Measures to Cool the HDB Resale Market and Provide More Support for First-Time Home Buyers

• The Loan-to-Value limit for HDB housing loans will be lowered by 5 percentage points from 80% to 75%
• The Enhanced CPF Housing Grant quantum will be increased to improve affordability for lower-to-middle income first-time home buyers
• These measures further encourage financial prudence and promote a stable and sustainable market

MND and HDB announced today a set of measures to cool the HDB resale market, and to provide more support to lower-to-middle income first-time home buyers.

2          With effect from 20 August 2024, 12.00am, the Loan-to-Value (LTV) limit for HDB loans will be lowered from 80% to 75%. This brings the LTV limit for HDB loans in line with loans granted by financial institutions, which remains at 75%.

3             As Prime Minister Lawrence Wong announced in the National Day Rally 2024, the Government will increase the Enhanced CPF Housing Grant (EHG) quantum for both new and resale flats to support first-time home buyers. The EHG will be increased:

• By up to $40,000 for eligible first-timer families, from the current maximum grant amount of $80,000 to $120,000; and

   

• By up to $20,000 for eligible first-timer singles, from the current maximum grant amount of $40,000 to $60,000.

4             Given the sustained, strong, broad-based demand for HDB resale flats, these measures will help cool the market and encourage prudent borrowing, thus making housing more affordable for lower-to-middle income first-time home buyers.

Lowering of LTV Limit for HDB Housing Loans

5             The Government closely monitors the HDB resale market. Earlier rounds of cooling measures and the ramped-up Build-To-Order (BTO) flat supply have helped to moderate the increase of HDB resale prices. HDB resale prices grew by 4.9% in 2023, down significantly from 10.4% in 2022. However, resale prices still rose by more than 4% in the first half of 2024. This was driven by strong, broad-based demand, coupled with some supply tightness, as fewer flats reached their Minimum Occupation Period this year.   

6          To further stabilise the HDB resale market and encourage flat buyers to borrow prudently, the LTV limit for HDB housing loans will be lowered by 5 percentage points from 80% to 75%. The revised HDB LTV limit will apply to complete resale applications[1] that are received by HDB on or after 20 August 2024, as well as BTO applications for the October 2024 BTO exercise onwards. The LTV limit for loans granted by financial institutions remains unchanged at 75%.

7             First-time home buyers, especially lower-income households, will be less affected by the lower LTV limit, as they receive significant housing grants. To provide further support to lower-to-middle income first-time home buyers, we will also enhance the EHG.

Increase in Enhanced CPF Housing Grant for first-timers buying new and resale flats      

8          Introduced in September 2019, the EHG[2] is a means-tested grant that provides additional support for lower-to-middle income households buying new or resale flats as their first home. Currently, eligible first-timer families and singles buying a flat can receive up to $80,000 and $40,000 in EHG, respectively. The EHG amount is tiered based on household income, with no restrictions on flat type and location. The EHG is progressive, so that lower-income households receive more support for their home ownership aspirations.

9             Since its introduction, about 72,300 first-timer households have benefitted from EHG, amounting to more than $2 billion. In the first six months of 2024, about $204 million in EHG was disbursed to around 7,000 first-timer households. Of the 72,300 first-timer households who received the EHG so far, 4 in 10 bought resale flats while the remaining 6 in 10 bought a flat from HDB across the various sales modes (i.e., BTO, Sale of Balance Flats and open booking of flats).

10          To further support first-time home buyers, the maximum quantum of EHG grants will be increased to $120,000 for families, and $60,000 for singles. Depending on the monthly household income, the increase will range from $5,000 to $40,000 for families and from $2,500 to $20,000 for singles, with higher increases for lower-income households who require more support. See Annex A for the details.

11        With the revised EHG, plus the existing CPF Housing Grant and Proximity Housing Grant (PHG), first-time home buyers will receive greater help in their flat purchases.

• New Flats

  Eligible first-timer families who buy a new flat will receive up to $120,000 in EHG, on top of the significant market discount in the flat price, while singles will receive up to $60,000 in EHG. 

   

• Resale Flats

Eligible first-timer families who buy a resale flat will receive up to $230,000 in housing grants, comprising the revised EHG of up to $120,000, a CPF Housing Grant of up to $80,000 and a PHG of up to $30,000.

For eligible first-timer singles who buy a resale flat, they can receive up to $115,000 in housing grants comprising the revised EHG of up to $60,000, a CPF Housing Grant of up to $40,000 and a PHG of up to $15,000.

The details are shown in Tables 1 and 2. 

Table 1: Housing Grants for Eligible First-Timer Families