18 AUGUST 2009

Question No. 102
Question by: Er Lee Bee Wah

Er Lee Bee Wah asked the Minister for National Development with the changes in household incomes of Singaporeans over the past three years (a) whether the Ministry will consider raising the current monthly income cap of $8,000 for married couples applying for a HDB flat; (b) what is the percentage of Singaporean couples whose monthly income is between $8,001 and $12,000; and (c) what is the mean income of a married couple, both of whom are university graduates and who have been working for the past eight years.

Answer

1      HDB’s mission is to provide affordable and decent public housing for the vast majority of Singaporean households.  Housing subsidies are generous and calibrated to provide more for those in greater need.  That is why there is a cut-off income for eligibility to buy subsidized public housing.

2      The current household income ceiling of $8000 per month allows about 8 out of 10 Singaporean households to qualify for subsidized housing. This is a generous cut-off which allows our limited housing budget to be spent prudently.  As such, my Ministry does not intend to raise the income ceiling further at this time.

3      Families whose household income exceeds the income ceiling can still buy HDB flats from the resale market, where there is a wide range to suit their budgets.  If a family with household income of say $10,000 were to buy a resale 5R flat in a non-mature estate at average price of $364,000 without any housing subsidies, they need only about 15% ($1530) of their monthly income to service the mortgage loan¹, which is well within their means.

4      In response to the member’s question, those between $8,000 and $12,000 monthly income make up about another 13% of resident households.  In other words, if the income ceiling were raised to $12,000, the housing subsidy would be extended to about 9 out of 10 Singaporean households.

5      The Member also asked about the mean income of a graduate couple that has been working for the past 8 years. HDB does not have this data.

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¹This assumes a 90% loan for the flat, based on non-concessionary rate loan of 3.82% for 30 year-term.

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