Saturday, 23 September 2023

We are shifting our daily news to Gutzy.Asia Support us there!

HDB means-testing?

Leong Sze Hian / Columnist

I would like to ask HDB some questions about our public housing policies.

What is the rationale for requiring applicants to upgrade to a bigger flat in order to get a HDB concessionary loan ?

Why is it that a single or divorced applicant earning less can get a larger loan to buy a flat, than a larger household earning a higher income ?

How are Singaporeans expected to have more children, and/or stay with their parents, when the more family members you have, the harder it is to get a HDB loan ?

Why is the HDB not transparent in disclosing the process, criteria, formula and methodology ; in means testing loan applicants on the loan quantum ?

Why does the HDB use the threat of compulsory acquisition of flats, for those who are in arrears – given the general perception that the “compulsory acquisition” valuation may generally be lower than selling in the open market ?

Can the HDB give us the statistics as to how many flat-owners in arrears, have been coerced into selling in the open market ?

Depending on the statistic in answer to the above question, does the HDB still maintain its position that only 360 flat-owners voluntarily surrendered their flats from 2003 to 2006 ?

Isn’t the HDB re-sale levy of up to $ 40,000 for those who upgrade to a new flat, instead of a re-sale flat, discriminatory against flat-owners whose flats are in negative equity or in arrears ?

Isn’t the HDB’s policies self-contradictory, when it’s income ceiling policy “forces” the lower-income to buy larger flats than they can afford (see below for a detailed explanation), its new flat purchase and concessionary loan eligibility policy for upgraders only, and it loan eligibility and “means testing” policy denies adequate loans to larger and lower-income families ?

Aren’t some of the above policies discriminatory against lower-income or larger families ?

Shouldn’t the HDB be accountable to Parliament, when it decided to “means test” from 1 January 2007 ? Was any approval sought or debated in Parliament ?

Income ceiling “force” lower-income to buy bigger flats ?

I refer to the articles “$ 645K HBD’s priciest flats go on sale : Pinnacle@Duxton units are among 992 released for sale yesterday” (ST, Sep 27) and “New HDB flats for sale, rent in West” (ST, Aug 27).

It states that “The 94 three-room flats will have a floor area of 67 sq m each and cost $ 138,000 to $ 170,000”/

This means that the average cost of the new three-room flats is $ 154,000

($ 138,000 plus $ 170,000 divided by 2).

The monthly mortgage repayment for a 30-year HDB loan at 2.6 per cent interest on a 90 per cent loan of $ 138,000 (90% of $ 154,000) is about $ 554.

In this connection, HDB’s income eligibility requires a household earning more than $ 2,000 a month to buy a flat that is bigger than a two-room flat.

So, for a household earning say $ 2,001, after utilising the CPF Ordinary Account (OA) monthly contribution of $ 460 and cash of $ 94 to pay the monthly mortgage, one is left with a disposable income of $ 1,506 ($ 2,000 less employee’s 20 per cent CPF contribution minus $ 94).

Assuming a household of a couple with two children with expenditure of $ 685 (utilities $ 100 plus service and conservancy fee $ 35 plus transport $ 400 plus children’s educational costs $ 150 plus miscellaneous other expenses $ 100), one is left with $ 721. This amount enables just about $ 6 per day per family member for food ($ 21 divided by 30 divided by 4 family members).

If the household has non-working parents of the working couple, the financial stress may be even greater. Similarly, a household earning just over $ 3,000, is also not eligible to buy a three-room flat, and have to buy a four-room flat.

In view of the above, is the HDB’s income eligibility, which I understand has not been changed for many years, despite increasing new HDB flat prices, forcing Singaporeans to buy bigger flats than what they can afford ?

To what extent has this contributed to the financial stress of Singaporeans ?


Notify of
Inline Feedbacks
View all comments

Latest posts

Election surprises and certainties: Dissecting Tharman’s presidential win

In the 2023 Presidential Election, Mr. Tharman Shanmugaratnam secured a stunning 70.4% landslide victory, surprising many, including himself. Despite expectations that TKL would win the opposition votes, voters from both camps showed a preference for Tharman's charisma and perceived competency. As Singapore reflects on the outcome, questions arise about the election's fairness and the real implications of Tharman's dominant win.

Volunteer as a Polling and Counting Agent for Singapore’s 2023 Presidential Election

For the upcoming Singapore Presidential Election on 1st September, members of the civil society have spearheaded an initiative to strengthen our democratic fabric. We invite committed individuals to join us as Polling and Counting Agents, standing together for a transparent, fair, and just election. This vote counting exercise, organized by members of civil society, is not specifically in support of Mr Tan Kin Lian, a candidate in the upcoming Presidential Election. It's an exercise in active citizenry. Nonetheless, Mr Tan endorses this initiative, which hinges on his candidacy, championing transparency, and has given permission for the results to be shared publicly.

Reflections from the Centenary: The Legacy of LKY and Singapore’s Future

Gilbert Goh reflects on the LKY centenary event: an inspiring showcase of a leader's global legacy juxtaposed against current challenges, urging Singapore to continue its path of progress.

Lim Tean advocates for Tan Kin Lian: A visionary leader for Singapore’s Presidency

In his speech at Mr Tan Kin Lian's launch of his presidential bid, Mr Lim Tean passionately championed the need for a truly Independent President. Highlighting Mr Tan Kin Lian's unique credentials and genuine concern for the wellbeing of Singaporeans, the Peoples Voice leader emphasized the pressing challenges of rising living costs and job insecurities faced by the public. Mr Lim depicted Mr Tan Kin Lian as a beacon of hope for the nation, advocating for a leader who genuinely understands and represents the people’s aspirations.

Tan Jee Say endorses Tan Kin Lian for President: A courageous, genuine, and humble...

In advocating for a truly representative leader, Tan Jee Say underscored Tan Kin Lian's humility, courage, and genuine dedication. Highlighting the pressing need for restored public trust and effective independence, Tan Jee Say emphasized that Tan Kin Lian, as the 'People's President', would bring back hope to Singaporeans and champion true democracy

Tan Kin Lian’s pledge: Rekindling unity and charting a vigorous future for Singapore

In the press conference to announce his bid for the Singapore presidency, Tan Kin Lian emphasizes safeguarding Singapore's reserves and strengthening public service integrity. Drawing on his 30-year leadership at NTUC Income, he envisions a future with affordable living, accessible housing, and job stability, pledging collaboration with the government for a united nation.

Strengthening Singapore’s political foundations: A call to action by Leong Mun Wai on Singapore’s...

Leong Mun Wai urges Singaporeans to strengthen political checks and balances, emphasizing, 'The best is yet to be for Singapore if we dare to make the right decision in upcoming elections.

Trending posts