More help for less well-off to buy bigger flats

SINGAPORE — Low- and middle-income households who wish to purchase a bigger flat will be given more support, in various moves aimed at making Housing and Development Board (HDB) flats even more affordable, especially for the less well-off.

Families who opt for two-room flats and wish to upgrade to a three-room flat later on in life, can qualify for a new Step-Up Housing Grant, which will help them defray some of the upgrading cost.

The Special CPF Housing Grant, which was introduced in 2011, will be extended to those who wish to purchase four-room flats. Currently, it is only open to those who purchase two- or three-room flats. The income ceiling will also be raised so that more middle-income households will be eligible. A middle-income household stands to get subsidies of up to S$20,000 more if they purchase a four-room flat.

Currently, households who earn up to S$5,000 can receive an Additional CPF Housing Grant of up to S$40,000, while households whose income does not exceed S$2,250 can receive a Special CPF Housing Grant of up to S$20,000.

Details of the changes are expected to be made known soon. Announcing these moves during the National Day Rally, Prime Minister Lee Hsien Loong acknowledged Singaporeans’ worries over rising property prices, even though he said the Government has “moved decisively” in the last two years to help more Singaporeans own their homes.

These included building a record number of new flats and de-linking new flat prices from resale market prices, which has stabilised Build-To-Order (BTO) flat prices.

A recent survey conducted by the Institute of Policy Studies as part of the Our Singapore Conversation (OSC) project showed that public housing is the top concern for Singaporeans earning less than S$5,000 a month. The affordability of public housing was also one of the top issues that emerged from the hundreds of OSC sessions held over the past year.

Instead of bringing down the prices of BTO flats, which will hurt all home owners, the Prime Minister said more help will be given to households to own a home.

Mr Lee also gave this assurance: Every Singaporean family who is working will be able to afford a home. This would mean that a family earning S$1,000 per month should be able to afford a two-room HDB flat, while one who earned S$2,000 a month should be able to afford a three-room flat and a family with an income of S$4,000 a month should be able to afford a four-room flat, he added.

“And that is completely possible. When I say afford, I mean use your CPF (Central Provident Fund) mostly and have a 25-year loan, not a 30-year loan, and in your later years, the income can be used to beef up your retirement savings,” he added.

To prove his point that the typical three-and four-room flats at Fernvale Riverwalk are within the reach of home buyers, Mr Lee quipped to his audience that he would be their housing agent, as he broke down the cash outlay needed for each purchase (see graphic). In the case of a three-room flat, a family with a household income of S$2,000 would not have to fork out any cash as his monthly payment would be less than the contributions to the CPF Ordinary Account.

Mr Lee said the Government will monitor housing affordability closely. “This is not the end of the story — we will monitor closely how well people can afford housing in Singapore, and over time, as it becomes necessary, we will do more to help the lower- and middle-income Singaporeans own their homes.

“We will always make sure that an HDB flat is always within reach — affordable and available to Singaporeans. Don’t worry, go ahead, plan on it, get married, get your flat!”