HDB looking at shortening wait for new flats

Buyers of new HDB flats may be able to get their keys more quickly.

The Housing & Development Board is looking at how to shorten the wait, from three years to two or two-and-a-half years.

National Development Minister Mah Bow Tan said the HDB will consider building new flats before selling them, especially in cases where the subscription rate is high.

He also stressed that new HDB flats remain affordable.

HDB tests this by comparing monthly mortgage installments to monthly household income.

The average Debt Service Ratio or DSR in the last six months were in the range of 17 to 25 per cent.

Mr Mah noted that this is close to the CPF contribution rate of 23 per cent, and is well within the international housing affordability benchmark of 30 to 35 per cent.

Mr Mah said: “At 25 per cent DSR for a three-room flat, we’re talking on the average of a monthly installment of $528. But the $528 can be almost fully paid using the CPF contributions. So in that particular instance, that family would probably need to pay something like $40-50 per month in cash.

“Based on the current situation, and based on the situation we’ve been seeing over the last 10 years, these figures indicate our new flats are well affordable, well within the means of all the different income groups.”

Source : Channel NewsAsia – 26 Apr 2010

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