Everyone, regardless of income ceiling, should own HDB flat, believes the Prime Minister’s wife.
Prime Minister Lee Hsien Loong’s wife, Ho Ching, has said that everyone should own and live in a Housing Development Board (HDB) flat. Mdm Ho, who also serves as CEO of Singapore sovereign wealth fund Temasek, made these remarks in response to a recent National University of Singapore (NUS) study on ‘housing wealth’.
The NUS study showed that while Singapore’s housing policies help children from lower-income families upgrade to more expensive homes when they are older, the same does not necessarily apply to children from middle-income families.
The study, that was published on 6 Oct, found that children from middle-income families tend to end up worse off than their parents, with over 50 per cent of these children who grew up in private properties having to downgrade to public housing when they are older.
Noting that children from middle-class families were facing downward mobility and that there is little room for these children to surpass their parents, the researchers said that it is difficult for the sandwiched group to move up the social ladder because of the “high price and also the lack of government subsidies” for private housing.
Everyone should own HDB flat regardless of income ceiling
Responding to the findings of the study, Mdm Ho vouched for public housing and called on people to make a “smarter wealth choice” and opt to live in HDB housing.
Everyone should own HDB flat
She wrote: “Errr…80% of housing is HDB. These come with various subsidies for first timers, for staying closer to parents, with excellent amenities minus the cost of maintaining private swimming pools. So families in the 60-80% income bracket may be making the smarter wealth choice going for HDB housing.”
Calling on policymakers to consider removing the income ceiling for first-time HDB buyers, she added: “Over time, we should perhaps remove the income ceiling for buying HDB flats for 1st time property buyers/owners.”
Calling the ownership of public housing a beneficial opportunity and one that everyone should be able to take advantage of, Mdm Ho suggested: “Now that we have stabilised the HDB housing supply, we can perhaps add a premium to the posted HDB price for new builds, based on some % of the income above the current ceiling.
“That way, everybody who doesn’t already own a property can benefit from the opportunity to own and live in HDB regardless of income levels.”
Income ceiling lowered to own HDB Flat
Minister for National Development Lawrence Wong on Sep 10, announced various housing policy measures to make public housing more affordable and accessible for Singaporeans. The housing policy measures will help more Singaporeans from lower to upper-middle income households buy their first homes and start a family. The Ministry of National Development (MND) and the Housing & Development Board (HDB) will enhance housing grants and raise the income ceilings for flat buyers.
To provide more citizen households with access to affordable housing options, the monthly household income ceiling will be increased from $12,000 to $14,000 for eligible families to:
Buy a flat from HDB;
Buy a resale flat on the open market with a CPF Housing Grant; and
Get an HDB housing loan for the purchase of a new or resale flat.
The monthly household income ceiling for eligible first-timer singles aged 35 and above will also be raised from $6,000 to $7,000. MND and HDB will also raise the monthly household income ceiling from $14,000 to $16,000 for citizen households to buy an Executive Condominium (EC) unit from property developer. There is no change in income ceiling for CPF Housing Grant for ECs.
Enhanced Housing Grant introduced to make it easier to own HDB Flat easier
MND and HDB also introduced a new Enhanced CPF Housing Grant (EHG) to replace the existing AHG and SHG. To benefit more first-timer home seekers, the EHG will be made available to eligible buyers, regardless of whether they purchase a new or resale flat. To be eligible for the EHG, the monthly household income has to be $9,000 or less. The flat applicant, or spouse/fiancé(e) must also be in continuous employment for at least 12 months before the flat application, and remain working at the point of flat application. There are also no restrictions on flat buyers’ choice of flat type and location – unlike the SHG, which is restricted to purchases of 4-room or smaller new flats in non-mature estates.
Eligible first-timer families will be able to enjoy an EHG of up to $80,000 when they buy a flat that can cover them and their spouses to the age of 95. The pro-ration of the EHG takes reference from the pro-ration used for CPF usage and HDB housing loan financing, as announced in May 2019. With the new EHG, eligible first-timer families buying a resale flat may now enjoy up to $160,000 of housing grants, comprising an EHG of up to $80,000, a CPF Housing Grant of up to $50,000, and a Proximity Housing Grant of up to $30,000.
As the practice today, should their total grant amount exceed 95% of the flat price, they will need to pay 5% of the flat price using their CPF or cash savings; the remaining sum will be fully covered by the grant. Any excess grant amount will go into their CPF Special/Retirement Account and Medisave Account in equal portions. If there is a valuation, the housing grants will be used to pay up to 95% of the lower of the flat price or the valuation. The remaining sum will have to be paid using the buyers’ own CPF and/or cash savings.
This is to ensure that all Singaporeans will be able to live comfortably in a home that can last them for life. Eligible families who buy a flat that does not meet this condition will still benefit from the EHG, but the amount will be pro-rated based on the extent that the remaining lease can cover them to the age of 95. Eligible first-timer singles aged 35 and above, and earning not more than $4,500 a month, can also enjoy an EHG (singles) of up to $40,000, and are subject to the same conditions.
The housing policy measures of EHG and the revised income ceilings will be implemented from 11 September 2019. To meet the anticipated additional demand for public housing arising from these changes, HDB will likely have to increase the BTO supply in 2020.
The post Everyone should own HDB flat believes PM’s wife Ho Ching appeared first on iCompareLoan Resources.