On September 10, the Housing Development Board announced a number of changes to the housing grants for HDB buyers.
Here’s what property owners and buyers should take note of.
Raised income ceilings
During the latest round of announcements, HDB raised the household income ceilings for buyers looking to buy HDB flats. The income ceiling for first time home buyers buying both HDB Built-To-Order (BTO) flats and resale flats was raised from $12,000 to $14,000, while that for Executive Condominiums was raised from $14,000 to $16,000.
The income ceiling for singles was raised from $6,000 to $7,000. The new income ceilings will also apply to buyers’ eligibility for HDB housing loans.
Changes to housing grants
At the same time, HDB replaced both the Additional CPF Housing Grant (AHG) and the Special CPF Housing Grant (SHG) with the new Enhanced CPF Housing Grant (EHG).
Previously, there were 3 types of grants available. Namely, the CPF Housing Grant of $50,000, the Additional CPF Housing Grant (AHG) of up to $40,000 and the Special CPF Housing Grant (SHG) of up to $40,000. The AHG and SHG were applicable to people buying BTO flats, while the CPF Housing grant and the AHG were applicable to those buying resale flats.
The AHG had an income ceiling of $5,000, and the SHG had an income ceiling of $8,500. In contrast, the EHG offers grants of up to $80,000 and has an income ceiling of $9,000.
Eligible first time buyers will be able to enjoy the EHG, regardless of whether they buy a new or resale flat, and with no restrictions on their choice of flat type or the location of their flat.
The main caveat, is that buyers have to buy a flat with a remaining lease that will cover them and their spouses to the age of 95. If this condition is not met, the EHG will be pro-rated proportionally.
For eligible first timer singles who are 35 years old or older and earn no more than $4,500 a month, they will enjoy EHG of up to $40,000 with the same conditions.
What this means for property buyers
If you are a first time buyer and are already looking for a property, the implications are huge.
The increased income ceilings mean that you may be eligible to purchase HDB BTO, resale or ECs if you were not eligible to before.
So, as a buyer, you will have more choices of flat types and flat locations, and the higher possibility of getting housing grants, all while having the ability to finance your flat using HDB housing loans.
But what about property upgraders looking to buy a private condominium? According to Christine Sun, Head of Research and Consultancy at OrangeTee & Tie, the implications of the policy change could be far reaching for them too.
“The policy change may boost upgrader demand for private homes,” said Sun. “Flat owners who have planned to buy a new private condominium may now find it easier and faster to offload their HDB resale flats with a larger pool of potential flat buyers.”
Property outlook in Singapore for the near term
No matter what property buyers and sellers intend to do about the new announcements, there is some reassurance that the local property market is likely to remain stable in spite of global headwinds.
“Buying sentiment has remained largely sanguine despite the global market uncertainties and escalating trade tensions,” said Sun. “Rising fears of the US-China trade war morphing into a full-blown currency war may have bolstered demand for properties here, where Singapore is widely regarded as a safe haven for long term investments.”
“While Singapore is highly internationalised and performs a lot of trade with other nations, the Singapore dollar has been kept relatively stable with modest and gradual appreciation in line with its international trading partners.”
“The low-volatility and strength of our currency, undergirded by sound fiscal policies and a stable financial system, have boosted investors’ confidence that their property investments in Singapore will continue to hold value despite the current economic headwinds,” said Sun.
“[As such], property investors here are likely to preserve their wealth and enjoy a return on their investment in the long term.”