According to the Housing Development Board (HDB), some 5,100 households have benefited from the income ceiling tweaks that occurred almost a year ago, as the new criteria opened up the opportunity for these households to apply for various build-to-order (BTO) flats.


(Amidst encouraging results from the raising of BTO applicant income ceilings, some analysts say a biennial review of income limits could be useful. Image courtesy of Thinkstock.)

Last March, HDB raised the monthly household income ceiling—the maximum monthly income an applicant’s household should have to qualify for a BTO unit—from $3,000 to $5,000 for three-room flats in non-mature estates. It explained that the move would allow more affordable housing options for low- to middle-income households applying for BTO flats for the first time.

This was followed by raising the 17-year old monthly household income ceiling of $8,000 for four-room or larger flats, as well as three-room units in mature estates, to $10,000.

These actions have been widely suspected to be corrective actions taken by the ruling People’s Action Party to win back its vast share of voters. In his 2011 National Day Rally speech, Prime Minister Lee Hsien Loong explained that the measures were meant to “bring more people into the HDB net”, in a time when rising income levels encouraged residents to look to private housing.

HDB revealed that of the 5,100 applicants, about 3,500 are households with monthly incomes of between $8,000 and $10,000. The other 1,600 applicants are households earning between $3,000 and $5,000 monthly.

The success rates of these 5,100 applicants are still not known as The Straits Times reported that the HDB is still assessing the applicants’ eligibility.

Meanwhile, analysts The Straits Times spoke to remain pleased with these policy changes. Spokesperson for Dennis Wee Realty Lee Sze Teck said the ‘5,100’ figure proves that many still prefer new HDB homes over other housing choices. “In particular, there are many people who want to enjoy the cheaper HDB flats, but because of their higher income, are forced into the resale market, or even private property,” he said.

This seems to be the case for accounts assistant Suah Wei Ling, who had initially applied for a four-room unit in Bukit Panjang in February last year with her boyfriend. The couple changed their minds when the income limits for three-room flats in non-mature estates changed just a month after.

Said Suah to The Straits Times, “We were very lucky to have applied at the right time and qualified for a smaller unit as we did not need such a big flat anyway.”

“This shows that the raising of the income ceiling was a move long overdue as the low ceiling meant people would look to the resale market,” said SLP International head of research Nicholas Mak to The Straits Times.

Resale flats are priced at $380-$550 per sq ft (psf). Larger BTOs cost $250-$350 psf. Executive condominiums have a much heftier price tag of $700-750 psf.

Added Mak, “Given the increasing income levels of many Singaporeans, the ceiling should perhaps be reviewed every two years or so.”

He noted that it was not likely for the revised income ceilings to cause a sharp demand spike for BTO flats, explaining that “many of those who would have opted for public housing would have already applied, while the rest are probably waiting for property prices to come down before going in” over the past year.

In fact as first-timer application rates stabilise, demand for housing seems to be on the decline, even as HDB continuously increases its strength of BTO flats. Some 25,000 BTO homes will be released this year, following last year’s record 28,000.
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Related Categories: HDB and Public Housing, HDB

Tags: BTO, Build-To-Order, HDB, HDB flats, HDB Price index, Housing Development Board, Income Ceiling, Khaw Boon Wan, Ministry of National Development, public housing prices in Singapore, Singapore public housing market

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