The Housing & Development Board (HDB) will revise, in stages, the quantum of the CPF housing grant by up to $1,000 per month from January to May 1999.

2 HDB introduced the CPF Housing Grant Scheme in October 1994 to help first-timer citizen families purchase resale HDB flats. The grant was initially set at $30,000 for first-timer families to buy resale flats to live near their parents. In August 1995, the grant quantum was revised upwards and a 2-tier grant was introduced: $40,000 for first-timer families who buy resale flats anywhere and $50,000 for first-timer families who buy resale flats near their parents. The Scheme was extended to first-timer families who buy Executive Condominiums (ECs) in August 1996. In June 1998, the Scheme was also extended to single citizens. The current grant quantum is as follows:

Table 1: Current CPF Housing Grant Quantum

3 The CPF Housing Grant Scheme has achieved the objective of helping first-timer households purchase resale HDB flats and ECs to set up their homes. Since its introduction in 1994, the Scheme has benefited some 28,800 families and 1,500 singles. A total of $1.254 billion has been disbursed. In recent months, the Scheme has attracted 2,200 applications per month for the purchase of resale HDB flats, compared to an average of 500 per month in 1997.

4 Resale HDB flats and EC units have become more affordable in 1998. As at the 3^rd Quarter of 1998, prices of resale HDB flats have fallen by 24% and are back to the 4^th Quarter 1995 level. Similarly, EC developers have lowered their selling prices to below the 1996 level, when ECs were first launched. In tandem with the increased affordability arising from the decline in prices of both resale HDB flats and ECs, HDB will revise the grant quantum downward in 1999.

5. The CPF Housing Grant will be reduced in stages over 5 months, starting from 1 January 1999. A cut of $1,000 per month will be made to the Family Grant, Joint Singles Grant and EC Grant while the Single Citizen Grant will be reduced by $500 per month. The reduction is made in stages to minimize the financial impact on eligible buyers who are in the process of committing to the purchase of a property. The revised grant quantums and their effective dates are given in Table 2 below.

Table 2: Revised CPF Housing Grant Quantum

6 The grant quantum will change on the first of each month from January to May 1999. HDB will determine the appropriate quantum for a CPF housing grant application in the following manner:

For Buyers of HDB Resale Flats

For Buyers of ECs

7 The reduction in CPF housing grant quantum will not affect buyers of resale HDB flats and ECs who have already submitted their CPF housing grant applications to HDB or whose applications are received by HDB on or before 31 December 1998.

8 For further enquiry, the public may contact HDB through the following channels:

(i) Purchasers of Resale HDB Flats

Resale Enquiry Line at Tel: 1800-2731441

(ii) Purchasers of Executive Condominiums

Sales Enquiry Line at Tel: 1800-2732121