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1,500 families gain from raised HDB income caps

1,500 families gain from raised HDB income caps.

More than 1,500 households benefited from adjustments in housing policy last year that allowed them to buy new subsidised flats, or resale flats using grants, the Housing Board said yesterday. These were households that could not buy new or resale flats before, as their earnings exceeded the previous income ceiling of $10,000 for families and $5,000 for singles.

HDB raised the ceiling to $12,000 for families and $6,000 for singles in August last year to adjust for rising incomes, which allowed higher-income households to buy public flats. In the year that followed, up to August this year, some 1,565 households were able to buy resale flats with CPF Housing Grants, or new flats, because of the changes. Of these, 565 households booked new flats and 1,000 households bought resale flats with the grants.

HDB said another 1,047 families booked executive condominiums (ECs) with tiered CPF Housing Grants who could not do so before; the ceiling for ECs was also raised last year, from $12,000 to $14,000.

The last time the income ceilings were raised was in 2011, when each limit went up by $2,000. The changes were announced by Prime Minister Lee Hsien Loong at the National Day Rally last year so more Singaporeans could become eligible for new flats and ECs. The number who benefited was sizeable considering that there were 11,833 new flats booked and 6,464 resale flats sold during the period.

That means around 5 per cent of new HDB bookings and 15 per cent of resale flat purchases could not have been made before the income ceiling revisions. The numbers are not small and represent a significant number of new bookings. As such, the policy changes made an impact by providing this segment of buyers with more options. However, some felt that the revisions had hurt the private property market as these are 1,500 HDB buyers and 1,000 EC buyers who could have bought private properties as they are (relatively) high-earning families.

As more households became eligible for subsidised public housing, taxpayers would also end up bearing a heavier burden. Nonetheless, most Singaporeans live in HDB flats, so if incomes continue to rise, the authorities should continue to adjust the ceilings accordingly.

Adapted from: The Straits Times, 9 December 2016