Sunday, August 14, 2011

HDB Income Ceiling Will Be Raised More HDB Will Be Built

Prime Minister Lee Hsien Loong has just given his most important speech in 2011, his National Day Rally speech. This is the first rally since the last  GE 2011. He has announced that the income ceiling for BTO flats will be raised from $8,000 to $10,000 (On Monday, Minister of National Development Khaw Boon Wan announced that the ceiling is effective from August 15th 2011).

HDB will increase income ceiling first time in nearly 2 decades from 8,000 SGD to 12,000 SGD for BTO flats and 10,000 SGD to 12,000 SGD for the executive condominiums

He has also announced that next year in 2012, HDB will also release another 25,000 units on the top of 25,000 which will be released this year in 2011:

"PM Lee first hinted at an increase in the income ceiling in May during the General Elections when housing emerged as a top issue. 

In his speech, PM Lee noted that the ratio of applicants to flats at BTO projects have started to come down. 

Since taking over the portfolio for national development after the General Elections, Minister Khaw Boon Wan has increased the BTO supply this year to 25,000 flats and conducted large scale BTO launches to increase the chances of flat selection for applicants.

PM Lee also announced that the supply of rental flats will be increased by 7,000 in the next two years. The Government will delay the demolition of some En Bloc Redevelopment Scheme blocks for the flats to be used as temporary rental units."
Source : Income ceiling for BTO raised to $10,000, more rental flats in the pipeline.

Last few years, supply crunch in HDB flats as well as rising incomes of newly wed Singapore couples made many Singaporean couples to look for HDB flats in secondary market (called HDB resale market). They form a significant part of demand for resale HDB flats whose price has risen to very expensive levels thanks to increased demand from Singaporeans and increased number of PRs. Although these 50,000 new BTO flats will start to enter into resale market at earliest in 2015-2016 to ease the supply crunch, they will probably take significant demand out of the market as more young couples will be able to grap a unit directly from HDB primary market. 

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