Making public housing affordable for all

PHOTO: Making public housing affordable for all

SINGAPORE - Prime Minister Lee Hsien Loong turned housing agent on Sunday night, laying out the numbers that show how every working family in Singapore can afford their home.

Announcing a new grant of up to $20,000 for middle-income buyers going for three- and four- room flats, he promised that a family earning $4,000 a month will be able to afford a four-room flat comfortably.

A family earning $2,000 a month will also be able to afford a three-room flat, and a family earning $1,000 a month will be able to afford a two-room one, he said.

By "afford", he means that monthly mortgage repayments will mostly be covered by Central Provident Fund (CPF) savings, with minimal cash outlay required, and that home loans can be fully paid off in 25 years.

Most Housing Board loans now extend for 30 years.

To that end, HDB's Special CPF Housing Grant of up to $20,000, currently only for low- income households to purchase a small flat, will be extended to middle-income buyers looking for bigger homes.

This will mean that a family earning $2,000 a month can buy a three-room flat that costs about $170,000, without having to top up any cash each month.

And a family earning $4,000 a month can buy a four-room flat at about $285,000, and pay only $67 in cash for their monthly mortgage payments, he explained.

"Not bad!" he told the audience at the National Day Rally. "And people say HDB is making money? Something is wrong!"

For low-income families in two-room flats, Mr Lee promised a boost in efforts to improve their lives in the form of a "Step Up Grant" when they sell their two-room flats to upgrade to three-room ones. He did not elaborate on the details.

PM Lee did make it clear that the Government's strategy in tackling the affordability of public housing is to increase and extend grants, rather than meddle with existing policies governing the building and pricing of new flats.

During the Our Singapore Conversation exercise, suggestions on making Build-to-Order (BTO) flats cheaper, such as imposing a longer minimum occupation period, were debated.

But Mr Lee said the Government will not be fulfilling its housing promise to Singaporeans through policies that hurt existing home values.

"I don't think we want to do this by bringing down the BTO prices because after a while, that will bring down all the resale market and everybody who owns a flat in Singapore will be hurt," he said.

"We will keep BTO prices stable for some time, while increasing support for lower- and middle-income households."

Emphasising that home ownership remains an important principle for Singapore and that an HDB flat will always be "within reach, affordable and available to Singaporeans", he said: "Don't worry, go ahead, plan on it, get married, get your flat."

Business development executive Alvin Chua, 27, applauded the extension of the Special CPF Housing Grant to middle-income buyers like himself.

He and his civil servant girlfriend, who together make $5,000 monthly, plan to apply for a four-room flat in Bukit Panjang.

He said: "I think the sandwiched middle class has been suffering in Singapore, because we don't earn enough to be comfortable, but we are not eligible for a lot of the support and grants. I'm glad the Government is putting effort into supporting us now."

Not that PM Lee is getting a cut for his cameo role as housing agent. "I'm not getting any commission from (National Development Minister) Khaw Boon Wan," he quipped, drawing a round of laughter from the audience.

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