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Tag: income ceiling

  • Housing Moves To Benefit HDB Sector, Hit Private Market

    Housing Moves To Benefit HDB Sector, Hit Private Market

    The increases in income ceilings for households buying new Housing and Development Board (HDB) flats and Executive Condominiums (ECs), and the Proximity Housing Grant will drive more buyers to the public-housing market and hit the private residential sector, said analysts on Sunday (Aug 23).

    In his National Day Rally speech, Prime Minister Lee Hsien Loong announced the raising of the income ceilings for new HDB flats and ECs by S$2,000 each, to S$12,000 and S$14,000 respectively — the first increase since August 2011.

    “This ceiling change probably enlarges the choices for homeowners. Some demand from the private market may be drawn away to the public housing market. The impact seen would most likely be on mass-market condominiums,” said Mr Eugene Lim, key executive officer at property agency ERA.

    Associate Professor Sing Tien Foo from the Department of Real Estate at the National University of Singapore said: “It is a good move as it would allow more people to buy an HDB flat. The scheme would now cover up to 90 per cent of the population. There is a lot of pent-up demand and the sandwiched class in between the pricing tier is the group that will benefit the most from the price revisions.

    “Mass-market condominium developers may need to evaluate their pricing strategies as their properties are closest in comparison to ECs,” he added.

    PROXIMITY HOUSING SCHEME

    To help couples live closer to their parents, the Government will introduce a Proximity Housing Grant for all Singaporeans, Mr Lee announced on Sunday. The grant will be given to those who buy a resale flat with or near their parents, or to parents who buy a resale flat near their married children.

    “Due to the grant, we may actually see an increase in demand for resale flats in the coming weeks,” said Mr Nicholas Mak, executive director of research and consultancy at property firm SLP International.

    “This is beneficial for families as a lot of children want to live near their parents. It solves a practical issue as parents are usually in the older estates, while their children live in newer estates,” said Mr Lim.

    “With this proximity housing scheme giving (couples) more grants so they can buy resale flats nearer their parents, I think it will be helpful in solving practical problems residents face,” said Nee Soon GRC MP Lee Bee Wah, who chairs the Government Parliamentary Committee for National Development and Environment.

    Mr Lee also said the Special CPF Housing Grant (SHG) would be extended to cover more households, by raising the income ceiling to S$8,500 from S$6,500. The maximum grant amount of S$20,000 will also be doubled to S$40,000.

    “The SHG is largely meant to help people own a flat. The grant will most likely benefit first-time owners buying Build-to-Order flats the most,” said Mr Lim.

    HELPING LOW-INCOME FAMILIES

    The Fresh Start Housing Scheme announced by Mr Lee is aimed at helping former homeowners, who are currently living in rental flats, own a two-room unit. These flats will come with shorter leases and stricter resale conditions so they will be more affordable.

    Moulmein-Kallang GRC Member of Parliament, Ms Denise Phua, who chairs the Government Parliamentary Committee for Social and Family Development, said the scheme is part of a broad approach to help these low-income households.

    “For those at risk of being left behind, housing is not one of the key issues. Housing is one of the outcomes of several things. They could be born disadvantaged. They could be disadvantaged due to circumstances,” said Ms Phua.

    “If you really want to help people out of the poverty spiral, then I think it’s important to look at things holistically, not just in terms of material, physical or economic items,” she said.

    The education and social-services sectors have to play their part, while the community needs to come in to provide all-rounded support, she added.

     

    Source: www.channelnewsasia.com

  • Analysts: Higher Income Ceiling Will Have Minimal Impact On Property Market

    Analysts: Higher Income Ceiling Will Have Minimal Impact On Property Market

    A higher income ceiling for Build-to-Order (BTO) flats and executive condominiums (ECs) is likely to have minimal impact on the HDB resale and private property market, according to market watchers.

    National Development Minister Khaw Boon Wan had said in a radio interview on Tuesday (Jun 23) that changes to the income ceiling are likely to be made known in August. The income ceiling was last raised in 2011 by S$2,000 for both types of housing.

    Market watchers Channel NewsAsia spoke to said they expect the income ceiling for BTO flats and ECs to be raised by a similar amount later this year.

    The Government’s plans to increase the income ceiling for the purchase of BTO flats and ECs will divert some demand from the HDB resale and private property markets. Currently, households earning a gross income of more than S$10,000 cannot apply for new HDB flats, while those earning more than S$12,000 cannot buy ECs.

    However, market watchers said the impact is likely to be minimal, as HDB resale flats and private homes have their merits. Compared to BTO flats, there is a shorter waiting time for HDB resale homes which are mostly located in mature estates.

    One of the largest property firms in Singapore has described the move as timely, as more Singaporeans are settling down much later, and may be earning above the current limit when they apply for a BTO flat.

    The demand for new HDB flats has also cooled off compared to three years ago, said PropNex Realty’s CEO Ismail Gafoor. “Three years ago, the subscription rate was about four to five times and there was a long pent-up demand.”

    He added: “Today, the subscription rate is about 1.5 to two, which means most of the demand has been absorbed, and with this greater supply, opening up to a higher increment of the income ceiling is the right thing to do.”

    However, another analyst is surprised at the plans to raise the income ceiling, especially at a time where prices of HDB resale flats and private homes are falling.

    Colliers International’s director of research and advisory, Chia Siew Chuin, said: “We would expect the Government to raise the income ceiling over time to keep up with wages. However, perhaps certain conditions must exist first to justify the raising of the income ceiling.”

    “But as of now, I would say that the market is relatively more stable compared to before, and in fact prices are slowly, gradually moderating,” Ms Chia added.

    Speaking to reporters on Tuesday, Mr Khaw had said that he has received “some” requests from Singaporeans who exceeded the income limit, to apply for new HDB flats. Analysts added that public housing, as they are subsidised by the Government, should be reserved for those who really need it.

    As for the two-room Flexi scheme – a result of combining the studio apartment and two-room flat schemes – Mr Ismail said the plan signals a move towards more customisation for home buyers in Singapore, in which it is flexible and caters to needs of individuals based on their age and how much they want to pay for each unit.

     

    Source: www.channelnewsasia.com

  • Lee Bee Wah: Raise Qualifying Income Ceiling For Homebuyers

    Lee Bee Wah: Raise Qualifying Income Ceiling For Homebuyers

    Chairman of the Government Parliamentary Committee for National Development, Lee Bee Wah, has called for the qualifying income ceiling to be raised to allow more people to buy executive condominiums (ECs) and new Housing and Development Board (HDB) flats.

    Speaking ahead of the Budget statement on Monday (Feb 23), she said more middle-income couples are feeling the squeeze.

    The last time HDB raised the qualifying income ceiling for homebuyers was in 2011. Then, the monthly income ceiling for those buying a Build-To-Order (BTO) flat was raised from S$8,000 to S$10,000, while the limit for those buying ECs went up from S$10,000 to S$12,000.

    But amid rising incomes, there have been calls for this ceiling to be lifted further, by S$2,000-$3,000.

    Ms Lee said: “Nowadays, people get married later and there are also more graduates. They get married later; by the time they apply for flats, their salary would have exceeded the ceiling. I think it is good to let Singaporeans have a chance to own HDB flats and stay in HDB flats to have that unique living experience.

    “If they hit the ceiling, they are forced to buy private housing and some of them really feel the squeeze, especially if they need to support their parents and grandparents.”

    Ms Lee has also called for more to be done to help divorcees with children and low-income families own a flat. She also said the Government could look at allocating more BTO flats to singles. Currently, about a third of two-room flats in non-mature estates are set aside for them.

    Said Ms Lee: “Due to pent-up demand, there is still quite a big number of applicants for every batch of flats that is for sale for singles. I also get feedback because they need to wait and so perhaps we can increase the quota, because the demand from first-timers has eased.”

    PROPERTY COOLING MEASURES

    Property cooling measures are another issue on the minds of many. While National Development Minister Khaw Boon Wan has said some of these measures are temporary, the market has to be cool enough for them to be relaxed.

    However, industry experts have said this is unlikely to happen soon. They notes while prices have come down, they have not fallen drastically. Last year, overall prices of HDB resale flats fell by six per cent, while those of private homes fell by four per cent.

    Analysts added that other factors should also be taken into account.

    Associate Professor Lim Lan Yuan, from the Department of Real Estate at the National University of Singapore, elaborated: “The Government should really monitor the market situation. First, (they should) look at the number of property transactions, whether there is an indication there is a fall in the volume. They should also look at the prices, whether there is a drastic fall in the prices.

    “On the other hand, they should also look at the number of mortgagee sales – it may have gone up, indicating that there is some problem with some of the owners who have bought high. They would of course look at the economy. Not only the local, also the external and global economy. So when the situation is not really that conducive, that may be a time they should consider relaxing some of the measures.”

    However, Assoc Prof said the cooling measures, if relaxed, should be done in phases. He added that the Seller’s Stamp Duty could be one of the first to be removed. He said: “The Seller’s Stamp Duty is different, the impact is to really curb speculative activities.

    “Speculative activities take place in a rising market, but right now, we are seeing a fall in the market and there is really very little speculative activities. So the Seller’s stamp Duty has less impact, so if you want to remove, then we could remove that first. ”

    One analyst said the impact on the real estate industry should also be considered. Mr Colin Tan, director of research and consultancy at Suntec Real Estate Consultants, said: “I suppose you have to assess the market … whether it has cooled. To all intents and purposes, some people will say the market has turned cold because if you look at some of the transactions, they are very low.

    “So agents are not having enough income, the bankers, the valuers are not having enough work. In that sense, maybe something needs to be done. The market to these people may have been frozen.”

    So Mr Tan said the Government could look into helping those who want to upgrade. He said: “What we could do is probably look at maybe helping the genuine upgraders because in any normal year, there will be a fair amount of upgrading. But the measures, while hampering speculators, are also having the same impact on genuine upgraders.

    “So maybe we could look at some of the measures and tweak them, and say ‘if you are a genuine upgrader, we would maybe not impose the stamp duty up front, we give you six months, or we grant you the full mortgage loan as if it were your first property, because you are going to sell your current property’. These are some measures that will allow upgrading to work its way back into the market.”

    Providing greater assurance for the elderly is also a theme in this year’s Budget, and Members of Parliament and experts add more could be done to educate seniors on the existing options to help them monetise their flats.

     

    Source: www.channelnewsasia.com