ST Forum : Income ceiling helps ensure neediest get subsidised flats

Jan 22, 2010
Income ceiling helps ensure neediest get subsidised flats

I REFER to the letters by Miss Yvon Lim ('How realistic is $8,000 income ceiling for flats?', Jan 6); Mr Glenn Ng ('Buyer's appeal', Jan 12); Mr Joseph Ong ('It limits price hikes', Jan 12); and Mr Xavier Chua ('Flats: Fairer formula for income ceiling', Jan 14).

We need to manage our public housing budget judiciously. The income ceiling ensures that housing subsidies are targeted at those who need them more. The eligibility for housing subsidies extends up to a monthly income of $10,000, not $8,000. Those earning between $8,000 and $10,000 are eligible for a $30,000 grant to buy executive condominiums (ECs).

They should not compete with those earning less than $8,000 for new HDB flats.

For the same reason, income ceilings are set at $3,000 for three-room flats and $2,000 for two-room flats to safeguard these smaller HDB flats for the lower-income. HDB has recently released two new sites for EC development.

Besides ECs, households with a monthly income of $8,000 to $10,000 can buy a resale flat for which there is a wide range in various locations to suit different budgets and preferences. For instance, a family that earns $9,000 can consider the following:

· A five-room resale flat in a non-mature estate. The average price for a flat in a non-mature estate is about $380,000, and estimated monthly instalments are about $1,574, which can be fully paid from Central Provident Fund (CPF) savings.

· A five-room resale flat in a mature estate. For example, the median price for a resale flat in Queenstown is about $619,000. The estimated monthly instalments are about $2,564, which can be paid mostly from CPF savings, and supplemented with a cash payment of $494.

As these examples show, flat buyers earning above $8,000 a month can comfortably afford HDB flats, but they will have to make trade-offs between price, size, attributes and location.

Lily Chan-Wong Jee Choo (Mrs)
Deputy Director (Policy and Property)
Housing & Development Board