Extra Help For Needy To Buy HDB Flats

Source : The Straits Times, Aug 5, 2007

LOWER-INCOME families buying their first Housing Board (HDB) flat are to receive more help from the Government.
The move is to ensure that HDB flats remain affordable for them amid rising property prices.

What they will receive is still being worked out, said National Development Minister Mah Bow Tan yesterday.

At the same time, the Government is looking into offering older Singaporeans more options to unlock the value of their HDB flats so that they can have cash in hand to live comfortably in retirement.

Mr Mah did not give details of these plans in his speech at a National Day dinner in Tampines last night, but later told reporters that they should be ready before the end of the year.

He also told reporters that in deciding the extra help for needy first- time flat buyers, factors such as family income and ability to repay the loan will be taken into account.

Early last year, the Additional CPF Housing Grant was introduced for families with a monthly income of up to $3,000. They can get up to $20,000 in extra subsidy.

'HDB is currently looking into improving the Additional CPF Housing Grant to see if it can offer more assistance to more households,' said Mr Mah.

The need to tweak it is because HDB flats are now costlier as a result of the economic upswing.

Prices have risen by 4.2 per cent in the first half of this year.

'Even as home prices go up, it's important for us to keep public housing affordable to as many Singaporeans as possible, especially to the low income.

'So I think we need to look at how grants and subsidies can be tweaked,' said the minister.

Hairstylist Peter Soh, 26, hopes to buy a flat with his jobless mother.

'Every little help from the Government counts,' said Mr Soh, who earns about $1,500 a month.

With the economy projected to rise by 5 to 7 per cent this year, Mr Mah sees the value of HDB homes continuing to rise.

On average, more than 800,000 HDB home owners have seen their property appreciate by over 6 per cent in the last 18 months, he noted.

It affirms the point that HDB flats are a good long-term investment, said Mr Mah, adding that they also have given Singaporeans a stake in the country's progress.

For the elderly, Mr Mah said they now have a few ways to monetise their flats to supplement their retirement expenses.

They are: sell and move to a smaller home, rent out the flat and move in with a family member, or do a reverse mortgage by pledging the property for a sum of money.

Noting that reverse mortgage has not taken off, Mr Mah said: 'We will have to study why it is not popular.

'Going forward, we can and will do more to put in place more options,' he added.