Signs of mid-upper income Singaporeans not being able to afford private housing are emerging.
Many Singaporeans are clamouring for the government to raise the income ceiling so they can buy public housing.
Currently, households with a gross income of more than $10,000 are not eligible to buy new HDB BTO flats. Those earning more than $12,000 cannot buy executive condominiums (ECs).
Lab researcher Tan Si Hui, 30, and her boyfriend have a combined income of $10,500, but they have failed in their past 5 BTO applications. “We don’t want to risk putting money into private property, especially with the rising cost of living in Singapore,” said Ms Tan. She and her boyfriend have no choice but to look for a resale HDB flat instead.
However, resale HDB flats are not cheap either nowadays. The price gap between resale and BTO flats has been growing. According to government data, the price differential in the outside central region was 31% last year, up from 18% in 2004.
Last week, during the Budget debate, some PAP MPs asked National Development Minister Khaw Boon Wan to raise the income ceiling or remove it altogether.
“The income ceiling is too blunt a tool, (it) does not take into consideration the circumstances faced by each family such as the number of dependants,” said MP Hri Kumar Nair.
Mr Khaw disagreed.
“I don’t think we want to lift the income ceiling completely,” he said, noting that HDB flats are “heavily subsidised” and are aimed at those who need help.
Mr Khaw, of course, was talking about “market subsidy”, not “cost subsidy”. Till today, Mr Khaw has refused to reveal the construction cost of an HDB flat.
However, Mr Khaw did hint that the income ceiling could be raised for more Singaporeans to buy HDB BTO flats. But he attributes this to the increase in income level.
“As income level rises, we must be prepared to adjust the income ceiling,” he said, adding that he would mull over the income ceiling issue.
The income ceiling was last raised in 2011, from $8,000 for HDB flats and $10,000 for ECs. Before that, the $8,000 limit had remained unchanged for 17 years.
If Mr Khaw decides to raise the ceiling this year, it would reflect a change in 4 years, compared to the last change in 17 years.
What does this show?
What are the implications of such a change in a relatively short period of time, compared to the previous change over 17 years?