The 2 Types of Singaporeans Who Aren’t Going To Be Too Happy With HDB’s New Income Ceiling Increase

hdb income ceiling

Peter Lin



Have you ever tried squeezing into an MRT train at rush hour? I have. Sometimes I’m the last person in before the door closes and the relief that I’m able to make it is immense. Then, just as I start to lean against the door, hoping the train leaves the station, it opens again. And no matter how packed the carriage already is, there will always be one person who sees this as his second chance to board the train.

And so I’m squeezed even more than before. So yeah, I think I have a small idea what it feels like to be someone who is balloting for a HDB flat and hears the recent announcement by National Development Minister Khaw Boon Wan.

Now, we’re not saying this is a bad move…

I know of at least one couple who is very happy with Mr Khaw. His announcement that the income ceilings for Build-To-Order flats and Executive Condominiums will be raised later this year resulted in their pretty honest response – “YAY!!! Thank you.” Of course, I don’t know their exact combined income, but I think it’s pretty safe to assume that it’s just above the current $10,000 income ceiling for Build-To-Order flats.

In fact, I’m very confident they’re not the only people I know who are ecstatic about this announcement. I imagine most of my peers, especially those that are only getting married now, are excited to know that they’ll soon be eligible to apply for Built-To-Order flats (BTO) and Executive Confominiums (EC). Most of them would have been in the workforce for at least a decade now, and are therefore earning just above the current limit.

(UPDATE: Prime Minister Lee at this year’s National Day Rally in August announced that the income ceilings have been increased to $12,000 for HDB BTO flats and $14,000 for ECs)

I’m relieved for them. This news means that they won’t have to worry about setting aside more money to buy a condominium or a resale flat. By buying heavily subsidised housing and taking a smaller home loan, they’ll be able to set more cash aside for emergencies, insurance and investments.


… but we are saying there’ll be people who will be negatively affected.

Remember my story about the MRT carriage? That’s what it feels like for people who apply for BTO and EC flats. Macpherson Spring, an HDB BTO that was launched earlier this year, had 2,825 applicants for the 378 4-room flats on offer. That’s almost 7.5 times the number of applicants for the number of available flats. Sure, that’s an extremely above average number due to the convenient location, but on average the subscription rate for HDB BTO flats is still about 1.5 to 2 times.

Which means there will be a sizeable amount of people negatively affected by this new influx of eligible applicants. Here are the 2 broad categories of Singaporeans who will be affected by this new rise in income ceiling:


1. Those who have no other options but to apply for an HDB BTO

Households with an average income around $12,000 already have the options of a new EC, a resale flat, a condo or a private property. Now, they’ll have the option for an HDB BTO as well! On the other hand, households with an average income of $5,000 or less have a different set of options – either a 2-room, a 3-room or a 4-room flat. No matter what they choose, they’re still at the mercy of HDB’s balloting system. Because of their lower incomes, resale flats and private properties are often either out of their reach or would definitely affect their cashflow because of the higher monthly mortgage payments.

Because they’re at the mercy of HDB’s balloting system, they’re not going to be too pleased with being forced to compete with even more applicants once the income ceiling gets raised later this year. It’s just like not being able to afford a car and being forced to squeeze in an MRT carriage every day with people who can actually afford to cab, or own cars, or live near their workplaces.


2. Those who have been balloting for HDB BTOs multiple times

HDB has several priority schemes that give you higher chances of getting a small queue number when balloting. For example, married couples with children or couples who live with or near their parents have a higher chance of getting a flat compared to those that don’t. But as anyone who’s unsuccessfully balloted for a HDB BTO flat knows (and I’m not talking about those who are invited to select a flat and choose not to book), having more chances still doesn’t guarantee that’ll you get a flat.

What’s more, even if you do qualify for one of the several priority schemes, you now have to compete with an influx of new applicants – many of whom will also qualify for one of these priority schemes! Which means your chances of getting a flat still remains low.


A friendly suggestion to HDB now that the income ceiling has been raised

We know there’ll probably be no change in the methods used to give those with unsuccessful ballots a better chance at a higher queue number. Perhaps with the increase in competition for HDB flats, this should be something to take into consideration as well.

However, there should definitely be changes implemented to give priority to those with lower household incomes. Currently there is no such priority scheme, which is rather odd, considering that HDB flats are subsidised housing intentionally built for those with lower household incomes.

Providing subsidies might help with the affordability of the flat, but that assumes that they can get the flat in the first place. With the new influx of applicants with higher incomes that have several housing options, HDB should definitely ensure that families with lower household income are not left behind.


What other policies should HDB implement to avoid penalising others with the new income ceiling? We want to hear from you.

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Peter Lin

I am the poster boy for reinventing one's self. I've been a broadcast journalist, technical writer, banking customer service officer and a Catholic friar. My life experiences have made me the most cynical idealist you'll ever meet, which is why I'm also the co-founder of a local pop culture website. I believe ignorance is not bliss, and that money is the root of all evil only if you allow it to be.

  • Daniel Tan

    Perhaps give them higher balloting count?

  • lonewolf

    It’s a simple policy change to increase demand for bto/ec and therefore raise the prices across the board. Everybody should be unhappy about it.

    Ideally the solution would be to curb demand for private housing (make it less accessible or better still.. completely not available to foreigners, and I mean non-resident foreigners) so that people falling above the income ceiling can afford private housing. While these people move out of the hdb system, more hdb flats will be available and therefore prices will become more affordable too.

    But that’s bad for business and less taxes for government so it’s not going to happen. They want to keep the prices high and end of the day many of us suffer trying to build our home here.

    • Jean-Yves Robert

      Do you think that those people would move out of the hdb system or rather keep them and rent them out? Also, keep in mind that most condos belong to wealthy Singaporeans today. The whole problem is that property is seen as the best source of investment today. Cutting it and allowing one property only for each household might be a solution. Would you agree?

      • lonewolf

        Hdb is meant to give every Singaporean a home. It should not be a commodity that’s traded freely. One will have to give up one’s hdb once you move up and out.

        While private property is a form of investment, hdb cannot be. Wealthy Singaporeans can have their houses and condos that’s fine. The rest should be able to at least afford a [email protected]

  • Aron Teh Weiliang

    There should be a clear intention for HDB. The government always thinking like a capitalist . Which will always hurt the bottom percentile. The demand and supply should not apply in such a way that it include the rich people who are earning more than 10 k per month. they should not be included in the below 5k household group. They are rich! pls government acknowledge that. We below 5k house hold can never compete. We will soon form a poor zone and there will still be a upper class and lower class separation. worse still the below 5k will not even have a 4 or 3 room flat cos we are really price out! and we will not have more than one kid cos no room for the kids!

  • John

    I can’t agree that lower income families should have priority. Every family counts and everyone needs a roof above their head. The reason for raising the income ceiling is clear: higher incomes allow for higher prices.

    The government is not going to allow the price of land to slide in SG. They can prop up this segment of the market for maybe another 10 yrs. It’s all an empty shell if you ask me.

  • Hamano Shou

    Increase in HDB income celling therefore the HDB price will increase soon

  • Jai

    People who owns private property(s) should not own an HDB unit.

  • Jai

    Give them 6 months to dispose, or HDB recover the unit and pay them the original purchase price.

  • Dirty Dog

    Yes. Preserving the priority of lower income HDB applicants is an excellent suggestion which merits serious consideration by HDB.

  • Kalang Kabut

    This will give those earning above 8k to 10k the opportunities to add another stack of dollars in their fat pockets. They will buy and sell it at a good profit. Why allow them to compete with the not so well off? Should give priority to those with lower income brackets as for them, make them bid for a COE among themselves to buy the EC or BTO.

  • Winston Sheng

    The CEO Ms Cheong states very clearly she encourages Rental Tenants to purchase their flats, as this would give them a stake in the Nation. Why then will Not HDB grant this privilege to 20 year Tenants at Blocks 16, 17 , 18 GHIM MOH ROAD, as they did some 7 years ago to a number of downgraders from Bukit Merah, and who after the restriction of 5 years were able to sell them at market Prices.
    HDB officially told us that these flats are needed for rentals to otheres waiting in line.

    Is not this a CONTRADICTION and tantamount to DISCRIMINATION??
    Perhaps the CEO will rectify this Abnomaly.

  • kar weng chooi

    My suggestion will be alloting chances based on their income.If HDB can apportion the chances as thus : less than $2k (5x chance),$2001-3,999(4x),$4k-5,999(3x),$6k-7,999(2x),$8k-12k(1x).In this way lower income will not be squeezed out but higher income applicants.At the same time,higher income applicants will still have chance to apply for affordable BTO housing.

  • JT

    Subsidized ???