Tuesday, November 20, 2012

BTO flats remain affordable: Khaw

The 12 percent uptick in prices of new HDB flats since January 2009 for first-time buyers is still lower compared with the 34 percent increase for resale units during the same period, said National Development Minister Khaw Boon Wan in Parliament.

“We take affordability fully into account when pricing BTO (Build-to-Order) flats. New flats enjoy generous discounts off market prices,” he said.

This was said in response to a query by MP Lee Bee Wah of Nee Soon GRC, but she argued that the 12 percent rise is still higher than the salary hike of many Singaporeans.

According to Mr Khaw, first-timers use “23 percent of their monthly income for housing loans”. He added that they are “able to pay their monthly instalments using their Central Provident Fund contributions” at minimal or zero cash pay-out which is affordable for BTOs.

For instance, a four-room flat in Choa Chu Kang or Sengkang ranges in price from S$250,000 to S$310,000 which is fairly reasonable given the current market situation, he noted.

The Minister added that the growth in resale HDB flat prices was caused by the public’s response to the resale price index in the last quarter which hit a record high.

“Resale price is beyond my control. That is set by buyer and seller. But for first-timers buying BTO flats, that is within my control and it is my job to ensure it will be affordable.”

View the original article here

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