More flats for sandwiched class

Announcement on private property today

Some 22,000 Build-To-Order (BTO) flats – over a third more than this year’s supply – will be pushed out next year. And this was not the only piece of pleasant news for flat seekers yesterday: The Government will also widen public housing choices for the “sandwiched group”, those who earn a monthly income of between $8,000 and $10,000.

Yesterday, Prime Minister Lee Hsien Loong announced that this group – which previously only qualified for the Housing and Development Board’s Executive Condominiums (ECs) – will soon be allowed to buy Design, Build and Sell Scheme (DBSS) flats.

They will be granted the same concessions as they previously enjoyed when buying an EC: They are eligible for a $30,000 housing grant and can arrange their own financing.

With this relaxation, which answers a call by Members of Parliament, the Government will release more land for developers to build DBSS flats and ECs to ensure there is adequate supply to meet Singaporeans’ housing demands.

HDB will also speed up the completion of new BTO flats from the current three to three-and-a-half years, said Mr Lee, who added that home ownership rules would be further tightened to stress that HDB flats “are primarily (for) owner-occupation”.

Mr Lee noted there was “quite a number of private property owners who buy HDB re-sale flats and re-sell them” within one to two years.

More details, as well as measures concerning the private property market, will be announced by the Ministry of National Development this morning.

The Government has twice acted to cool the market – most recently in February – but prices are still rising and cash-over-valuation amounts remain high.

Said Mr Lee: “Our purpose is to make sure that in the long term, Singaporeans can own their homes … and it will be a gradually-appreciating asset which will grow as Singapore grows.”

Flat buyers welcomed yesterday’s announcements.

Mr David Shen and his fiancee, whose combined salary is close to the existing $8,000 income ceiling, have failed twice in their application for Built-To-Order (BTO) flats.

Said Mr Shen, 29: “From the way things are going, it seems quite difficult for us to get a new BTO flat. The relaxation of rules will definitely help us, as we’re actively looking to buy a flat.”

Copywriter Dunstan Lee, 26, noted however that the move would result in stiff competition for DBSS flats which could lower his chances of getting one.

Mr Lee noted that the sandwiched group is anxious about being ineligible for flats bought directly from HDB while being priced out of the private property market.

While some have blamed rising housing prices on foreigners, the prime minister urged Singaporeans to look at broader economic forces at work. He noted that property prices fell in the first half of last year, even though there were many foreigners here. This year, property prices here have risen, similar to the situation in China and Hong Kong.

Mr Lee assured Singaporeans the Government would manage immigration to ensure that Singapore does not become too overcrowded.

“And we can commit to you, I will promise you, that we’ll always keep HDB flats within reach of Singaporeans. That’s what HDB’s mission is, and that’s why it exists. The flats will be affordable, the supply will be adequate. You can’t get it straight away tomorrow, but the wait won’t be too long,” he added.

Source : Today – 30 Aug 2010

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