Review of Monthly Household-income Ceiling for Prospective Buyers of BTO Flats and Executive Condominiums

Mr Speaker, the income ceilings for the purchase of subsidised HDB flats and Executive Condominiums, or ECs, are reviewed regularly to ensure that public housing remains within reach of the majority of citizen households and that housing subsidies are given to those who need them most. Factors that are considered include the household incomes of Singaporeans and prevailing housing market conditions, among others. We are also mindful that lower-income households could be crowded out by an adjustment to the income ceilings.

The income ceiling was last reviewed in 2019, when it was raised from $12,000 to $14,000 for families buying a new flat, and from $14,000 to $16,000 for families buying an EC from property developers. At the same time, we introduced the Enhanced CPF Housing Grant, or the EHG, to better support lower- to middle-income families buying their first homes.

There are no plans to revise the income ceilings at this point. At the current income ceiling of $14,000, about eight in 10 Singaporeans are eligible to apply for a BTO flat, while the $16,000 ceiling enables about nine in 10 Singaporeans to apply for EC. There is no income restriction for the purchase of a resale HDB flat on the open market.

HDB is committed to helping Singaporeans, particularly first-timers and lower- to middle-income families, to own a home. The Government will continue to monitor housing market conditions closely to ensure that public housing remains affordable and accessible.

Thank you, Speaker and I thank Minister Indranee for the comprehensive reply. The real income of Singaporeans may not increase this year and next year because of high inflation. But their nominal income will likely increase if inflation stays high at 5% this year, and probably next year at 10%. So, does this not affect only the income ceilings of application of BTO flats but also affect Singaporeans' income criteria eligibility for Enhanced Housing Grant, which means that $1,500 now get $80,000 of EHG, a lot of them may exceed $1,500 because of the increase in nominal income but not the real nominal income?

My second supplementary question is that in 2010, the income ceiling for HDB BTO flats and the EC, the differential is $2,000 – that is, the difference between $8,000 and $10,000. Today, the gap remains at $2,000. But in 2010, the differential was 25%. Today, the gap is 14%. And the average price of, say, a 3-bedroom EC, as compared to a, HDB 4-room flat, is probably more than double. So, could the Second Minister consider these two considerations?

I thank the Member for his supplementary questions. I also understand his concern, which is about affordability and accessibility for HDB housing for the majority of Singaporeans. What HDB and MND do is to look at it as a whole, not just one lever or one particular measure in isolation. Overall, what we are trying to do is to look at the demand as well as the supply which, of course, in the pandemic years, has been somewhat constrained.

So, to ensure that public housing remains affordable and accessible, one of our current priorities is to rein in the strong upward momentum in HDB resale prices. To this end, as the Member knows, we have rolled out additional measures in September 2022 to moderate demand and ensure prudent borrowing amidst rising interest rates. And then to moderate demand for resale flats, MND and HDB introduced the 15-month wait-out period for private property owners and ex-private property owners to buy a non-subsidised HDB resale flat. Raising the income ceiling at this juncture may negate the efforts to cool the resale market as it would enable the higher-income households to bid up resale prices further.

Our other priority is to ramp up the supply of new flats to meet the strong demand for public housing. Thus, any review to raise the income ceiling would also have to be balanced against greater competition for the finite resources of the Government.

So, in short, what we are really saying is this. We understand the concerns. We know that Singaporeans are keen to buy their HDB flats. On MND and HDB side, we will do our utmost to ensure that they remain affordable and accessible. Tweaking the income ceiling, in and of itself, may not necessarily be the best measure. We will look at it overall and see how we can maintain that accessibility and affordability.

I was also asking about the income criteria to qualify for the various levels of the Enhanced Housing Grant and other housing grants. So, with the increase of the nominal income, you put a lot of people at a disadvantage that they cannot qualify for the higher housing grant. That is the question. That is the first supplementary question. The second supplementary question is about the differential in gap between the HDB BTO income ceiling as well as the EC income ceiling. The gap of $2,000 is quite different between today, which is a 14% difference, as compared to 2010 when it was a 25% difference. So, two different questions. I hope the Second Minister can answer the two questions.

In so far as the grant is concerned, if the concern is whether or not their housing grant can be increased, that is something we can look at and make a separate decision because they are two separate things. So, if the Member is asking, today, can I say that we will increase the income ceiling, the answer is there are no plans to do that at this stage. If the Member is saying whether we can increase the grants, that is something we can look at. But, overall, the key message to the Member and to Singaporeans is that we will do whatever is necessary to ensure that housing remains affordable and accessible.