CPF APPROVED RESIDENTIAL PROPERTIES SCHEME (Raising of limit to full valuation price)

Mr Heng Chiang Meng asked the Minister for Labour whether he will amend the Central Provident Fund Approved Residential Properties Scheme to allow members to invest their CPF savings in private residential properties up to 100% of the valuation of the property instead of the present limit of 80%.

Mr Heng Chiang Meng: Sir, in connection with this question, I would like to disclose,

firstly, a personal interest in the sense that I am a user of the scheme and, secondly, a professional interest in the sense that I am involved in the extension of loans to users of the scheme.

Mr Lee Yock Suan: Mr Speaker, Sir, the proposal by the Member for Jalan Kayu is one that has been raised by several PAP MPs in recent years and was also taken up by the GPC for Labour. I am pleased to announce that for the Approved Residential Properties Scheme (ARPS) the Government has decided to raise the limit for investment of CPF funds in private residential property from the present 80% to 100% of the valuation of the property. The limit will be based on the valuation as determined at the time of purchase. This new limit will come into effect before the end of the year as soon as the CPF Board has finalized the security and other details with the mortgagees.

About 35,000 CPF members are servicing housing loans under the ARPS. Over the next two years, about 2,000 of them will be reaching the 80% withdrawal limit. They will benefit from this change as they will be able to service their housing loans with CPF up to the full 100% of valuation. Other CPF members who have yet to reach the limit will also benefit in due course as they can use the additional amounts to repay their outstanding loans, thus reducing the cost of borrowing. So too will the new home buyers.

CPF members should take note that the 100% is the final limit for private properties under the ARPS. They should plan their cash flow accordingly and be prepared to meet any instalment payments above the 100% limit with their own funds.