HOUSING AND DEVELOPMENT BOARD (Income ceilings for rental and purchase flats)

[Mr Speaker in the Chair]

Dr S. Vasoo asked the Acting Minister for National Development whether he will re-consider the current income ceilings set for applicants for Housing and Development Board rental and purchase flats.

The Acting Minister for National Development (Mr Lim Hng Kiang): Mr Speaker, Sir, I am pleased to announce that the Ministry of National Development has decided to raise the income ceilings for the purchase of 4-room and larger new HDB flats. The income ceilings will be increased from $7,000 to $8,000 for nuclear families, and from $11,000 to $12,000 for extended families.

The revision will take effect from tomorrow, 6th December 1994. With this revision, 94% of households in Singapore will fall within the income ceilings. It will ensure that those who are unable to purchase private property will continue to be able to purchase HDB flats.

There will be no revision to the income ceiling of $800 for rental HDB flats, as these are intended for those who cannot afford to buy their own flats. Families with household incomes of more than $800 are encouraged to buy their own flats through a variety of programmes to promote home ownership:

First, HDB's buy-back of 3-room flats from the resale market, for subsidised sale to households earning $1,000 a month or less. The selling prices of these flats are such that an average household earning $800 a month should be able to afford the monthly instalments for the cheaper flats; and

Second, HDB's 4A2 flats, which require an average household income of $1,100 to service the monthly instalments.

With all these schemes, families with household incomes above $800 should be able to buy their own flats, rather than to rent them.

Dr S. Vasoo (Tanjong Pagar GRC): Is the Minister willing to consider revising the income ceiling of $1,000 for applicants of the buy-back scheme for 3-room HDB flats in the near future?

Mr Lim Hng Kiang: Mr Speaker, Sir, we started this programme only in October with the ceiling set at $1,000. With that ceiling, we have approximately 2,800 applicants for such flats. I think we should try and meet the demand of these 2,800 applicants first before we raise the ceiling further.

Dr Kanwaljit Soin (Nominated Member): Sir, with the increase in the income ceiling, there is going to be a greater demand. Would the Minister consider increasing the supply, otherwise the waiting periods are going to be longer?

Mr Lim Hng Kiang: Sir, as I have already explained, the present ceilings cater for 92% of all Singapore households. With the higher ceiling, 94% are now eligible. Two extra percent will not significantly increase the application rate. Today, we are supplying 34,000 new flats. We are not inclined to supply more because that would stretch the resources of the construction industry and may have unexpected results on the quality of the flats.

Dr Vasoo: Is the waiting period going to be changed as a result of the revision in income ceilings?

Mr Lim Hng Kiang: With this increase in income ceilings, we do not expect a big increase in the number of applications. So we do not expect a significant change in the waiting period.