SINGAPORE : A higher income ceiling to qualify for new HDB flats will be good news for first-time home buyers.
This is according to property analysts who said that the move will also benefit the sandwiched class most.
Early this week, National Development Minister Mah Bow Tan hinted that the income ceiling for new Build-To-Order (BTO) flats could be raised to S$10,000 after the General Election (GE).
Analysts have welcomed the plans to raise the income ceiling for new HDB flats, which has been S$8,000.
Mohamed Ismail, chief executive officer of PropNex, said: "I think probably the ground has given a very strong signal and an indication of the sandwiched class of people stating that, 'Hey, (with) the ceiling at S$8,000, we are neither here nor there', and especially now because the younger generation are getting married much later. So on that basis, I think it is overdue and at this juncture, it is really welcome."
Should the new income ceiling be in place, first-time home buyers who earn over S$8,000 but less than S$10,000 will be allowed to book BTO flats.
At the moment, they can only buy flats under the Design, Build and Sell Scheme (DBSS), Executive Condominiums (ECs), from the resale market and also buy private apartments.
Eugene Lim, key executive officer, ERA Realty Network, said: "The gripe with this class is that they can't buy the most affordable housing in Singapore, they are forced to buy at a higher price, which puts a strain on them financially. I think this group of people will be very happy with this new policy."
BTO flats, which are between S$300,000 and about S$500,000, are said to be the most affordable housing in Singapore.
Their prices are lower compared to DBSS flats - which range from S$500,000 to S$750,000 - and ECs - at between S$750,000 and S$950,000.
Analysts said the higher income ceiling for new flats is not likely to have a significant impact on the overall property market, given that the sandwiched class is only a small part of the property market.
But some said the resale HDB market could still be marginally hit.
Mr Lim said: "We will probably see that some of the buyers who currently buy from the resale market will move to BTO flats because there is always a preference for the new over old.
"Because (if) you are buying a resale flat, you are buying old flats but at higher prices. So now you are buying new flats at subsidised prices, then why not?
"So they will probably make adjustments to their plans to buy these BTO flats. Because when you buy BTO flats, you still have to factor in the three-year construction period."
Some analysts said they do not see any immediate impact of the move on the property prices in the HDB resale market, saying that there is an eight-year gap before any of the BTO flats become eligible for resale.
This year, the HDB is looking to build around 22,000 flats under the BTO scheme - the largest supply in recent years.
National Development Minister Mah had said that the review of the income ceiling is likely to be conducted after the GE and will be completed within six months.