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Government Programs For First Time Home Buyers With Bad Credit – To meet demand, HDB is ready to launch up to 100,000 flats between 2021 and 2025 if necessary, says the Minister for National Development.
The government will step in and do whatever is “necessary” to ensure affordable public housing for Singaporeans as well as a stable property market, National Development Minister Desmond Lee said on Tuesday (Oct 4). Rebecca Metteo and others.
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SINGAPORE: The government will step in and do whatever is “necessary” to ensure affordable public housing for Singaporeans as well as a stable property market, National Development Minister Desmond Lee said on Tuesday (Oct 4).
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“We will do so decisively, but also cautiously, mindful of the uncertain global economic outlook and rising interest rate environment, which will affect property prices and add to uncertainty in our housing market,” Lee said.
He added that the government will monitor the market and make policy adjustments on both the demand and supply sides if necessary to ensure that property prices are generally in line with economic fundamentals.
“This government is committed to the stability of the wider Singapore property market and to maintaining inclusive public housing, affordable and accessible to Singaporeans,” he said.
The minister was responding to questions from MP Yip Hon Weng (PAP-Yio Chu Kang), who asked what measures are being taken to address the growing feeling that Singapore’s property market is unaffordable for the masses.
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Mr. Yip also asked how recent adjustments in labor policy will affect property prices; and what else the government will do to ensure that housing remains affordable for Singaporeans if property market conditions do not improve.
In his response, Lee cited several reasons for the “strong and broad-based demand” for housing over the past two years.
He pointed out that there was more family formation as people in their 30s got married, mainly as a result of the easing of the COVID-19 measures.
In addition, there are social trends toward smaller households, as young couples, singles and grown children choose to buy their own homes instead of living with their parents, Lee said.
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Due to construction delays caused by COVID-19, more homebuyers have turned to the resale market due to longer wait times for built-to-order (BTO) apartments, explained Mr. Lee. Since 2020, the government has also seen more private landlords and existing HDB owners cashing in on their properties and entering the resale market, he added.
“These demand factors, combined with a previously low interest rate environment that made home loan provision cheaper, put upward pressure on fixed HDB resale prices,” he said.
Lee noted that since the government introduced the package of measures in December 2021, the HDB retail price index increased by 5.3 per cent in the first half of this year.
The cooling measures include an increase in ABSD (Additional Buyer’s Stamp Duty) rates, a tightening of the Total Debt Service Ratio (TDSR) limit and a reduction in the Loan-to-Value (LTV) limit for HDB loans.
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Sir Acknowledging housing affordability concerns, Lee said the government was “carefully monitoring” the housing market.
“We are committed to keeping public housing affordable and accessible, meeting Singaporeans’ housing aspirations and helping Singaporeans achieve home ownership. This is a long-term and fundamental national priority and provides us with the fundamental foundation for growing our families and raising our children and building strong communities. ” he said.
“This is why we continue to build and sell new HDB flats at below market prices as they come with significant subsidies.”
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Lee highlighted that the average price of a new four-bedroom flat in a non-mature property remained “relatively stable” at S$341,000 in 2019 and US$348,000 in the first three quarters of 2022.
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“For new flats in prime and central locations, we have introduced the Prime Location Public Housing Model, which provides additional subsidies on top of the substantial subsidies already provided for BTO flats. The aim is to keep flats in these locations affordable for a wide range of Singaporeans”. , Mr. Lee added.
Yip also questioned whether the price of HDB flats should be pegged to median household income or other indicators, given that salaries in the 30th percentile and below are significantly lower compared to the median percentile on the salary scale.
“Our reasonable criteria does not just consider average income as we offer a wide range of BTO flats for first-time home buyers with different housing needs and budgets,” said Mr. Lee.
He gave the example of a family that earned around S$5,000 for the first time, which is slightly less than the 30th percentile of the residents’ household income.
Government Will Do What Is Necessary To Ensure Affordable Public Housing For Singaporeans: Desmond Lee
“They can buy a 4-bedroom flat in any of the three immature real estate projects in the last BTO exercise in August 2022, namely Jurong East, Woodlands and Choa Chu Kang. These projects come with typical prices that are comparable to or lower than the Average Price of BTO flats in immature properties is around S$348,000,” explained Lee.
“After factoring in the S$45,000 in subsidies they would receive, they will have to spend about 23% of their monthly income on their home loan, which means they will be able to pay off their mortgage with their monthly CPF contribution without any kind of cash outlay.
This would result in a house price to income ratio for the family of about five, meaning that the price of your house is about five times your annual household income.
Lee noted that the ratio of average house price to average household income in other “comparable” cities such as London, Los Angeles and Sydney was about eight to 15 times, and more than 20 times in Hong Kong.
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In another scenario, the couple — earning C$6,500 a month — would have a house price-to-income ratio of about four, Lee said.
He noted that the ratio of average house price to average household income in other “comparable” cities such as London, Los Angeles and Sydney was about eight to 15 times, and more than 20 times in Hong Kong.
On resale flats, Mr Lee said the government provides “substantial” housing subsidies of up to S$160,000 to ensure resale flats remain affordable for eligible first-time families. He also regularly checks donations, he added.
“In general, the mortgage service ratio, which is the proportion of monthly income used to pay mortgage repayments, has remained below 25% for most first-time and resale home buyers who have taken out an HDB loan,” Lee added.
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“This is well below the international benchmark of 30 to 35 percent. This means that most first-time buyers can repay their home loan using their monthly CPF contribution with little or no cash outlay.”
Lee also summarized a series of measures announced last week aimed at cooling the housing market.
This included some private home owners who now have to wait 15 months after selling their properties before they can buy an HDB resale flat. In addition, maximum credit limits have been tightened. For HDB loans, the LTV limit was reduced from 85% to 80%.
“These measures are necessary because mortgages are long-term commitments and are often families’ largest liabilities. Higher minimum interest rates ensure that today’s borrowers take out loans that reflect the likelihood of rising interest rates and avoid over-extending,” Lee said.
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There is “real demand” from home buyers, Lee said, and the government has also increased supply in the public and private housing markets.
He highlighted how HDB has increased BTO supply and is on track to launch 23,000 flats annually in 2022 and 2023, a 35% increase from 2021.
“If necessary, we are ready to launch a total of up to 100,000 apartments between 2021 and 2025. We are also trying to launch more projects with shorter lead times of less than three years if possible,” Lee added.
We know switching browsers is difficult, but we want your CNA experience to be fast, secure, and the best it can be. Peaceheart said: The keyword “until” could very well make it available to everyone and end all “grants” Click to expand… Agreed. The subsidy may make HDB flats more expensive and hurt our budget
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100Yen said: I agree. The subsidy can make fixed HDB more expensive and hurt our budget. Most recently, the government introduced subsidies for SIM courses and SIM started increasing course fees. Seriously haha They have no choice
Harky said: Don’t accept so much that you la Click to expand… You can’t accept it. Iirc, there are some conditions attached to the use of grants. I don’t remember the details
Virtualape said: It is to preserve the appreciation. They have no choice. Click to expand… I see. It’s intentional
Before the seller raises his price by at least $30,000, the bbfa single still loses more than he earns
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Hakuna Matata said: First hours with another resident = Not eligible for HDB loan and $0 housing grant. Click to expand… Not quite true, look at the family structure
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