First-time home buyers in Singapore will welcome the call to raise the income ceiling to qualify for new Housing Development Board (HDB) flats. National Development Minister Mah Bow Tan has hinted that the income ceiling for new build-to-order (BTO) flats could be raised to S$10,000 (US$ 8,120) – from the current S$8,000 (US$ 6,500) – after the general election, Today newspaper reported.
The move is welcomed by the so-called sandwiched class, which is not allowed to buy the most affordable housing in Singapore due to their higher income but is also financially strained from having to buy housing at a higher price. Mr. Mohamed Ismail, chief executive of property company PropNex said, “I think the sandwiched class has indicated: ‘Hey, the ceiling at S$8,000 we are neither here nor there’ and especially now … the younger generations are getting married much later.”
Analysts say the higher income ceiling for new flats is not likely to have a significant impact on the overall property market – given that the sandwiched class is only a small part of the property market. But some say the resale HDB market could still be marginally hit. “We’ll probably see some of the buyers who currently buy from the resale market moving to BTO flats because there’s always a preference for new over old. “When you buy a resale flat, you’re buying old flats but at higher prices. Now you can buy new flats at subsidised prices,” key executive officer of ERA Realty Network, Mr Eugene Lim said.
The review of the income ceiling is likely to be conducted after the polls and will be completed within six months, National Development Minister Mr Mah said.
Source : PropertyReport – 9 May 2011