Tag Archives: Housing Development Board

I THANK Mr Jason Zheng (’The issue here is cash over valuation’), Mr Steven Yeo (’Should the HDB build 19,000 flats a year instead?’) and Mr Loo Fook Kay (’What percentage of income will a single Singaporean earning $2,500 a month pay?’) for their views on HDB flats (Sept5).

HDB’s key responsibilities are to help first-time home buyers and to ensure flat values are sustained over the long term.

Mr Zheng raised the issue of cash over valuation. COV is what a buyer agrees to pay the seller when he feels a particular flat is worth more than its valuation. COV applies in the private residential market as well. Banks will grant a loan of only up to 90 per cent of valuation, and buyers will have to pay at least 5 per cent of the valuation and the excess in cash.

HDB cannot ban COV or provide loans for it, as suggested by Mr Zheng. People should be free to decide what their flat or intended purchase is worth to them, and not be forced to buy and sell at fixed prices. While financing for COVs may appear helpful, it is more likely to fuel the escalation of prices and worsen the situation.

Mr Yeo commented on the number of marriages and new flats. The 24,000 marriages last year included those with or among foreigners, re-marriages, those with high income and those who have other accommodation. Not all 24,000 qualify for subsidised flats. In recent years, total bookings of new and resale flats with grants were between 13,000 and 15,000 a year. Continue reading →

I THANK Mr Ng Kok Lim (’Do the criteria reflect reality?’), Mr Hoon Tze Ming (’Home affordability fails to factor in opportunity costs’) and Mr Chew Kim Cheer (’Solve key concern – soaring resale prices’) for their letters last Saturday.

As the public housing authority, HDB has two key responsibilities: to help Singaporean families set up their first home; and to ensure flat values for the 80 per cent of Singaporeans who are home owners are sustained over the long term.

To do this, HDB adopts a two-pronged approach. First, ensuring affordability for first-time home owners; second, calibrating new flat supply to meet demand.

AFFORDABILITY OF NEW FLATS IN NON-MATURE ESTATES

Affordability

THE Government provides generous housing subsidies. HDB flats are thus affordable by any measure. On average, first-time home buyers use only 17 to 29 per cent of household income for their loans, below the international benchmark of 30 per cent.

A first-time couple earning $4,000 a month buying a resale four-room flat at $300,000 will need only 25 per cent of their monthly income. Their Central Provident Fund (CPF) contributions ($920) will cover almost all of the instalment, with only $81 paid in cash. New flats are equally affordable. Continue reading →