Singapore Public Housing Apartments in Punggol District, Singapore. (Image by happycreator /

Higher grants for more first-time HDB flat buyers, higher income ceiling for those eligible: Minister for National Development Lawrence Wong

More first-time HDB flat buyers will receive grants and more freedom in terms of choosing the size and location of their flats starting today (11 Sep), said Minister for National Development Lawrence Wong.

Speaking at the HDB Awards 2019 yesterday (10 Sep), Wong said that the government will increase the income ceiling from S$12,000 to S$14,000 for HDB flats, and S$14,000 to S$16,000for executive condominiums (ECs) respectively.

“The income ceiling for singles will be adjusted accordingly, which means that more homebuyers, more Singaporeans, first-timers, will have access to affordable housing options,” he added.

Wong also said that the government will lift restrictions on the Special CPF Housing Grant (SHG), and will subsequently extend the SHG to those buying new flats in mature estates, as well as to those buying five-room flats or larger.

“This means first-timers can potentially get up to S$40,000 more in grants when they purchase a new flat,” he said.

Currently, the SHG covers those seeking to purchase a four-room flat or smaller in non-mature estates.

Catering to young couples who intend to buy build-to-order (BTO) flats, Wong said that the government will increase its BTO flat supply, targeting to make available as many as 15,000 units this year.

“Next year, we are likely to have to release more units, which should be good news for the industry – because we are putting out more supply, there will be more business for everyone, be it an architect, builder or engineer.

“We are not only going to build more new flats, we are also going to have more upgrading projects in the coming year. We are studying this and we will share more details on the exact quantum when we are ready,” he added.

“There is first of all a price discount for new flats, and you have an additional grant, and special grant. The grants are such that the higher the income, the smaller the grant, so it’s progressive – meant to help those with lower incomes,” Wong noted.

However, Wong stressed that while “young couples receive significant support when buying their first home” presently, building new flats will not always be an adequate measure to meet the growing demand for public housing due to the scarcity of land.

“If you were to buy a new flat from the HDB, you will first receive a generous discount compared to the prices of similar resale flats in the neighbouring area. Then you get an Additional CPF Housing Grant (or AHG) of up to $40,000,” he said.

“While we need to ensure adequate supply of new flats, it will not be possible to meet all of the growing demand with new flats alone, because in some locations, particularly in the mature estates, we just don’t have enough land to build so many new flats.

“Over the longer-term, we have to ensure there is a sustainable balance in the demand and supply of flats. If you look at the statistics, last year, 75% of first-timer families purchased new flats, and 25% purchased resale flats, so three quarters and one quarter. This is already much higher than 10 years ago, when only 55% bought new flats, and 45% chose resale flats,” he said.

Wong acknowledged that it is unsurprising for first-time HDB flat buyers to opt for BTO flats, as “the incentive structure today encourages first-timers towards new flats”.

“The SHG, for example, is not applicable to those who buy resale flats. Resale flat buyers are only eligible for the CPF Housing Grant and the AHG. If you go for a resale flat, you can’t get the SHG. You may be eligible for the Proximity Housing Grant if you live near or with parents, but this is not unique to first-timers. It is no surprise that preferences are tilted towards new flats,” he said.

Hence, said Wong, the government will extend the SHG to all resale flats in order to encourage first-time HDB flat buyers to opt for resale flats instead of only eyeing new ones.

“With this change, the AHG and SHG will apply to all flat types, all locations and for new and resale flats. With this change, we will be able to simplify the structure of our schemes. We can combine all of these together into a new grant called the Enhanced CPF Housing Grant (EHG).

“The maximum grant is S$80,000, and with the increase in income ceiling, the income ceiling for this grant will be raised to S$9,000,” he said.

The EHG, Wong added, will be extended to those buying a flat with remaining lease that covers them until they reach at least age 95.

“For example, for a couple that are both 30 years old, they will need to buy a flat with 65 years or more of remaining lease to receive the full grant.

“Those who choose to buy a flat that does not cover them to the age of 95 can still receive the EHG, but it will be pro-rated based on the extent to which the flat can cover them to age 95, using the same formula that we are now using for the pro-ration of CPF and housing loan quantum for older resale flats, which we have recently introduced.

“In this way, we also hope to encourage home seekers to buy flats that can last them for life,” he said.

In Aug last year, Wong was reported as saying at a public feedback forum organised by government feedback unit REACH that an HDB flat sold on a 99-year lease is an asset that will appreciate as the country prospers.

“There is a high likelihood that over a period of time, if the economy does well, if incomes rise, then property values will appreciate together with the fundamentals of the economy, and your stake in the nation – your home – can also appreciate in value,” he told the audience.

Wong, however, reportedly said in Mar 2017 that “flat prices will come down correspondingly” as the HDB leases “run down, especially towards the tail-end”.

“So buyers need to do their due diligence and be realistic when buying flats with short leases. This is especially important for young couples, who have to plan for a much longer future,” he added.