Tag Archives: HDB News

Is $8,000 income ceiling too low?

Posted on 17 Oct 2009 | Comments Off on Is $8,000 income ceiling too low?

CALLS for the Housing Board to revise its $8,000 household income ceiling have been getting louder as resale flat prices soar.

INCOME CEILING NOT RAISED SINCE 1994The most strident cries come from the ’sandwich class’ who earn too much to qualify for public housing benefits but find it hard to enter the red-hot private property market.

For a household earning not more than $8,000 a month, the benefits are significant – it can buy a new subsidised flat from the HDB, or is entitled to a housing grant of up to $40,000 to buy a unit on the resale market. Those with a monthly income of not more than $5,000 enjoy an additional grant on top of that.

With all things being equal, there are grounds to suggest the effect of the $8,000 income ceiling is being diluted by rising income. The ceiling was last revised in 1994. Between 1995 and 2005, the proportion of resident households earning $8,000 and above every month almost doubled. This means the proportion of Singaporeans receiving housing subsidies has dropped. Continue reading →

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Are new HDB flats really subsidised?

Posted on 17 Oct 2009 | Comments Off on Are new HDB flats really subsidised?

THIS question has dogged the Housing Board for decades, and has continued to be a source of contention among opposition politicians, Straits Times Forum writers and cyber-critics.

Their main argument is that the HDB’s ‘market subsidy’ system for pricing new flats does not give buyers a real subsidy.

Unlike a typical subsidy in which a discount is given off the cost of a product, the board works the other way around. First, the HDB determines the new flat’s market price by taking into account resale prices of similar flats. Then it gives a ‘discount’ based on this market value.

The main issue is the cost of land. The cost of a flat is mostly made up of the cost of land and construction. In land-scarce Singapore, land cost makes up a major part of a property’s price.

So the questions that arise are: If prime land is acquired cheaply by the state, should prices of flats built on it reflect the cost of acquiring the land or the market value of the land? Who should reap the benefits of capital appreciation when land that was acquired cheaply 10 years ago is now highly coveted? Continue reading →

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