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In a strategic move to moderate Singapore’s public housing resale market, the government has announced new measures to tighten the maximum loan amount that home buyers can obtain from the Housing and Development Board (HDB). Starting from Tuesday, August 20, 2024, the loan-to-value (LTV) limit for HDB loans will be reduced from 80% to 75%, effectively lowering the maximum loan amount available to buyers.
This change was announced on Monday in a joint media release by the Ministry of National Development (MND) and HDB. The reduction aligns HDB loans with those offered by financial institutions, which also have an LTV limit of 75%.
This adjustment marks the fourth set of property cooling measures since December 2021, when the LTV for HDB loans was initially reduced from 90% to 85%. The LTV was further cut to 80% in September 2022, and now it has been tightened once again in response to continued price pressures in the resale market.
The government’s ongoing intervention reflects its commitment to maintaining housing affordability amidst strong demand for resale flats. Although HDB resale prices grew by 4.9% in 2023—down from 10.4% in 2022—the first half of 2024 still saw prices rise by over 4%, driven by robust demand and a tight supply of flats reaching their minimum occupation period.
In tandem with the new LTV restrictions, the government has also announced an increase in the Enhanced CPF Housing Grant, aimed at supporting first-time home buyers, particularly lower-income households. Prime Minister Lawrence Wong revealed the enhancements during his National Day Rally speech on Sunday, highlighting the government’s focus on helping families secure affordable housing.
Eligible first-time families can now receive up to S$120,000 under the Enhanced CPF Housing Grant, an increase of S$40,000 from the previous maximum of S$80,000. For eligible first-time singles, the maximum grant will increase by up to S$20,000, bringing it to S$60,000.
The grant amounts are tiered based on household income, with the highest increases allocated to lower-income families. There are no restrictions on the type or location of flats eligible for the grant, ensuring broad access to this enhanced support.
| GRANT | CURRENT | REVISED | |
|---|---|---|---|
| CPF Housing Grant | 2- to 4-room flat | S$80,000 (last increased in Feb 2023) | No change |
| 5-room or larger flat | S$50,000 (last increased in Feb 2023) | No change | |
| Enhanced CPF Housing Grant (EHG) | Up to S$80,000 | Up to S$120,000 | |
| Proximity Housing Grant (PHG) | Up to S$30,000 | No change | |
| Total grants for resale flats | Up to S$190,000 | Up to S$230,000 | |
| Total grants for new flats (EHG) | Up to S$80,000 | Up to S$120,000 | |
| GRANT | CURRENT | REVISED | |
|---|---|---|---|
| CPF Housing Grant | 2- to 4-room flat | S$40,000 (last increased in Feb 2023) | No change |
| 5-room or larger flat | S$25,000 (last increased in Feb 2023) | No change | |
| Enhanced CPF Housing Grant (EHG) | Up to S$40,000 | Up to S$60,000 | |
| Proximity Housing Grant (PHG) | Up to S$15,000 | No change | |
| Total grants for resale flats | Up to S$95,000 | Up to S$115,000 | |
| Total grants for new flats (EHG) | Up to S$40,000 | Up to S$60,000 | |
Since the introduction of the Enhanced CPF Housing Grant in September 2019, approximately 72,300 first-time households have benefited, with total disbursements exceeding S$2 billion. In the first half of 2024 alone, around 7,000 first-time households received S$204 million in grants.
Of those who have benefited from the grant so far, 40% purchased resale flats, while the remaining 60% bought new flats through various HDB sales modes, such as Build-to-Order (BTO), Sale of Balance Flats, and open booking.
The revised grant amounts will apply to first-time households who apply for a new flat from the October 2024 BTO exercise onwards, submit a resale flat application on or after August 20, 2024, or apply for an HDB Flat Eligibility (HFE) letter on or after the same date.
Despite the tighter LTV limits, the authorities emphasized that first-time home buyers, especially those from lower-income households, will be less impacted due to the significant housing grants available. Eight in 10 first-time families who collected the keys to their resale flats in 2023 used 25% or less of their monthly household income to service their HDB housing loan, often without needing to make any cash outlay.
The government remains vigilant in monitoring the property market and has reiterated its commitment to keeping public housing affordable and accessible. As MND and HDB stated, “We will continue to monitor the property market closely and adjust policies as necessary to foster a stable and sustainable property market.”
These new measures reflect a careful balance between cooling the resale market and supporting first-time buyers, ensuring that public housing remains within reach for Singaporeans.
