REVIEW OF HOUSING SUBSIDIES

REVIEW OF HOUSING SUBSIDIES

5.

Mr Zaqy Mohamad asked the Minister for National Development whether housing subsidies have been reviewed in the same way as the prices of HDB flats which are valued at market rate, to assist those in the middle income group who are not able to benefit from the additional housing grant.

Mr Mah Bow Tan: The Government is committed to the home ownership programme and ensures that HDB flats are affordable to 90% of Singaporeans. To help eligible first-timers buy and own flats, HDB offers new flats at subsidised prices, and provides a CPF Housing Grant of $30,000 or $40,000 for those who choose to buy resale flats. HDB also offers mortgage loans at a concessionary interest rate to help buyers finance their flat purchase.

As a result, HDB flats are very affordable to the vast majority of Singaporeans, including the middle income group. Over 70% of all HDB loan mortgagors service their monthly instalments fully from their CPF account. Another 10% use a combination of CPF and cash. In 2006, the average new HDB flat buyer uses only about 20% of his monthly household income* to service his housing loan.

Nevertheless, the Government recognises that the lower income households may need additional help, given the economic pressures of globalisation. The Additional CPF Housing Grant (AHG) was thus introduced in March 2006 to provide further assistance to lower-income households to buy their first flat. The qualifying income ceiling for the AHG is set at $3,000, to ensure that the Government’s limited public housing subsidies are prioritised to help families with more pressing needs.

• This includes employee’s CPF contribution.

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