SINGAPORE: The increases in income ceilings for households buying new Housing and Development Board (HDB) flats and Executive Condominiums (ECs), and the Proximity Housing Grant will drive more buyers to the public-housing market and hit the private residential sector, said analysts on Sunday (Aug 23).
In his National Day Rally speech, Prime Minister Lee Hsien Loong announced the raising of the income ceilings for new HDB flats and ECs by S$2,000 each, to S$12,000 and S$14,000 respectively — the first increase since August 2011.
“This ceiling change probably enlarges the choices for homeowners. Some demand from the private market may be drawn away to the public housing market. The impact seen would most likely be on mass-market condominiums,” said Mr Eugene Lim, key executive officer at property agency ERA.
Associate Professor Sing Tien Foo from the Department of Real Estate at the National University of Singapore said: “It is a good move as it would allow more people to buy an HDB flat. The scheme would now cover up to 90 per cent of the population. There is a lot of pent-up demand and the sandwiched class in between the pricing tier is the group that will benefit the most from the price revisions.
“Mass-market condominium developers may need to evaluate their pricing strategies as their properties are closest in comparison to ECs,” he added.
PROXIMITY HOUSING SCHEME
To help couples live closer to their parents, the Government will introduce a Proximity Housing Grant for all Singaporeans, Mr Lee announced on Sunday. The grant will be given to those who buy a resale flat with or near their parents, or to parents who buy a resale flat near their married children.
“Due to the grant, we may actually see an increase in demand for resale flats in the coming weeks,” said Mr Nicholas Mak, executive director of research and consultancy at property firm SLP International.
“This is beneficial for families as a lot of children want to live near their parents. It solves a practical issue as parents are usually in the older estates, while their children live in newer estates,” said Mr Lim.
“With this proximity housing scheme giving (couples) more grants so they can buy resale flats nearer their parents, I think it will be helpful in solving practical problems residents face,” said Nee Soon GRC MP Lee Bee Wah, who chairs the Government Parliamentary Committee for National Development and Environment.
Mr Lee also said the Special CPF Housing Grant (SHG) would be extended to cover more households, by raising the income ceiling to S$8,500 from S$6,500. The maximum grant amount of S$20,000 will also be doubled to S$40,000.
“The SHG is largely meant to help people own a flat. The grant will most likely benefit first-time owners buying Build-to-Order flats the most,” said Mr Lim.
HELPING LOW-INCOME FAMILIES
The Fresh Start Housing Scheme announced by Mr Lee is aimed at helping former homeowners, who are currently living in rental flats, own a two-room unit. These flats will come with shorter leases and stricter resale conditions so they will be more affordable.
Moulmein-Kallang GRC Member of Parliament, Ms Denise Phua, who chairs the Government Parliamentary Committee for Social and Family Development, said the scheme is part of a broad approach to help these low-income households.
“For those at risk of being left behind, housing is not one of the key issues. Housing is one of the outcomes of several things. They could be born disadvantaged. They could be disadvantaged due to circumstances,” said Ms Phua.
“If you really want to help people out of the poverty spiral, then I think it’s important to look at things holistically, not just in terms of material, physical or economic items,” she said.
The education and social-services sectors have to play their part, while the community needs to come in to provide all-rounded support, she add