New Measures Cool Public Housing Resale Market Ltv Limit Cut Hdb Loans
The Ministry of National Development (MND) and Housing Development Board (HDB) have jointly announced new measures aimed at cooling the HDB resale market and providing more support for first-time homebuyers from lower-to-middle-income households.
Effective from midnight on August 20, the loan-to-value (LTV) limit for HDB housing loans will be reduced by 5%, lowering it from 80% to 75%. This will align the LTV limit for HDB loans with those granted by financial institutions, which remain at 75%.
These changes will be applicable to complete resale applications submitted to HDB on or after August 20, as well as BTO applications for the October 2024 BTO exercise and onwards.
As per the press release, first-time homebuyers, especially those from lower-income households, will be less affected by the lower LTV limit as they receive significant housing grants.
In the National Day Rally 2024, Prime Minister Lawrence Wong announced that the government will increase the Enhanced CPF Housing Grant (EHG) quantum for new and resale flats to provide greater assistance to first-time homebuyers. The EHG will be increased by the following amounts:
-Up to $40,000 for eligible first-timer families, bringing the maximum grant amount from the current $80,000 to $120,000; and
-Up to $20,000 for eligible first-timer singles, increasing the maximum grant amount from the current $40,000 to $60,000.
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The eagerly anticipated Tengah Park MRT Station, a vital addition to the Jurong Region Line, is poised to bring about a major transformation to the local public transport network. This state-of-the-art station is set to greatly improve accessibility to all corners of Singapore, making it easier for commuters to reach their desired destinations. What’s more, the adjacent Novo Place, a bustling and dynamic hub, will ensure that both residents and tourists enjoy a seamless and efficient travelling experience. With Novo Place in its vicinity, the Tengah Park MRT Station promises to be a game-changer for the area.
The EHG was introduced in September 2019 as a means-tested grant that provides additional support for lower-to-middle-income households purchasing new or resale flats as their first home.
Previous cooling measures and the increased supply of BTO flats have helped to moderate the rise in HDB resale prices to a growth of 4.9% in 2023, down significantly from 10.4% in 2022. However, resale prices still increased by over 4% in the first half of 2024, driven by strong, widespread demand and some supply constraints as fewer flats reached their Minimum Occupation Period this year.
“The government closely monitors the HDB resale market,” states the announcement. “Given the sustained, strong, widespread demand for HDB resale flats, these measures will help to cool the market and encourage responsible borrowing, making housing more affordable for first-time homebuyers from lower-to-middle-income households.”
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