New: You can now listen to articles., the government announced that it would tighten the maximum amount home buyers could borrow from the Housing and Development Board . TheThe Ministry of National Development and HDB also provided more updates on the Enhanced CPF Housing Grant that Mr Wong had announced. The government raised the quantum of the EHG by up to S$40,000, with a higher distribution tilted toward the low- and medium-income families.
The last two rounds of cooling measures did not dampen the overall upward price growth in the HDB resale market, but these two measures slowed down the growth rates in the resale markets. The cumulative yearly growth rates slowed down from 12.7 per cent in 2021 to 10.4 per cent in 2022 and subsequently to 4.9 per cent in 2023. The prices could have gone out of control and caused excessive overheating in the market if the cooling measures had not been put in place.
However, headlines about such transactions, coupled with noisy information in the market , could cause undue anxiety and stir sentiment in buyers, who may have irrationally pushed up resale prices.. The 5 per cent reduction in LTV is small, but the cumulative 25 per cent upfront payment could moderate buyers' irrational sentiment and exuberance.
The lower- and middle-income families could receive up to S$120,000 in EHG when buying BTO flats directly from the HDB. They will receive a maximum grant of up to S$230,000, depending on their average monthly household income, when buying a resale flat of the two- to four-room type, which includes S$120,000 EHG, S$80,000 CPF Housing Grant , and S$30,000 Proximity Housing Grant if they live with their parents.
First-time low- and medium-income families are less likely to buy expensive flats in the resale markets, and thus, the spillover effect on the resale housing market is likely to be marginal.