Lower-Income Families Get More Help To Buy Flats

Source : The Straits Times, 20 Aug 2007

LOWER-INCOME families will now find it easier to buy a Housing Board flat, thanks to a bigger housing subsidy and a more generous income ceiling for the subsidy’s applicants.

The Additional CPF Housing Grant, which is given to low-income families, will be increased to a maximum of $30,000 from $20,000 presently.

And the monthly household income ceiling for the grant will also be raised to $4,000 from $3,000 - allowing more than half of Singapore’s households to qualify.

These moves are to allow more people to own a flat and share in the success of Singapore through rising home values, said Prime Minister Lee Hsien Loong in his National Day Rally speech yesterday.

‘Look at the three-room flats today. If you had bought a three-room flat in the early 1970s, it would have cost you maybe $8,000.

‘Today, a three-room flat is worth $160,000, in some places more,’ he said.

‘It’s been a fabulous investment, you’ve had a house to live in, you’ve got a nest-egg which will see you through your retirement.

‘If you take care of it well, you have through this HDB home ownership… participated in the growth of Singapore, bought shares in Singapore, backed this ‘Singapore Inc’ and made it succeed.’

At $30,000, the new maximum value of the Additional CPF Housing Grant effectively means that the Government is subsidising about a quarter of the cost of a three-room flat, PM Lee said.

‘A three-room flat new from HDB today will cost you about $120,000, so $30,000 of that is a lot of money.’

Currently, only families which earn $3,000 a month or less can take advantage of the grant.

Its extension to households with a monthly income of up to $4,000 means that it will now cover about half of all households in Singapore.

Hopeful flat buyer Derek Bay, 36, cheered the news yesterday.

‘A three-room flat in Bukit Merah is roughly $200,000, so a subsidy of $30,000 definitely will help me a lot,’ said the sales co-ordinator, who is now living with his parents.

Mr Eugene Lim, assistant vice-president of property agency ERA Singapore, said the move will be ‘instrumental in driving up demand for new flats’.