The government will make sure every Singaporean family who is working can afford a home, said Prime Minister Lee Hsien Loong in his National Day Rally Speech on Sunday.
Giving the assurance, he announced new Step-Up Housing Grants and the extension of the current Special Housing Grant to help more low- and middle-income households.
“I believe home ownership is still a fundamental principle for Singapore,” said Mr Lee, who added that the government is prepared to help Singaporeans achieve that.
But instead of bringing down the prices of Build-To-Order (BTO) flats, which will hurt all home owners, the prime minister said more help will be given to households to own a home.
The move aims to make sure that families earning S$1,000 a month can afford a two-room flat, while households with a monthly income of S$2,000 can buy a 3-room flat and those who make S$4,000 per month can afford a 4-room flat.
“Over time, as it becomes necessary, we will do more to help the lower- and the middle-income Singaporeans own their homes,” he said.
“We will always make sure that a HDB flat is always within reach — affordable and available to Singaporeans. Don’t worry. Go ahead, plan on it, get married, get your flat.”
Mr Lee said what this means is home buyers will be able to use mostly money from their CPF to pay their loans, and be able to pay off their flats in 25 years instead of 30.
Mr Lee added that the government has moved decisively in the last two years to help more Singaporeans own their homes. For example, a record number of new flats have been built, and prices of BTO flats have stabilised since they were de-linked from resale market prices.
However, Mr Lee also noted that many Singaporeans still worry about rising property prices.
So more grants will be given — for 2-room flats, which PM Lee noted are already affordable, a Step-Up Housing Grant will be given to low-income households if they upgrade to 3-room flats later.
The current Special Housing Grant, which provides up to S$20,000 in grants will also be extended — from the current 2-room and 3-room flats, to include 4-room flats.
Middle-income households, and not just the low-income, will also be able to qualify for the grant.
Mr Lee demonstrated how this makes buying a flat much more affordable.
Take the example of a typical 3-room flat at Fernvale Riverwalk, which costs S$170,000. For a household with an income of S$2,000, after adding in all the grants, the nett price of the flat would be S$111,000.
With a mortgage of 25 years, monthly payments work out to S$427 a month, and zero cash outlay.
While the government continues to keep flats affordable for future flat buyers, Mr Lee said for existing home owners, the value of their HDB flats will be maintained for their old age.
Source : Channel NewsAsia – 18 Aug 2013