PM Lee Hsien Loong announced during the National Day Rally that the income ceiling for new HDB apartments will be raised from $8,000 to $10,000.
The income ceiling for executive condominiums (EC) will also be raised from $10,000 to $12,000.
I think this change is long overdue as the previous ceiling was in place for the last seventeen years. During this time, both incomes as well as the price of HDB units have gone up considerably.
Will this change cause all the borderline cases to switch from buying a private property to buying a HDB unit instead? Private property developers will be watching the developments nervously.
But with this change in income ceiling, HDB will also need to increase the supply to meet the greater demand. Otherwise, prices will continue to go up. This is the fundamental rule of economics that cannot be ignored.