Two important policies were announced yesterday in the NDP Rally 2011 by Prime Minister Lee Hsien Loong which will have effect on Singapore’s property market. The first one is that income ceiling for Built-to-Order (BTO) units increased from $8,000 to $10,000 per month and the income ceiling for Executive Condominiums increased from $10,000 to $12,000 per month. Second, HDB will launch a record 8,000 units in September 2011, comprising 5,500 BTO flats and at least 2,500 balance flats. This will be a total of 25,000 units to be released this year in 2011 and another 25,000 units will be available in 2012.
“This announcement is highly commended as more Singaporeans are now eligible to buy a BTO flat or an Executive Condominium, that is at least 30% cheaper compared to the HDB resale market and the new private homes. The immediate availability of 8,000 units in this September will definitely ease the current demand as home buyers are eventually able to have their first home sooner than expected. Young couples are going to walk away with a higher success rate in their bids compared to the past. In addition, the release of 2,500 balance flats will see a great interest as these units are likely to be completed earlier.
With the implementation of income ceiling for EC buyers from $10,000 to $12,000, it is projected that more Singaporeans will be able to achieve their aspirations of upgrading from their HDB flats. It is understandable that the decrease of HDB Housing Grant for those earning more than $10,000, certainly justifiable for greater subsidies to be reserved for those with a lower income”, commented Mr Mohamed Ismail, CEO of PropNex Realty.
Singles are not left out in this policy change. There will be greater interest of this group in applying for the HDB resale homes with the income ceiling increased to $5,000 and the revised grant quantum that will incentivise the purchase. However, it was noted that as this is a small group of buyers, thus there may not be a significant impact.
“The release of more HDB flats is welcomed news but it will take some time for these units to be built. The launch in September is definitely a bonus for Singaporeans as their dream of owning a home will come true sooner,” said Mr Ismail.
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