The Ministry of National Development (MND) and HDB have announced another round of property cooling measures. This is primarily to cool the HDB resale market while providing more support for first-time home buyers.
This will take effect from 20 August 2024, 12.00 am where the Loan-to-Value (LTV) limit will be lowered to 75% for HDB loans while first-time home buyers will receive more housing grants.
This will be the fourth round of property cooling measures since December 2021. The Loan-to-Value (LTV) limit was previously tightened from 90% to 85% in December 2021, and then reduced to 80% in September 2022.
The changes seek to encourage financial prudence and promote a stable and sustainable market. This will affect th upcoming BTO launches in October where they will come under the new Standard, Plus, and Prime classifications.
Here’s a summary of the key changes:
- Loan-to-Value (LTV) Limit: The LTV for HDB housing loans will be lowered by 5% from 80% to 75%, bringing it in line with commercial housing loans, which remains unchanged. The LTV limit was last lowered in September 20022 from 85% to 80% as part of several cooling measures.
- Enhanced CPF Housing Grant (EHG): The EHG quantum will be increased to improve affordability for lower-to-middle income first-time home buyers, with the maximum increased to $120,000 for families, and $60,000 for singles.
Increase in Enhanced CPF Housing Grant for First-timers Buying New and Resale Flats
Introduced in September 2019, the EHG is a means-tested grant that provides additional support for lower-to-middle-income households buying new or resale flats as their first home.
Currently, eligible first-timer families and singles buying a flat can receive up to $80,000 and $40,000 in EHG, respectively. The EHG amount is tiered based on household income, with no restrictions on flat type and location.
The EHG is progressive where lower-income households receive more support for their home ownership aspirations.
Depending on monthly household income, the increase will range from $5,000 to $40,000 for families and from $2,500 to $20,000 for singles.
Lower-income households will receive the most support. Families with an average monthly household income of $1,500 and will receive the full $120,000 EHG grant, while singles with a monthly income of $750 and below will get the full $60,000 to support their home purchase.
With the revised EHG, plus the existing CPF Housing Grant and Proximity Housing Grant (PHG), first-time home buyers will receive greater help in their flat purchases (see below).
New HDB Flats
Eligible first-timer families who buy a new flat will receive up to $120,000 in EHG, on top of the significant market discount in the flat price, while singles will receive up to $60,000 in EHG.
HDB Resale Flats (Families)
Eligible first-timer families who buy a resale flat will receive up to $230,000 in housing grants, comprising the revised EHG of up to $120,000, a CPF Housing Grant of up to $80,000 and a PHG of up to $30,000.
HDB Resale Flats (Singles)
Eligible first-timer singles who buy a resale flat can receive up to $115,000 in housing grants comprising the revised EHG of up to $60,000, a CPF Housing Grant of up to $40,000 and a PHG of up to $15,000.
| Housing Grants for Eligible First-Timer Families | |||
| Grant | Current | Revised | |
| CPF Housing Grant | 2- to 4-room flat | $80,000 (last increased in Feb 2023) | No change |
| 5-room or larger flat | $50,000 (last increased in Feb 2023) | No change | |
| Enhanced CPF Housing Grant (EHG) | Up to $80,000 | Up to $120,000 | |
| Proximity Housing Grant (PHG) | Up to $30,000 | No change | |
| Total grants for resale flats | Up to $190,000 | Up to $230,000 | |
| Total grants for new flats (EHG) | Up to $80,000 | Up to $120,000 | |
| Housing Grants for Eligible First-Timer Singles | |||
| Grant | Current | Revised | |
| CPF Housing Grant | 2- to 4-room flat | $40,000 (last increased in Feb 2023) | No change |
| 5-room or larger flat | $25,000 (last increased in Feb 2023) | No change | |
| Enhanced CPF Housing Grant (EHG) | Up to $40,000 | Up to $60,000 | |
| Proximity Housing Grant (PHG) | Up to $15,000 | No change | |
| Total grants for resale flats | Up to $950,000 | Up to $115,000 | |
| Total grants for new flats (EHG) | Up to $40,000 | Up to $60,000 | |
Please feel free to reach out to me if you require any assistance with regards to the buying/selling of HDB flats or private properties.
