Raise Or Not To Raise?

Source : TODAY, Tuesday, January 22, 2008

MPs debate whether to up $8,000 ceiling for DBSS buyers

THEY are public housing flats designed, built and marketed by private developers, costing as much as $700,000 - which begs the question: Should not the $8,000 income ceiling for prospective buyers be raised?


















Taking up the issue of Design, Build and Sell Scheme (DBSS) flats in Parliament yesterday, Nominated Member of Parliament (NMP) Eunice Olsen said: “When the income ceiling of $8,000 was set by the Housing and Development Board (HDB), there was no DBSS and no DBSS prices. Shouldn’t the income ceiling be commensurate with the increase in prices?

“In the event of a downturn, these buyers may not be able to afford their mortgages. As only private housing is not afforded any insulation by the Government from market fluctuations … does this change how we view public housing?”

MP (Marine Parade GRC), Dr Ong Seh Hong, similarly asked about the rationale for “the shift from providing affordable housing” to the $700,000 DBSS flats in Boon Keng, even as the income ceiling remains fixed.

And with prices of new and resale HDB flats rising, fellow Marine Parade MP, Dr Muhammad Faishal Ibrahim, asked about the Government’s plans to ensure home ownership stays affordable for lower income families.

In response to all three, National Development Minister Mah Bow Tan pointed to the need for “a wide range of housing options” to meet varying needs and aspirations “if we want public housing to remain relevant and attractive”.

So, even as the HDB is providing higher-end options such as DBSS, it has also, in recent years, introduced two- and three-room flats targeted at lower-income households.

“The HDB is not shifting its mission; neither is it abandoning its role of directly providing the standard HDB flats,” said Mr Mah.

Indeed, DBSS flats constitute a small part of the total public flat supply, catering for niche HDB buyers “with higher aspirations and who can afford a higher price”.

And as DBSS is for this select group, there are no plans to raise the $8,000 income ceiling. If this were done, richer home-hunters might join the queue, resulting in DBSS flats being “priced higher instead of becoming more affordable”, he argued.

Meanwhile, the Government remains committed to providing affordable public housing for families with more modest means.

Last year, the income ceiling for the Additional CPF Housing Grant was raised from $3,000 to $4,000 and the grant quantum for the various income tiers increased by $10,000.

Since it was introduced in March 2006, the additional grant has benefited more than 4,600 households.

Still, Mr Mah acknowledged, rising resale flat prices are a concern and the HDB is monitoring the situation.

Those who find it too expensive or cannot afford the Cash-Over-Valuation “should seriously consider postponing their purchase or applying for a new HDB flat instead”, he advised, adding: “For many Singaporeans, buying a property is the single most significant investment they make in their lives. It is wise to be careful and patient.”