Mortgage crisis creates ghost town

Mortgage crisis creates ghost town


US neighbourhood’s dream becomes nightmare as lending disaster stirs the perfect storm


CLEVELAND (OHIO) – THE streets are empty. Trash rustles down the road past rusted barbecues, abandoned furniture, sagging homes and gardens turned to weed.


This is Mount Pleasant, a neighbourhood in south-eastern Cleveland ravaged by the sub-prime mortgage crisis roiling the United States.


Faded ‘For Sale’ signs sit in front of deserted houses. The residents are gone, most after being evicted for missing their mortgage payments.


A red, white and blue American flag flies over windows and doors that have been boarded up to keep drug dealers away. Thieves have stripped many homes of the plumbing, the doors, the windows, the aluminium siding.


Mr Sarah Evans, 60, is one of the last people left on the street. And she is on the verge of losing the two-bedroom house in which she has lived for more than 30 years because she simply cannot afford her monthly payments.


It is a complicated story. She refinanced in 2003 but did not realise the document she signed included provisions to radically increase the interest rate. She stopped making payments in 2006 and shows her unpaid bills totalling US$24,000 (S$34,200). Her bank is in the midst of eviction procedures.


‘When folks buy a home, they expect to die in it, I guess,’ she said, as she stood outside in the cold. ‘I had my American Dream, but it became a nightmare.’


Ms Laura Johnston, 50, said her street – about 10 minutes away by car – was alive two years ago. Today, half the houses are abandoned.


‘I’m very upset. I missed my friend, Helen. She disappeared overnight. She did not even say goodbye.’


For county treasurer Jim Rokakis, the greed of the banks is to blame for this man-made disaster. ‘All you needed was a pulse to buy a house. Some loans were written with no money down, no proof of buyer’s incomes. Most of those folks were jobless,’ he said in an interview.


The Mount Pleasant community, he said, ‘was the perfect storm: poor folks, unemployed and a desire to get a piece of the American Dream’.


Source: Straits Times

KepLand to delay home launches; posts sterling gains

KepLand to delay home launches; posts sterling gains


Developer confirms it is pushing back sales of projects by two to three weeks each


By Fiona Chan


KEPPEL Land (KepLand) has confirmed it has pushed back the launch of Marina Bay Suites and will be slightly delaying other launches in Singapore this year.


This comes amid recent wild swings in stock markets as fears mount over the fallout of the sub-prime mortgage crisis and a possible United States recession.


KepLand group chief executive Kevin Wong also cast some uncertainty on how Singapore’s luxury home segment – which had led the market boom until recently – will perform this year, saying it depends on the sub-prime outcome.


But he added that prices of mid-tier and mass market homes are expected to ‘continue to go up steadily’.


Marina Bay Suites – which Keppel is developing together with partners Cheung Kong Holdings/Hutchinson Whampoa and Hongkong Land – falls into the high-end homes category.


The 221-unit condominium was initially scheduled for launch last Friday, but Mr Wong said the consortium came to a ‘consensus’ to delay the launch until after Chinese New Year, ‘after bonuses’ and ‘when people get their hongbao’.


‘There is some rationality to pushing it back,’ he said yesterday. ‘During the Chinese New Year break, people go away.’


KepLand has five other projects to launch this year but these will be pushed back due to the Marina Bay Suites delay, as the developer wants to ‘stagger’ its launches, added Mr Wong.


But he emphasised that the delays – of only ‘two or three weeks’ for each project – are ‘not material’.


The other projects include 400 units in Reflections at Keppel Bay, which are scheduled to start being sold in ‘the middle of the year’, Mr Wong said.


KepLand also plans to launch 52 units in Park Infinia at Wee Nam, 15 units in The Crest @ Cairnhill, 34 units in The Tresor at Duchess Road and 56 units in Madison Residences in Bukit Timah Road.


The group yesterday posted a sterling set of results, due to good sales in projects such as The Suites at Central and Belvedere in Singapore; Villa Riviera in China; and Elita Promenade in India.


Net profit for the fourth quarter ended Dec 31 surged seven times to $572.3 million, largely due to a $388.2 million gain on revaluation of investment properties. Revenue rose 8.6 per cent to $371.4 million.


Earnings per share for the quarter soared to 79.5 cents, from 11.3 cents a year ago.


For the full year, net profit more than trebled to $779.7 million while revenue climbed 48.5 per cent to $1.4 billion.


Net asset value per share was 3.18 cents as at Dec 31, from 2.21 cents a year ago.


KepLand is declaring a total cash dividend of 20 cents for the year, consisting a final dividend of eight cents and a special dividend of 12 cents.


Source: Straits Times

$450m shopping mall to add to Tampines bustle

$450m shopping mall to add to Tampines bustle


With two other malls, it will make town hub an even stronger shopping destination


By Joyce Teo


THE popular suburban haunt of Tampines is set to get a fresh injection of retail buzz when a new $450 million mall, now under construction, opens for business early next year.


The arrival of Tampines 1 on the scene will alleviate a shortage of shopping space in the crowded town hub, where rents in two existing malls have risen over the years, industry sources say.


The new mall’s manager has already signed up anchor tenants. It is now 40 per cent leased and is expected to be fully leased by May, said AsiaMalls Management (South East Asia).


Located beside the Tampines MRT station, it will complement two existing malls, CapitaMall Trust’s Tampines Mall and Asian Retail Mall Fund’s Century Square.


Tampines 1, due for completion later this year, sits on a 91,000 sq ft site and has shops spread over five storeys and one basement. It will have 203 carpark lots.


The mall has a net lettable area of 260,000 sq ft, which makes it smaller than Tampines Mall’s 323,000 sq ft but bigger than Century Square’s 210,000 sq ft.


When combined, the three malls will make Tampines an even stronger shopping destination, according to Knight Frank’s deputy managing director, Mr Danny Yeo.


Popular suburban malls, such as those in Tampines, can command relatively steep rents due to their high levels of traffic.


This trend is growing now that the Housing Board has stopped building neighbourhood shops, as shoppers prefer to frequent bustling suburban malls, said Mr Yeo.


He added that ground-floor rents in Tampines suburban malls could fetch between $35 and $50 per sq ft (psf) a month.


That range is relatively high for outlying shopping centres, given that ground-floor rents in main shopping malls along the Orchard Road shopping belt go for about $45 to $70 psf on average.


While Tampines 1’s anchor tenants may be familiar brand names, such as Cold Storage, the mall will strive to be different by bringing in new retail concepts to tie in with its ‘young, savvy and lover of all new things’ theme.


One of them is a fitness club and spa that will come complete with a swimming pool.


The BEYS fitness club and spa by the Amore Fitness group will take up about 17,500 sq ft of space on the fifth floor.


Cold Storage supermarket, which will be fitted out to the tune of $3 million, will occupy almost 14,000 sq ft of the basement.


This outlet will focus on high-quality fresh food and offer more than an ordinary heartland supermarket, said the mall manager.


For instance, it will have the largest range of smoked salmon and Alaskan seafood and will offer ready-to-eat steamed lobsters and shucked oysters.


Times The Bookshop is another key tenant, while Challenger, the information technology superstore, will take up 6,100 sq ft on level four.


Challenger used to be a tenant at DBS Tampines Centre that, together with Pavilion, have been torn down to make way for the upcoming mall.


Asian Retail Mall Fund II bought the two sites for nearly $289 million. Its total investment in the mall has reached $450 million, including land cost.


Apart from new retail concepts, Tampines 1 will also offer new architecture elements, such as a European-inspired Sunken Plaza and double-floor retail shops, said the mall’s assistant general manager, Ms Stephanie Ho.


One of these duplex units – on levels four and five – will be taken up by Japanese restaurant chain Sushi Tei.


Source: Straits Times

S’pore only nation with high growth, job creation

S’pore only nation with high growth, job creation


Lim Swee Say cites Economist report; NTUC to help 8,000 unemployed workers get jobs




SINGAPORE was the only country in the world to post high economic growth and low unemployment in 2007. The labour movement here wants Singapore to at least keep up with this achievement in 2008, as it unveiled its work plan yesterday for the new year.


Despite global uncertainties and the threat of a recession in the United States in 2008, Lim Swee Say, secretary-general of the National Trades Union Congress (NTUC), said that the strong economic gains made in the past few years have built up a healthy pipeline of jobs to provide some buffer against a global downturn and carry workers through the year.


He noted that Singapore has continued to take in foreign workers, indicating that there are more than enough jobs to go around for all.


‘We are in a much better position than many countries,’ Mr Lim told reporters at a press conference.


Earlier, in an address to unionists, the NTUC chief cited a study reported in The Economist, which showed that out of 56 countries, including fast-growing economies like China and India, Singapore was the only one in 2007 to have achieved high economic growth and created enough jobs for its workers.


China, which probably chalked up the world’s highest economic growth of 11.5 per cent in 2007, has an unemployment rate of 9.5 per cent. Some 25 countries, among them India, Indonesia, Malaysia, Hong Kong and South Korea, fell into this category of high growth but insufficient jobs last year.


Another 25 countries, including the United States, Japan, Germany and Taiwan, were marked by low economic growth but high unemployment. Five countries, among them Norway, Thailand and Switzerland, while low in economic growth, were able produce plenty of jobs.


‘Singapore did exceedingly well in 2007,’ said Mr Lim who is also Minister in the Prime Minister’s Office.


On the labour union front, he ticked off the lowest number of lay-offs since 1993; a sharp drop in worker grievances; the biggest pay rise in three years; and a 17-year-high bonus of 4.42 months’ salary.


According to Mr Lim, to help keep unemployment low this year, the NTUC will work closely with the government and employers to find work for some 8,000 jobless workers, up from 7,757 in 2007.


Through various employment-help programmes like Job Re-Creation, Place and Train and Careerlink, the labour movement hopes to place some 7,000 unemployed.


It will also help another 1,000 mature professionals, managers, executives and technicians under the Professional Conversion Programme to shift to new careers in logistics, tourism and call centres.


The NTUC also wants to raise the employment rate through re-employment, re-deployment and back-to-work initiatives. Specifically, it wants to help mature Singaporeans to stay employed; workers hit by business restructuring to keep their jobs; and housewives who want to return to work.


In all, the NTUC is setting its sights on 8,000 Singaporeans in this category, up from 4,311 in 2007.


Lastly, the labour movement wants to extend its help to those who are under-employed – those working but earning low pay. It will help them boost their skills and secure better jobs and better pay.


Source: Business Times

Market conditions delay Marina Bay Suites launch

Market conditions delay Marina Bay Suites launch


KepLand targets after Chinese New Year, but within first quarter




(SINGAPORE) The launch of Marina Bay Suites has been postponed, with ‘market conditions’ cited as the cause by Keppel Land group chief executive Kevin Wong.


The news comes as a surprise as the consortium developing it – Keppel Land, Cheung Kong Holdings/Hutchinson Whampoa and Hongkong Land, had earlier said that the launch would be around end-January, before the Chinese New Year.


The consortium also said then that over 600 potential buyers, half of them foreigners, had registered their interest in buying into the 221-unit luxury development, priced at around $3,000 psf.


However, at a press conference to announce the company’s full-year financial results yesterday, Mr Wong said that the launch would now be after the Chinese New Year – within the first quarter of 2008. He also said that units would be ‘progressively released in tandem with market conditions’.


Keppel Land’s other launches, including the next phase of Reflections at Keppel Bay, The Tresor and Madison Residences, will all be staggered to follow the launch of Marina Bay Suites to ensure that they do not coincide.


For Reflections at Keppel Bay, which has 400 units remaining, Mr Wong said that its launch would be around mid-2008.


Adopting the cautiously optimistic tone already shared by other developers, he said: ‘If everything picks up in the second half of the year, then we will be back in business.’


His announcement follows Wing Tai deputy chairman Edmund Cheng’s comment on Monday that it would monitor global markets ‘to see how things pan out before we launch anything’. Wing Tai projects that have yet to be launched include Belle Vue Residences and L’Viv.


Earlier this month, City Developments also said that depending on construction schedules, and if the opportunity arose, it could consider short-term leases for Lucky Tower, which it acquired through a collective sale in May 2006.


Keppel Land’s Mr Wong does expect prices in the high-end sector to be affected if a recession takes hold of the United States economy. ‘But we expect mid to mass-market prices to go up steadily,’ he added.


Mr Wong, who said that Keppel Land saw a default rate of about 5 per cent on its projects during the last property slump in the mid-1990s, added: ‘There will be some (if there is a recession in 2008) but the percentage will be fairly low.’


Commenting on the postponement of the Marina Bay Suites launch, Knight Frank director (research and consultancy) Nicholas Mak said that ‘developers are all watching each other now, but someone has to take the plunge first to test the water’.


‘Because of the thin volume at the moment, the market is looking for direction. But we must bear in mind that the volume and price increases in 2007 was out of the ordinary.’


Mr Mak also highlighted that developments with licences to sell will increase as the year progresses. ‘If developers wait for prices to go up, everybody could be launching at the same time.’


Source: Business Times

Beating inflation at its own game

Beating inflation at its own game


Invest at least 15 per cent of your income, control your expenses and hold assets that act as hedges against general price increases




INFLATION is commonly taught in business classes as a situation where demand exceeds supply. For instance, office rents in Singapore have gone up because there is a lack of supply and an increase in demand. Students, though, might not be as concerned about inflation as their parents, who have to cope with rising bills.


Singaporeans today are feeling the impact of inflation on their standard of living. With oil prices breaching US$100 per barrel, it is likely that inflation will continue to rise. The high price of oil is behind the rising cost of transport, electricity bills and food.


As a financial adviser, I find that clients these days inevitably bring up the topic of inflation. After listening to their laments, my advice to them is, first, take a deep breath and relax. However high inflation may be today, this is not the 1970s.


Before we discuss what an individual can do to lessen the impact of inflation, let’s look at it from the macroeconomic perspective. Central banks of Western countries, for example, the Bank of England and the US Federal Reserve, use interest rates as part of their monetary policy to control inflation. As inflation goes up, interest rates also rise to counter inflation. Borrowers may be stretched servicing loans as the interest rate rises. On the other hand, as base rates increase, the returns on savings should improve. Hence, people will borrow and spend less, and save more.


But Singapore’s central bank, the Monetary Authority of Singapore (MAS), does not use interest rates to fight inflation; instead, it uses the strength of the Singapore dollar.


The reason is that Singapore is a small and open economy that imports most of its food and fuel. With a strong Singapore dollar, we pay less when importing goods from overseas. So, Singapore’s monetary policy is to maintain an appropriate level for the Singapore dollar with reference to a trade-weighted basket of currencies.


Singapore‘s interest rates are determined by supply and demand. The MAS does not directly control the movement of interest rates as they are set by the financial institutions independently. That means that even if inflation is high, the savings rate does not necessarily move in tandem. That’s why our savings rate remains low despite higher inflation.


Unfortunately, individuals have little control over inflation, which can creep up and diminish the value of savings over time.


But don’t fret. If you think about it, you’ve probably already hedged some of the higher costs without even realising it. According to the online research house Global Property Guide, Singapore’s residential market was the world’s hottest in 2007. It rose 24.3 per cent after adjusting for inflation (2.66 per cent), ahead of bullish markets like Shanghai and Bulgaria.


The majority of Singaporean households own their homes so even if you don’t consider your house an investment, it has helped to hedge your family against rising prices.


And while prices have gone up, earnings have also increased, in some cases, at a faster clip than inflation. If you happen to have skills that are in demand, you could command higher earnings. All this shows that the effects of inflation are being mitigated.


For lower income families and retirees, the government is offering help through the goods and services tax (GST) offset and other rebates. For essential items, NTUC FairPrice and other supermarkets are finding new sources of supply and offering house brands that can keep costs down.


But the best way to mitigate inflation is to have a proper investment strategy. Investing in quality, blue chip stocks has traditionally been the best long-term way to beat inflation. The only problem is that if inflation becomes a major impediment to economic growth, the stock market will most likely suffer too. One way to lessen that risk is to stick with big, blue chip companies which, by virtue of their size, have more pricing power than small companies. Moreover, because they have been beaten down and overlooked, large, blue chip stocks have the least room to fall should inflation threaten the equity market.


Another way is to consider investing in natural resources funds. While most people find it difficult to understand why gold prices have soared, it’s easy to see why oil prices have shot up. Demand for oil is strong, and supplies are limited. The strength of the global economy, coupled with the difficulty in constructing new refineries, has led many market watchers to believe that energy prices will remain high for some time.


With a global boom in commodities, the staple ingredients of a modern economy, many experts see a fundamental shift in the market. For example, the price of wheat and soy beans rose 70 per cent in 2007, while prices of gold, silver, lead, uranium, cattle and cocoa are all at or near record levels. This is not a temporary situation, so any investment in this area will probably give you some hedge against inflation. All these strategies, however, call for proper asset allocation.


The chart shows how gold, mining, energy and commodities performed in the last year. All of them proved to be highly correlated. However, they are not as correlated to the stock market. Exposure to any of these sectors would have provided you with some form of protection against inflation.


But if you think that the above is too complicated, consider this basic strategy. First, save and invest at least 15 per cent of your annual income. Second, control your expenses in any way possible. Third, buy and hold assets that historically have been hedges against inflation. Lastly, understand that inflation is difficult to quantify, and that your personal experience will differ from others.


Ultimately, there is no substitute for awareness of the effects of inflation and being prepared to face it squarely. Individuals must also know the importance of inflation-beating assets and make them part of their overall portfolio.


Ben Fok is Chief Executive Officer, Grandtag Financial Consultancy (Singapore) Pte Ltd

He can be reached at ben.fok@….


Source: Business Times

Condo site facing reservoir launched

Condo site facing reservoir launched




THE Housing & Development Board (HDB) has launched the tender for a 99-year-leasehold site at the corner of Yishun avenues 1 and 2 that fronts Lower Seletar Reservoir and is near Singapore Orchid Country Club/Golf Course.


The plot, which is about 10 minutes’ walk from Khatib MRT Station, is expected to fetch bids in the range of $200-$300 per square foot (psf) of potential gross floor area, property consultants say.


The 2.7 hectare site has a 2.1 plot ratio, allowing a maximum gross floor area of 609,163 square feet, enough for a condo with about 500 apartments averaging 1,200 sq ft.


CB Richard Ellis executive director Li Hiaw Ho said that a condominium on this site would be able to enjoy scenic views of the reservoir and golf club.


As the suburban market is expected to strengthen this year, Mr Li expects the site to draw keen interest from developers.


‘Demand is likely to come from Housing & Development Board flat upgraders and people who work in the northern part of Singapore. Units in Orchid Park Condominium nearby are being sold in the secondary market at around $550 psf, while new freehold units in the vicinity such as The Sensoria and Northwood were sold at prices ranging from $600 psf to $650 psf.


‘Based on a selling price of $600 psf to $650 psf, it is expected that the tender bids for the site will range from $200 to $240 psf per plot ratio.’


Credo Real Estate managing director Karamjit Singh places the fair value of the plot even higher, at $280-$300 psf ppr, and reckons that the top bid may surpass that, given the plot’s attractions. Assuming this higher price range, the breakeven cost for a new condo would be around $600-$610 psf and the project is likely to command an average price in the high-$600 psf range, he added.


The tender closes on March 25. It is part of the confirmed list, under which the government launches land parcels for tender according to a pre-stated schedule regardless of demand.


Source: Business Times

Rate cuts alone won’t do the trick

Rate cuts alone won’t do the trick


SOME time tonight, Singapore time, the United States Federal Reserve is scheduled to decide once again on the adjustment of the benchmark Fed funds rate. Even though it made an unscheduled, surprise cut of 75 basis points a week ago, market participants want and expect more at today’s meeting. Most observers forecast that the Fed will cut another 50 basis points, which would bring the Fed funds rate to 3 per cent. They may well be right, but there is a good chance that another rate cut, while arguably necessary, will not be sufficient to lift the stock markets – at least not sustainably. Last week’s 75 basis point cut didn’t manage to achieve it, and there is no reason to suppose that another one will.


It is becoming increasingly apparent that rate cuts alone – no matter how aggressive – are not the sole answer to the current problems of the US economy. The White House and Congress appear to have worked out a US$150 billion fiscal package. Even assuming this will put sufficient spending money into the right people’s pockets at the right time – which has been questioned – this, too, is unlikely to be sufficient to either avert a downturn of the real economy or restore stability to the financial markets. What is becoming increasingly clear is that the root of the problem lies in the badly impaired capital positions of US financial institutions. We know that they are exposed to substantial amounts of asset- backed securities and other instruments that are now shunned by the markets and are difficult to value (which leaves unknown their total potential liabilities). To repair their capital positions, these institutions are taking in huge investments from sovereign wealth funds and other entities, as well as doing aggressive write-downs.


While this repairing of balance sheets is constructive, there remain serious uncertainties: How much more will we see in write-offs? Which institutions are most exposed (or, as one economist put it, ‘where are the bodies buried’?) To what extent has the contagion from toxic sub-prime securities spread to other areas of banks’ lending portfolios, such as higher-quality mortgages, credit card debt, auto loans, corporate loans and leveraged buyouts? The answers to these questions are unknown, and unfortunately unknowable, until we are clear about the extent to which the US housing market will correct and how US consumers will react. The problems of the monoline bond insurers, which are being downgraded by credit rating agencies, pose serious additional risks, as much of the debt they have insured then has to be re-rated. This might require banks to raise even more capital.


In the face of these uncertainties, the effectiveness of rate cuts – while no doubt helpful in making liquidity more cheaply available – will be akin, as the economist John Maynard Keynes put it, to ‘pushing on a string’.


Thus while the Fed’s likely forthcoming rate cut will be welcome, it is unlikely to calm the markets more than temporarily. That will require larger initiatives of a regulatory nature designed to recapitalise US financial institutions on a large scale – and to do it quickly and credibly.


Source: Business Times




The Electric New Paper :


More families exceed income limit set 14 years ago. Households earning $8,000 or more a month




If your household earns more than $8,000 a month, it’s…


·  No new HDB flats


·  No subsidised housing loans


·  No maximum $40,000 grant to buy resale flats


IT’S been 14 years since the HDB last raised its income ceiling for new flats from $7,000 to $8,000.


By Desmond Ng



30 January 2008


IT’S been 14 years since the HDB last raised its income ceiling for new flats from $7,000 to $8,000.


Many things have changed since 1994 – isn’t it time for the ceiling to shift too?


Data from the General Household Survey shows that the proportion of resident households earning $8,000 and above every month has nearly doubled from 10.85 per cent in 1995 to 19.9 per cent in 2005.


This means that the proportion of households qualifying to buy new flats shrank by roughly 9 percentage points.


Flat values have also jumped since then.


Consider this. Back then, a new four-room HDB flat in Woodlands would cost you about $96,000, compared to $183,000 for a new four-room unit at nearby Yishun today.


Home-buyer Seline Wee, 29, wants the ceiling to be raised.




Ms Wee, a teacher, is getting married to her auditor boyfriend next year.


She said: ‘Our combined income is just slightly above the $8,000 ceiling and we feel we’re being penalised for it.


‘Now we can’t buy a new flat and we’ve to dig deep for either a high-priced resale place or condo, which means possibly spending beyond our means.


‘The income ceiling rule has not been changed for so long but income levels and property prices have increased since then.’


A household earning above $8,000 a month also cannot get subsidised housing loans and housing grants of up to $40,000 to buy resale flats.


Knight Frank’s research director Nicholas Mak thinks the policy should be reviewed regularly because of inflation, the increase in income and property prices.


He explained: ‘This ceiling has to be reviewed regularly or otherwise you’re cutting out a certain proportion of the population who can make use of the subsidy.


‘On one hand, the Government is restricting the amount of CPF you can spend on housing. On the other hand, they’re keeping the income ceiling low, and preventing some in the sandwich class who don’t want to over-invest in property from buying new flats.’


Mr Sing Tien Foo, deputy head of the NUS’ department of real estate, said that the income ceiling is an eligibility measure to make sure Singaporeans can afford public housing.


To lift this cap, the Government has to look at market conditions and see whether public housing has gone beyond the affordability of Singaporeans.


He said: ‘A solution would be a discreet review. If income levels have gone up, is it only applicable to certain groups? And is this change in income cyclical or a permanent structural change?’


Lifting the cap may have widespread effects, he added.


‘How big is this sandwich class? By lifting the ceiling, the demand for new flats may surge and their prices may be adjusted higher.


‘The resale market will also be affected. Is that the best solution?’ he asked.


While some may argue that executive condos (EC) fulfil this niche with its $10,000 ceiling, Mr Mak said that these sites tend to be fewer in number.


HDB announced that there would be a supply of 7,000 new flats available from last November to June this year.


And another 3,200 flats will be built under the Design, Build and Sell Scheme (DBSS) and EC schemes.


Mr Eric Cheng, executive director of HSR Property group, thinks that $8,000 is a fair gauge because those earning more than that can easily afford private property.


Based on a couple’s combined income of $8,000, they can easily buy a $700,000 private property on a 35-year loan.


He calculated that the monthly instalment of around $2,300 would be quite affordable.


‘If you bring the ceiling higher, there’ll be increased demand for new flats and the resale market will be affected. Now, the resale market is quite balanced,’ he said.


The Housing Board said it has no plans to raise the income ceiling now as the vast majority of Singaporean families qualify for subsidised public housing.


Said a HDB spokesman: ‘At the current $8,000 income ceiling, about 8 in 10 Singaporean families are eligible to buy subsidised public housing.


‘Given our limited public housing budget, it is important that we target our housing subsidies to those who need it most.’


HDB said that higher income households exceeding the income ceiling have other housing options, including the purchase of resale HDB flats, which are not subject to any income ceiling.


And first-timer families with household incomes of up to $10,000 can also consider buying new EC units with a housing grant of $30,000.


Source: The New Paper