National Day Rally 2015: what do the policy updates mean for you?

Are you interested in buying an HDB flat? Considering choosing between a Built-To-Order (BTO) flat and an Executive Condominium (EC)? Then read ahead, because PM Lee just announced some policy changes in the 2015 National Day Rally you should know about.

During the rally last Saturday (23 Aug), Prime Minister Lee Hsien Loong made several announcements on policy changes.

The measures taken to improve housing subsidies and affordable healthcare raised particular interest during the National Day Rally 2015 Public Forum, which was attended by 140 members of the public and was held at *Scape at Orchard Link on Thursday night (28 Aug).

For a summary of the highlights of the changes announced during the NDR, below is a cheatsheet of what the housing-related policy changes are about and what they mean for you.

Read this first if you’re having trouble with understanding what the fuss over the NDR announcements is all about.

What is the National Day Rally?

The National Day Rally is an annual address that the Prime Minister of Singapore makes to the nation. The topics of the speech range from commemorating accomplishments, addressing key challenges and the nation’s future directions. As public housing plays such an important role in the lives of Singaporeans it naturally is a key topic in the Prime Minister’s speech.

What policy changes were made?

This year, the blockbuster policy changes revolved around two income ceiling increases to allow more Singaporeans to apply for public housing. Firstly, for BTO flats the income ceiling is raised from S$10,000 to S$12,000. Secondly, for ECs the income ceiling has been raised from S$12,000 to S$14,000.

Relatedly, the CPF special grants have been raised by S$20,000 and extended to also cover the households making between S$6,500 and S$8,500.

If your household earns S$14,000 and above

Unfortunately, the income ceiling has been capped at S$14,000 and you’re still earning too much to buy an HDB flat or EC.

If your household earns between S$12,000 to S$14,000

You’re eligible to buy an EC now! (But you are still earning too much to get any substantial grants.)

The government raised the income ceiling for ECs from S$12,000 to S$14,000, leading to approximately 93,600 households to join the ranks of the eligible. This upps the total households eligible for ECs to a little over 900,000 households. That’s over two-thirds of Singaporeans!

If your household earns between S$10,000 to S$12,000

You too are still earning too much to get any substantial grants – but Score! you’re now eligible to buy BTO!

If your household earns between S$6,500 and S$8,500

You are now eligible for CPF special housing grants, which can run up to S$20,000!

If your household earns less than S$6,500

You can now get much higher CPF special housing grants, which can run up to S$40,000, double of what it used to be!

If your household makes less than S$2,000

you can get a total of grants up to S$ 75,000 (for households making less than S$1,500) and S$80,000 (for households making less than S$2,000). To put that in perspective, In May this year 2-room BTO’s in Eastlink@Canberra were selling at S$75,000. It thus follows that your grants can cover at least 95% of the total selling value, and if you pay the other 5% with your CPF savings it basically means you get a house for free – kind of!

The full table detailing all the numbers can be found below:

So how would this affect the market?

In total a little over 200,000 people have instantly been made eligible for public housing, about half for ECs, and the other half for BTOs. Let’s say at least half of the 100,000 that have now been made eligible for ECs will try their luck in the public housing market, that would mean a substantial shift of potential buyers moving out of the private market. We may then well see the soft private housing market continue to slump, especially in the lower price segment!

Check out the infographic below for more HDB housing- and family-related policy changes announced during the NDR 2015:

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If you enjoyed this article, check out 99.co’s guides: Should Singapore singles apply for HDB flats? and Property types in Singapore for Dummies (Infographics).