New Property Cooling Measures in Singapore

Overview

• Singapore's Housing Development Board (HDB) is tightening loan limits effective August 20th to cool the resale market.
• Enhanced financial support for first-time buyers in lower-to-middle income brackets.
  • Increase in Enhanced CPF Housing Grant (EHG).
    • From $80,000 to $120,000 for families.
    • From $40,000 to $60,000 for singles.

Changes to HDB Loan Limits

• Loan-to-value limit for HDB loans reduced from 80% to 75%.
• Aligns HDB loan limits with those of financial institutions.
• Promotes prudent borrowing and housing affordability.

Context and Rationale

• Continuous rise in HDB resale prices since Q2 2020.
  • Example: A 5-room flat sold for $1.726 million in July.
• Previous measures reduced price growth from 10.4% (2022) to 4.9% (2023).
• Continued strong demand and some supply tightness in 2024.
• Measures aimed to stabilize the market further.

Financial Support for Lower-Income Buyers

• Significant housing grants:
  • Families: Potential up to $230,000.
    • Revised EHG, CPF Housing Grant, and Proximity Housing Grant (PHG).
  • Singles: Potential up to $115,000.
    • Revised EHG, CPF Housing Grant, and PHG.
• EHG increase varies by income:
  • $5,000 to $40,000 increase for families.
  • $2,500 to $20,000 increase for singles.

Impact and Implementation Details

• Revised loan limits apply to applications from August 20 onwards.
• HDB Flat Eligibility letters will be updated automatically.
• First-time buyers pending completion of resale transactions will receive additional grants.

Affordability and Government Commitment

• Resale flats remain affordable for most:
  • 8 in 10 first-time families used 25% or less of income for loans in 2023.
  • Little or no cash outlay needed.
• Very high-price transactions are a minority.
• Commitment to public housing affordability and accessibility.
• Ongoing market monitoring and policy adjustments planned.