Saturday, February 19, 2011

Housing grant for low-income first-timers

FIRST-TIME home hunters on low incomes struggling to get a foothold in the market will soon be given a helping hand to put a permanent roof over their heads.

The Government will bring in a special housing grant designed for this group, earning up to $2,250 a month in household income.

A total of $175 million a year in grants will be rolled out under the new Special Central Provident Fund (CPF) Housing Grant (SHG) unveiled in the Budget.

First-time home buyers purchasing build-to-order (BTO) flats from the Housing Board will be eligible for the grant. BTO homes are built in line with demand. The specific grant sum was not disclosed yesterday.

However, it will come on top of the subsidised loan and the existing Additional CPF Housing Grant of up to $40,000 for those earning not more than $5,000.

'Even among the lowest 20 per cent of our households, the home ownership rate is about 85 per cent. No other society comes close. But we will do even more,' Finance Minister Tharman Shanmugaratnam said in his Budget speech.

He added that the SHG, together with the other subsidies, will allow more low-income families to own their homes so that 'they too can see their assets grow as Singapore progresses'.

The grant was just one of the many measures to lessen the sting of the rising cost of living for poorer Singaporeans.

Mr Tharman emphasised that the Government's approach must remain centred on opportunities, not entitlements. 'This is why we are focusing on helping the low-income group through education, employment and home ownership.'

Experts say BTO prices have risen in tandem with HDB resale prices and the special grant - regardless of the amount - would enhance the ability of poorer Singaporeans to own their own place.

PropNex chief executive Mohamed Ismail said BTO prices have risen about 20 per cent in the past two years. He added the $2,250 income cap was also fair as the subsidy was public money and needed to be distributed in a targeted manner.

HDB resale prices skyrocketed 14.1 per cent last year although price gains moderated after cooling measures were introduced. This follows an 8.2 per cent rise in 2009 as the economy reeled from the financial crisis, a 14.5 per cent jump in 2008 and a 17.5 per cent surge in 2007.

Mr David Kan, executive director and co-founder of the Family Life Centre, said the grant was welcome and would definitely provide some financial relief for poorer families. 'Everyone needs a roof over his head and the special grant may even spur some lower-income families to work towards buying a home so they can qualify for the grant,' he said.

Mr Muhammad Siddiq Mohd Eunos, 22, may benefit from the grant. He and his wife live in his parents' home in Yishun and recently applied for a BTO flat at the Orchard Spring project in Yishun.

The couple, married in December 2009, earn less than $2,000 combined. Mr Muhammad is a full-time soccer player and his wife works as a shipping clerk.

'We're happy with these new rules. We're not sure how much it is but the money we save with the grant can be used for renovation,' he added.

Property consultancy Jones Lang LaSalle said households with an income of up to $2,250 can typically qualify for flat sizes of up to three rooms.

More details of the grant will be announced soon by the Minister for National Development.

No comments:

Post a Comment