3. Results

From The Straits Times, 13 Apr 2013 – National Development Minister Khaw Boon Wan is not one to dither. Now that he has ticked off one goal of delinking the prices of new HDB flats from the heated resale market, he is upping the ante on new targets in his sights. After 18 months of stable Build-To-Order flat prices, Mr Khaw declared in Parliament last month that he wanted new flats in non-mature estates to cost four times the annual median salary of a buyer - down 30 per cent from the current 5.5 times. This would return prices to what they were before the property bull run of the last six years, he said. But in an exclusive interview with The Straits Times on Thursday, the minister-in-a-hurry picked up the pace even further. BTO pricing will be brought down to four times annual median incomes "quite soon", he says. "It's not something for the next century." Referring to the just-started latest round of the Our Singapore Conversation, which will have housing policy as one of the discussion points, he says: "We only have two months to discuss this thing, otherwise the topic becomes quite stale. And then we come to a conclusion, so that our lives can move on, can go on to do something else." The cheaper flats would have to come with restrictions to differentiate them, so that current flat owners would not see their values plummet overnight. In 10 sessions over the next few months, Singaporeans will also be asked to chime in on the path that the Housing Board should take in the coming decades. Should flats be an appreciating asset or a public good? How can it meet the silver tsunami of retiring baby boomers and the higher housing aspirations of younger Singaporeans at the same time? In his interview, Mr Khaw did not want to be drawn into discussing the pros and cons of policy options, for fear of influencing the coming conversations. They are "very open", he emphasizes, with only three criteria: "practicality, viability and acceptability". The Straits Times asked observers and analysts which policy options would fit the bill on tackling affordability and at what cost.

The amount of housing loan that can be granted will depend on the buyers’ age and monthly income. If you are buying an uncompleted flat directly from HDB, your loan eligibility will be subject to reassessment at the time of flat completion before the loan is disbursed. The maximum loan amount that may be granted depends on:- (a) maximum repayment period; The maximum loan repayment period is 65 years minus the buyer’s age or 25 years, whichever is shorter. (b) applicable interest rate; Computation of the maximum loan will be based on the prevailing interest rate which may be revised from time to time. The interest on the HDB loan will be computed on a monthly rest basis or such other basis as the HDB may decide. (c) monthly installments; and This is capped at 30% of the gross monthly income. (d) loan ceiling. The loan that can be granted for the purchase of an HDB flat is subject to: Sales Type Loan Ceiling* Direct purchase flats 90% of the purchase price Resale flats 90% of the resale price or 90% of the market value, whichever is lower *If you have selected your flat before 19 Jul 2005, your loan ceiling is capped at 80%. Source:http://www.hdb.gov.sg/fi10/fi10321p.nsf/w/HLHDBWhat?OpenDocument
Sales TypeLoan Ceiling*
Direct purchase flats90% of the purchase price
Resale flats90% of the resale price or 90% of the market value, whichever is lower

AS THE chief supplier of homes, the Housing Board should set the price of public housing, rather than take its cue from the resale market. No longer will HDB let "the tail wag the dog" as it did for decades when it used a market-based approach to price its Build-To-Order (BTO) flats, said National Development Minister Khaw Boon Wan. This resulted in soaring new flat prices as the resale market spiked 80 per cent over the last six years. Mr Khaw put a stop to this by "delinking" BTO prices from the resale market after he took over the housing portfolio in 2011. "(Being) led by the private sector (is like) a tail wagging the dog. We should be the price-setter, not be the price-follower... The social objective is to ensure home ownership and affordability," he said in an exclusive interview with The Straits Times. 


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