HDB Magic

Recently Minister of Finance created internet buzz with his sincere statement that with the special subsidies, families with household income of $1000 per month CAN buy a 2-room HDB flat (emphasis mine). He was not kidding. It really can be done. Refer to the link Special Housing Grant and scroll to the bottom. This scheme gives those with family income of $1500 or less $20k grant. There are conditions of course. Some of these are:


  • You or your spouse must be in continuous employment for one year before the flat application
  • You can only apply for this once
  • You can only buy a 2 room flat direct from the HDB and your flat must be situated in a non-mature estate.


Since the applicant who qualifies for the Special Housing Grant also qualifies for the Additional Housing Grant, the lucky bloke is now eligible to a total of $60k in grants. Using the example cited in the page that explains the Special Housing Grant, it appears that low income families can buy a flat, and still have a little left over in their CPF ordinary accounts every month! Wow! Sounds so good – but is it really?


  1. The conditions stipulate one-year continuous employment. This in itself can be a challenge. How many who fall in this category are really temporary workers who get paid only when they get work?
  2. Their options of flats are extremely limited. Punggol offered 158 units and Sengkang 100 units. To purchase a 2 room unit, family income must not exceed $2k a month. Those who qualify are those who are downgrading, and retirees. Do not forget Tharman is now proposing a new scheme for retirees to fund their retirement and healthcare through downgrading. Given the increasing no of elderly people, there is going to be competition.
  3. Since these are new flats, it will take several years before completion. In the meantime, they might well continue to have housing issues.
  4. Like everybody else, their CPF contributions will almost be entirely used for the monthly mortgage repayments. Should they be retrenched, or should something untoward happen, and they lose their jobs because of health issues for instance, these people will be particularly vulnerable, and will find keeping up with payments difficult.


Still, this is way better than being homeless. It is not easy to get rental flats either, and should they have to rent, money comes out of their cash earnings – something that they can ill afford. So I do applaud the government for trying to make it possible for low income families to have a property of their own. However, I do not appreciate being patronized.


It is possible for low income families to own their properties. I have no figures as to the probability of any one such family getting a flat. Is it similar to a win through betting on

a)      a horse, b)the sweepstakes or c) toto?

I can be a millionaire too – just buy a lottery ticket. What are the chances of my win is the question. So a statement such as “he can own a small flat” is meaningless without a projection of likelihood, and time frame.


Has anyone considered other expenses that he might incur through owning such a property? Renovation is necessary, since it is a new flat. That will mean a cash outlay. Furthermore apart from the usual household bills, having to live in a non-mature estate is likely to see, say, an increase transport costs. Low income families are vulnerable to even slight variances in costs.


We are also told that as we get older, we will eventually be able to “unlock” the cash values of our homes for retirement and healthcare. For how long can this go on, given the current prices of BTO prices? At the rate we are going, it looks like the first home will have to be a small home for most. What downgrading will there be thereafter?


My bone of contention is not with my ministers trying to help those with low incomes to own their homes. My angst is against the patronizing way my ministers have of telling me that they have the solutions. Because they have not, at least not in totality. The issue with the low income finding it difficult to own homes does not originate with the subsidies or lack thereof. It is the result of poor wages, high costs of living, and extremely pricey public housing.


Someone commented on facebook under this very topic: Why are there families with household incomes of only $1000 in the first place? That indeed is a valid question. When facing questions on the lack of affordability, we need assurances that our parliamentarians are looking at ways to better household incomes.


The next question that begs to be asked is if the pricing of HDB apartments fair. How much does it cost HDB to build these apartments? Currently BTO apartments are obviously discounted to market values. Are they really subsidized? Show us the figures!


There are legitimate concerns. The HDB flat is not the magic button that can solve our retirement issues, our healthcare worries. Nor is that easy to own and maintain one, given job uncertainties and high property prices.


Please don’t just show me a technical example of affordability in my face and wave me off! Or else I might be tempted to suggest we pay you in lottery tickets – a chance to earn a million or two tax free dollars – instead of the guaranteed salaries our leaders earn.

  1. oute
    March 3, 2012 at 6:56 am

    Even the work permit construction workers are earning more than $1,000 a month – with overtime.

    why have we come to this stage, when we dont have our own local construction workers.

  2. March 3, 2012 at 12:12 pm

    Reduce the lease from 99 years to 30 years will reduce the mortgage monthly payments to a great extent. Sell the new 1 and 2-room HDB flats to the low income group with 30 years lease plus option to renew another 30 years. Sharing what I wrote to the Govt and media on this: https://docs.google.com/document/d/1HmWlWpj3ojnhqT0rmJvXkeBuSYKWoEK_skVfwR77LcM/edit

  3. March 3, 2012 at 3:13 pm

    our govt loves to play with and spin stories out of creative statistics. even if the glqss is half empty they will spin it to say it is quite full. they have shown they cant be trusted with whatever they claim and we have to be wary to look deeper beyond their claims as u rightly put it. to me though it is not about them being patronising but about them misleading the people by not telling the full truth. there is much we do not know about what they have been doing behind the scenes and that is for sure.

  4. oh la la
    March 4, 2012 at 1:49 am

    Selling flats with 30 years lease will contradict their statement about flats are for retirement.

  5. Cheng
    March 4, 2012 at 6:05 am

    I believe the soundbite is a sales pitch for the chinese/indian immigrants who are here for the ‘greener pastures’. DPM Teo makes no qualms to appeal (yet again) for more import.

    More importantly, when I see a magician chop a person in two, I can’t see how the trick works, but I would be foolish to think that the person had in fact been sawn in half.

  6. ben
    March 5, 2012 at 7:13 am

    man can also go to the moon, but how many made it??

    tharman should show us – how many total hdb transactions are there in each of the last 3 years and out of which how many transactions falls into their $1000 example category…

    we dun need technical, hypothetical answers.. we want realistic answers..

  7. July 26, 2012 at 1:15 pm

    You really make it seem so easy with your presentation however I find this topic to be actually something which I think I would by no means understand. It kind of feels too complex and very wide for me. I’m looking forward on your subsequent submit, I’ll attempt to get the cling of it!

  1. March 4, 2012 at 12:06 am

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