SINGAPORE: The Government is “mindful” of the potential impact of increasing Central Provident Fund (CPF) housing grants in a buoyant resale market, the Ministry of National Development (MND) said on Thursday (Feb 16).
“That is why the grant increases do not go to all resale buyers, but are specifically targeted at eligible (first-timer) home buyers with incomes below S$14,000 for families and S$7,000 for singles, through the CPF Housing Grant,” said the ministry.
“About a third of resale flat buyers have received the CPF Housing Grant in the last two years.”
Deputy Prime Minister and Finance Minister Lawrence Wong announced on Tuesday in the 2023 Budget statement that the CPF Housing Grant will be increased from S$50,000 to S$80,000 for eligible first-timer families buying a four-room or smaller resale Housing Board (HDB) flat.
For such families buying a five-room or larger resale flat, the amount will be increased from S$40,000 to S$50,000.
The grant amount for eligible first-timer singles buying a four-room or smaller resale flat will be increased to S$40,000, and to S$25,000 for a five-room resale flat.
MND estimates that the increase will benefit more than 10,000 first-timer households in the first year of implementation.
After the announcement on Tuesday, property analysts said the measures could further spur demand for resale HDB flats.
Mr Lee Sze Teck, senior director of research at Huttons, said the HDB resale market’s transaction volume could increase to between 26,000 and 28,000, up from an earlier projection of 24,000 to 26,000.
Growth in resale prices may increase to between 8 per cent and 10 per cent, he said, upping his earlier projection of about 5 per cent.
Chief executive officer of PropNex Realty Ismail Gafoor said the increase in grant amounts could further spur demand for resale flats, keeping resale prices firm.
MND said on Thursday that resale transactions are “determined on a willing-buyer-willing-seller basis”.
“Sellers who raise their asking prices might run the risk of pricing themselves out of the market as buyers remain price conscious, given the high interest rates and uncertainties in the global economy,” it added.