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Khaw Boon Wan may revise BTO income ceiling
By Mustafa Shafawi | Posted: 16 June 2011 1246 hrs
SINGAPORE: National Development Minister Khaw Boon Wan said the rising age of first time Build-to-Order (BTO) applicants justifies revising the HDB income ceiling.
Writing in his blog, Mr Khaw said first-time applicants who applied under HDB's Fiancé-Fiancée Scheme for BTO projects launched in May had a median age of 27.
And other first-timers - such as those already married - had a median age of 34.
The income ceiling was last revised in 1994. Since then, wages have been on a steady rise.
According to 2010 figures from the Manpower Ministry, a degree holder in the 30 to 39 age group earns a median salary of S$5,200.
Men (S$5,480) earn more than women (S$4,880). As such, a couple in their 30s is likely to bust the S$8,000 ceiling.
Market watchers say a review is overdue but added that any rise in the income ceiling for BTO flats should be accompanied by similar increases for those sold under Design, Build and Sell Scheme (DBSS) and Executive Condominiums (EC).
DBSS flats and ECs are developed and sold by private developers, but are governed by HDB rules. They provide more housing choices for home buyers who do not want to buy private property.
Nicholas Mak, Executive Director of Research and Consultancy at SLP International, said: "The demand for BTO flats will increase at the expense of demand for ECs and DBSS flats. And this will unfairly penalise certain developers who have already bought the sites for DBSS and ECs from the government. These developers will suddenly find that their pool of buyers will decrease and they are unable to meet their target projections."
PropNex CEO, Mohd Ismail, agreed that the income ceiling for DBSS flats and ECs should also be increased. He said this will enable more people to own a home, but not at private property prices.
News of a possible higher income ceiling was welcomed by some first-time home buyers - who have been unsuccessful in four attempts to get a BTO flat.
First-time home buyer Seah Kheng Wee, said: "Will be good if he (Khaw) can raise the BTO ceiling cap. Because I would be hitting the ceiling cap pretty soon. So if the ceiling is raised, for me, of course it would be advantageous."
In May, former National Development Minister Mah Bow Tan hinted that the income ceiling for BTO flats could be raised to S$10,000.
He had said then that the review will be conducted after the election and is expected to be completed within six months.
In a detailed breakdown of applicants for May's BTO exercise, Mr Khaw said about 40 per cent of first-timers applied under the Married Child Priority Scheme to live near their parents.
Mr Khaw said the ministry must be mindful of this aspiration. However, he admitted that meeting it will not be easy, as mature estates have limited scope for further BTO development.
The proportion of applicants making a repeat BTO attempt has gone down to 45 per cent from 60 per cent in the previous quarter.
14 per cent of the applicants had applied for three or more previous BTO exercises in the last one year. Of these, Mr Khaw said a third had the chance to select a flat but did not do so for their own reasons.
He said he is also aware of the frustrations and anxiety of those who did not have a chance to select at all, and he is ramping up BTO launches to try to ease this problem.
Meanwhile, Mr Khaw advised them to try less mature estates to improve on their odds.
HDB is now processing the 14,000 applications for the 4,000 units launched in May. Sixty-five per cent of them were first-timers, or someone who has never bought an HDB flat directly from the housing board, nor taken a housing grant.
Mr Khaw said analysing the profile of successful applicants will provide further insights.
- CNA/cc/ac
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Originally Posted by land118
