With the new property cooling measures rolled out on 19 August 2024, there’s a lot to unpack, especially for those of you looking to buy your first home. In this article, we’ll dive into how these changes, including the tightened Loan-to-Value (LTV) limits and the increased Enhanced CPF Housing Grant (EHG) for both new and resale flats, could impact you as a first-time home buyer.
What’s New: Singapore’s August 2024 Property Cooling Measures
Tightened HDB Loan Limit
- LTV limit for HDB loans lowered from 80% to 75% from 20 August 2024
- Loans granted by financial institutions remain capped at 75%
Increase in Enhanced CPF Housing Grant
- EHG provides support to lower- to middle-income first-time home buyers of new or resale flats
- Maximum quantum of EHG grants raised to $120,000 for families and $60,000 for singles
On 19 August 2024, the Ministry of National Development (MND) and the Housing & Development Board (HDB) introduced new measures aimed at cooling the HDB resale market and providing additional support to lower- to middle-income first-time home buyers. Effective from 20 August 2024, the LTV limit for HDB loans has been reduced from 80% to 75%, aligning it with the LTV limit for loans provided by financial institutions, which remains at 75%.
The Government has been closely monitoring the HDB resale market. Previous rounds of cooling measures and an increase in Build-To-Order (BTO) flat supply have contributed to a moderation in HDB resale price growth. In 2023, resale prices increased by 4.9%, a significant decrease from the 10.4% rise in 2022. However, in the first half of 2024, resale prices still saw an increase of over 4%, driven by widespread demand and limited supply, as fewer flats reached their Minimum Occupation Period this year.
The new property cooling measures were made to further stabilize the HDB resale market and encourage more prudent borrowing among flat buyers. This revised limit of 75% will apply to completed resale applications received by HDB on or after 20 August 2024, and to BTO applications from the October 2024 BTO exercise onwards.
Increase in Enhanced CPF Housing Grant for First-timers Buying New and Resale Flats
During the National Day Rally 2024, Prime Minister Lawrence Wong announced a significant increase in the EHG for first-time buyers of both new and resale flats, aimed at providing greater support to lower-income families. Currently, first-time families can receive up to S$80,000, while singles are eligible for up to S$40,000 through the EHG. However, from 20 August 2024, the maximum grant will be increased to S$120,000 for eligible families and to S$60,000 for eligible singles.
The details of the housing grants for first-time home buyers are shown in Tables 1 and 2.
Table 1: Housing Grant for Families
| Grant | Current | Revised | |
| CPF Housing Grant | 2 to 4 Room Flat | $80,000 | No Change |
| 5 Room or Larger Flat | $50,000 | No Change | |
| Enhanced CPF Housing Grant (EHG) | Up to $80,000 | Up to $120,000 | |
| Proximity Housing Grant (PHG) | Up to $30,000 | No Change | |
| Total grants for resale flats | Up to $190,000 | Up to $230,000 | |
| Total grants for new flats (EHG) | Up to $80,000 | Up to $120,000 | |
Table 2: Housing Grant for Singles
| Grant | Current | Revised | |
| CPF Housing Grant | 2 to 4 Room Flat | $40,000 | No Change |
| 5 Room or Larger Flat | $25,000 | No Change | |
| Enhanced CPF Housing Grant (EHG) | Up to $40,000 | Up to $60,000 | |
| Proximity Housing Grant (PHG) | Up to $15,000 | No Change | |
| Total grants for resale flats | Up to $95,000 | Up to $115,000 | |
| Total grants for new flats (EHG) | Up to $40,000 | Up to $60,000 | |
The EHG, which has been in place since September 2019, is implemented to assist lower- to middle-income households with their first home purchase. The grant amount is tiered based on household income, with higher support going to those with lower incomes.
The revised EHG will apply to eligible households applying for new flats from the October 2024 BTO exercise and to those submitting resale applications on or after 20 August 2024. Prospective BTO applicants with an existing or upcoming HDB Flat Eligibility (HFE) letter can access the revised EHG starting from the October sales exercise. However, the updated EHG will not apply to flats that were launched before the revision. For resale buyers, eligible first-timers who have not yet finalised their transactions will receive the increased grant, which will be credited to their CPF accounts within two months after the completion of their resale.
Ensuring Affordable and Accessible Public Housing for All
In the October 2024 BTO exercise, HDB will offer 8,500 flats under a new classification system with added subsidies for Plus and Prime flats, catering to most families’ income brackets. With this, Singapore targets to offer 100,000 flats between 2021 and 2025.
Resale flats remain affordable for most buyers, with 80% of first-timer families in 2023 spending 25% or less of their monthly income on HDB loans. Furthermore, high-priced resale flats make up only a small portion of transactions.
Summary: August 2024 Property Cooling Measures
The recent updates to Singapore’s property cooling measures and the EHG mark significant steps towards making housing more affordable and accessible. With the new LTV limits and increased EHG amounts, whether you are a first-time buyer looking at new or resale flats, you will stand to benefit from the enhanced support. The Government’s commitment to maintaining the property market to be stable and sustainable reflects its ongoing dedication to helping Singaporeans, financially, to achieve their homeownership goals. If you’re considering a BTO flat or a resale property, these changes will provide more assistance in your journey towards finding the perfect home.
