HOUSING policy changes announced by Prime Minister Lee Hsien Loong in his National Day Rally speech on Sunday were seen as efforts to boost home ownership for home renters as well as the middle-income and sandwiched classes, while promoting inclusiveness at the same time.
Mr Lee announced four changes in all. Firstly, the income ceiling for HDB flats will be raised from S$10,000 to S$12,000, while that for executive condominiums (ECs) - a public-private housing hybrid - will be raised from S$12,000 to S$14,000.
He said this is to allow more Singaporeans to buy new HDB flats and ECs. National Development Minister Khaw Boon Wan had earlier hinted at this move in June, noting that incomes have gone up since the ceiling was last raised in 2011 (see chart). This is also in light of couples marrying later and crossing the income ceiling by the time they've settled down.
The second has to do with the Special CPF Housing Grant (SHG), which will be extended to cover more households. This will be done by raising the grant's household income ceiling of S$6,500 to S$8,500. With this, two-thirds of all households will qualify, up from just half of all households previously. The current maximum SHG amount of S$20,000 will also be doubled to S$40,000.
"The result? A median household buying a flat that previously received S$10,000 of SHG will now receive S$30,000 - three times as much," Mr Lee said.
The third change he announced was targeted at home renters who had bought a flat before but sold it, and are back living in rental flats.
This group of rental tenants are difficult to assist, because they have already benefited from previous HDB subsidies, and the government cannot just give them another grant because that would not be fair to others, Mr Lee said.
But without a grant, it would be challenging for them to afford another flat. These families also tend to face many other problems related to their jobs, relationships, and children's education. Their housing problem is a result of those other problems, Mr Lee noted.
"I am very concerned about the future of this group. Without help, a flat of their own may be permanently out of reach. They will be trapped in poverty, and their children will be affected, and it will perpetuate the cycle into the next generation."
The government has decided to implement a "Fresh Start Housing Scheme" to help these second-timer rental households own a two-room flat. These flats will come with shorter leases and stricter resale conditions to make them more affordable. The government will also support the family with counsellors to help them to solve their problems.
This is in line with Singapore wanting to ensure that no one is left behind, said Mr Lee.
The fourth change sees the introduction of a Proximity Housing Grant, tailored at couples who are looking to buy a resale flat with or near their parents, or parents looking to live near their married children. Mr Lee said the Ministry of National Development will announce details later.
All these changes are kicking in now that build-to-order flat prices have stabilised and the queues for flats shortened, following the launch of 100,000 HDB flats since 2008.
A BTO supply crunch that could not match first-time buyers' demand quick enough in 2011 had led to complaints of long waiting times, but a ramp-up in building in the last three years has helped to clear this backlog. According to Mr Lee, most first-timers can now select a flat in a non-mature estate on their first try.
Desmond Sim, head of Singapore and South-east Asia at CBRE Research, said the higher income ceilings and grants will help increase the demand on the top and bottom ends, by boosting the number of people who qualify for public housing and ECs.
"The government is addressing home affordability and lowering the barriers of entry to improve home ownership, following the cooling measures they have introduced," he said.
PropNex CEO Mohamed Ismail said the raising of income ceilings was timely, as the subscription rate for BTO flats has dropped to about two times, from five times three years ago - which shows that the supply is becoming sufficient to meet Singaporeans' needs
By increasing the ceiling, more Singaporeans can have a chance of owning public housing. So can home renters who will get a "second bite of the cherry" at subsidised housing under the new scheme, he said.