the opportunity to own flats. But, it will not stop the Government to expand the number of quotas to be allotted to the second-timers, now knowing that the demand by the first-timers has dwindled. Today, when you look at the subscription for every BTO, it is less than two, or two to 2.5 in some of the estates.”

Ms Lee said: “I also realised that quite a number of my younger residents bought their flats in another town when they got married. Now that they have children, they have to shuttle (between their parents’ homes and theirs) to bring their children to their parents’ homes and after work every day.

“They come to their parents’ place to bring their children home. Some of them, because of their aged parents whom they have to care for, they realise that it’s much more convenient to stay near their parents. So, I hope MND can help them there.”

“If they can be given more grants, it will always be good. But, I think many of them are looking at shifting back before the minimum 5-year occupation period,” she added.

Another area that could be brought up during the Rally is to have more interim rental housing for families and young couples who are waiting for their new flats to be completed, analysts said, as the HDB has ramped up its BTO exercises in the last few years.