http://www.straitstimes.com/PrimeNew...ry_664433.html
May 4, 2011
GE 2011
Review of HDB income ceiling in 6 months: Mah
Ceiling for first-timers buying new flats could be raised to $10,000
By Jessica Cheam, Housing Correspondent
THE income ceiling for buying new HDB flats - unchanged for the past 17 years for first-timers - is set to be reviewed in the next six months, said National Development Minister Mah Bow Tan.
He said the ceiling could be raised from the current $8,000 to $10,000, though the actual level will be decided after the study.
If the ceiling is raised, it will be a stunning turnaround by Singapore's policymakers, who, as recently as March, defended the ceiling as still relevant.
Mr Mah himself had said in Parliament that four in five households still qualify for public housing with the ceiling at $8,000.
'Our budget is not limitless. Our subsidies are targeted to offer more help for the lower-income group,' he said then.
His announcement of the timeframe for the review, made on the sidelines of his walkabout in Tampines Street 23 yesterday, follows a hint dropped by Prime Minister Lee Hsien Loong on Monday that couples in the middle-income group could get some relief from the Government's review of the income ceiling.
A couple's combined income now has to be below $8,000 a month for them to qualify to buy a new flat directly from the Housing Board, which is typically 20 to 30 per cent cheaper than a market-rate resale flat.
Those who go for resale flats from the open market receive a housing grant of up to $40,000 if their joint monthly income is below $8,000. It is unclear whether the review will also look at the income ceiling for this housing grant.
Calls have been getting louder for the ceiling to be raised, as couples bust the ceiling soon after joining the workforce and become barred from buying flats from the HDB or getting the grant.
At the same time, they say they are unable to afford resale flats or private property, prices of which have been on a bull run in recent years.
Mr Mah, who is leading the People's Action Party team's bid for re-election in Tampines GRC, yesterday acknowledged that the recent National Wages Council's recommendation for a rise in wages in tandem with economic conditions and a tight labour market means that the 'urgency... to look at the ceiling is there'.
The minister said he has received 'a lot of feedback' on this from residents through block visits, e-mail and other ministers.
The message from the middle class is 'Don't forget about us. The Government has done a lot for the low-income ... compared with the middle class', he said.
So it is important for the Government to assure this group - also called the sandwich class, who have to look after their children and their parents - that they are taken care of, he added.
Mr Mah said that when the Government raised the income ceiling for the top-tier flats under HDB's Design, Build and Sell Scheme from $8,000 to $10,000, it held back on raising that for new build-to-order flats because the market was still very hot then.
'If we raise the income ceiling, more people will join the queue. So we decided to wait for a while, until the queue gets shorter, and more and more flats are rolled out,' he said.
Market analysts that The Straits Times spoke to expressed surprise at the timing of the review, but agreed that it has been a long time coming.
Property agency PropNex chief executive Mohamed Ismail said: 'Many in the industry have said it's worth considering, as we have to factor in the increase in current prices and inflation.'
Dr Yu Shi Ming, who heads the National University of Singapore's department of real estate, noted that Singaporeans are now getting married later, so they are likely to bust the income ceiling by the time they settle down.
It is 'natural' that this policy is reviewed, and it could also take the pressure off the HDB resale-flat market and stabilise prices, he said.
Aspiring first-time flat buyer Koh Wan Ping, 27, said the review is good news, but will not influence how she casts her vote in Pasir Ris-Punggol GRC.
Mr Jeffrey Chua, 30, is less sanguine. Having balloted for a flat - unsuccessfully - twice, he is expecting the income ceiling revision to put more people in the queue.
'It may be harder for me to get that dream flat then. We'll have to wait and see,' he said.
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