Minister of State for National Development, Tan Chuan Jin, wrote the following note on his Facebook page. It is with reference to Deputy Prime Minister and Finance Minister, Tharman Shanmugaratnam's remarks in Parliament that a household making S$1,000 could afford to buy a HDB flat.
Tears were shed by some, who lamented about the ability to buy flats for their parents in the future. Others raised their eyebrows when DPM Tharman made the point about the $1,000 income family being able to afford to buy a small flat. Online critics went to town to mock the im-possibility of this.
For a first time applicant, he can apply for a new 2-room standard BTO (Build-to-Order) flat in a non-mature estate. These flats are set aside for those earning $2,000 and below a month.
These households earning $1,000 can qualify for generous housing grants. Available to them are the Additional CPF Housing Grant (AHG) of up to $40,000, and the Special CPF Housing Grant (SHG) of up to $20,000. These grants could be used for the flat down payment. Total = $60,000
How much is a flat? Using the selling price of a new 2-room BTO flat in Fernvale Lea in Sengkang as an example, it is $100,000 (offered in the Jan 12 BTO exercise; the price range was from $83,000 to $112,000)
Deduct the $60,000. The applicant needs to pay $40,000.
With a loan for $40,000, repayment per month is as shown below:
- 30 years loan : $161/mth
- 25 years loan : $182/mth
- 20 years loan : $214/mth
For a young household headed by an income earner with a salary of $1,000 per month, he will have a total of $217 contributed monthly to his CPF Ordinary Account.
Monthly cash outlay = $0
This support for families enable them to move from rental to owning their own homes. Rentals for income of about $1,000 is $90-123 for 1-room, $123-$165 for 2-room.
An Inclusive Society...making it happen.
More info can be found at HDB InfoWEB:
Special Housing Grant HTML the link.
Additional Housing Grant HTML the link.
Help for low income families HTML the link.
Minister for National Development, Khaw Boon Wan, also weighed in on the issue. In this report, he said that Tharman was referring to a two-room Built-To-Order (BTO) flat.
That's because such a flat would cost a first-time applicant - who earns S$1,000 - about S$40,000, after subsidies.
Read the report here.