Yes! The increase in the income ceiling is great for those who had previously exceeded the combined income of $10,000 for BTO flats. But what does it mean for those who have been applying for a new home, but always fail to secure one because HDB launches get overwhelming responses and are often oversubscribed?

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 of 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. 

#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.

(First published in Money Smart)


More property stories: