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Introduction – HDB New Cooling Measures August 2024
About HDB New Cooling Measures August 2024 | The Singapore government has taken proactive steps to ensure public housing remains both affordable and accessible. In response to the current trends in the HDB resale market, the Ministry of National Development (MND) and the Housing & Development Board (HDB) have announced new measures. These initiatives, effective from August 20, 2024, aim to stabilize the market and provide enhanced support to first-time home buyers, particularly those from lower-to-middle-income backgrounds.
Lower Loan-to-Value Limit for HDB Housing Loans
A significant part of the new measures is the reduction of the Loan-to-Value (LTV) limit for HDB housing loans. Previously set at 80%, this limit has now been reduced to 75%. This adjustment brings the LTV limit for HDB loans in line with the borrowing limits set by financial institutions, which also stand at 75%.
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This reduction is aimed at curbing the demand in the HDB resale market, which has seen substantial price increases in recent years. Although measures introduced in 2023 reduced the rate of price growth, the first half of 2024 still saw a rise of over 4% in resale prices. The lowered LTV limit is designed to encourage more cautious borrowing and ensure that the market remains stable and sustainable. The new limit will apply to all resale applications received by HDB from August 20, 2024, and will also affect Build-To-Order (BTO) applications from October 2024 onward.
Enhanced CPF Housing Grant for First-Time Buyers – HDB New Cooling Measures August 2024
In addition to the LTV adjustment, the government has also increased the Enhanced CPF Housing Grant (EHG) to offer more significant support to first-time home buyers. This increase was announced by Prime Minister Lawrence Wong during the National Day Rally 2024, emphasizing the government’s commitment to assisting Singaporeans in owning their first homes.
The EHG, introduced in September 2019, is a means-tested grant designed to help lower-to-middle-income households purchase their first home. Since its launch, over 72,300 households have benefitted, with more than $2 billion disbursed. The grant is based on household income, with no restrictions on the type or location of the flat.
Under the new measures, the maximum EHG for eligible families has been increased from $80,000 to $120,000. For eligible singles, the grant has been raised from $40,000 to $60,000. These changes provide additional financial assistance to those who need it most, making it easier for first-time buyers to afford their homes.
Image from Straits Times
Financial Assistance for New and Resale Flats – HDB New Cooling Measures August 2024
More on HDB New Cooling Measures August 2024 | The revised EHG offers more substantial support for both new and resale flat buyers. For eligible families purchasing a new flat, the maximum grant is now $120,000, while singles can receive up to $60,000. When buying a resale flat, families can receive up to $230,000 in total housing grants, which includes the revised EHG, the CPF Housing Grant, and the Proximity Housing Grant (PHG). Singles buying resale flats can receive up to $115,000 in combined grants.
These enhancements are designed to make both new and resale flats more affordable for first-time buyers. The new grant amounts will apply to those applying for new flats from the October 2024 BTO exercise onward and to resale flat applications submitted from August 20, 2024. HDB will update the HDB Flat Eligibility (HFE) letters for those who have already received them to reflect the revised grant amounts.
Maintaining Affordability in the Resale Market
Despite recent price increases, HDB resale flats remain affordable for the majority of buyers. In 2023, 80% of first-time families who collected keys to their resale flats used 25% or less of their monthly household income to service their HDB housing loans. This means most buyers can cover their loan repayments using only their monthly CPF contributions, with little to no cash outlay.
However, the government is aware that some resale transactions have reached very high prices, although these cases are a small minority. The new LTV limit and enhanced EHG aim to keep resale prices in check, ensuring that flats remain affordable for the average Singaporean family.
Commitment to Affordable and Accessible Housing – HDB New Cooling Measures August 2024
As part of ongoing efforts to provide affordable housing, the government will offer 8,500 flats across 15 projects in the upcoming October 2024 BTO exercise. These flats will include additional subsidies for Plus and Prime units, catering to a range of budgets and needs. The government is on track to meet its target of offering 100,000 flats between 2021 and 2025, underscoring its commitment to ensuring every Singaporean has access to quality, affordable housing.
Conclusion – HDB New Cooling Measures August 2024
The new measures by MND and HDB to cool the HDB resale market and enhance support for first-time home buyers demonstrate the government’s dedication to maintaining a stable housing market. By lowering the LTV limit and increasing the EHG, the government is ensuring that public housing remains within reach for all Singaporeans. The government will continue to monitor the market and adjust policies as needed to sustain a stable and sustainable property market for future generations.
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