The Housing & Development Board (HDB) will further revise the CPF Housing Grant downwards by up to $1000 per month from June to October 1999.

2 HDB introduced the CPF Housing Grant Scheme in October 1994 to help married first-timer citizen applicants purchase resale HDB flats. It was extended to married first-timer citizen applicants buying Executive Condominiums (ECs) in August 1996, and to single citizens in June 1998. The Scheme has benefited some 41,700 families and 4,100 singles, with a total of about $1.9 billion disbursed.

3 As resale HDB flats and EC units became more affordable, HDB revised the CPF housing grant downwards in stages from January to May this year. The CPF housing grant quantum as at 1 May 1999 is as follows:

Table 1: CPF Housing Grant Quantum As At 1 May 1999

4 Notwithstanding the adjustment, applications for the grant remained high at 1,850 a month from January to April 1999, almost the same level as the average monthly applications in 1998. As a proportion of first-timer applications, 80% have bought their flats using the CPF housing grant compared to 20% seeking to buy new HDB flats.

5 As at the 1st Quarter of 1999, prices of resale HDB flats have fallen by 28% from the peak in the 4th Quarter of 1996 and have returned to the 1995 level. The decline in resale prices have led to the strong demand for the CPF housing grant from first-timers for purchase of resale flats. There is a need to maintain some balance between first-timers buying new and resale flats. As resale flats have become more affordable, the Government has therefore decided to further adjust the CPF housing grant quantum downwards, to the level when the grant was first introduced in end 1994.

6 With effect from 1 June 1999, the CPF housing grant will be revised as follows:

1. The Family Grant for the purchase of HDB resale flats and ECs will be reduced by $5,000, to $40,000 for those buying resale flats near their parents, and to $30,000 for others. The reduction will be phased over a five-month period at $1,000 per month from June to October 1999.
2. The Joint Singles Grant and Single Citizen Grant will be reduced by $3,000 and $1,500, to $22,000 and $11,000 respectively. The reduction will be phased over a three-month period at $1,000 and $500 per month for the Joint Singles Grant and the Single Citizen Grant respectively from June to August 1999.

7. The adjustment will be made in stages to minimise the impact on those who are in the process of purchasing a property. The revised CPF housing grant and the effective date for each stage of revision are as follows:

Table 2: Revised CPF Housing Grant Quantum

9 For the singles, the Joint Singles Grant and the Single Citizen Grant will help them defray about 28% and 14% of the average price of a 2-room resale flat respectively, and 16% and 8% of the average price of a 3-room resale HDB flat respectively.

10 The grant quantum will be revised on the first of each month from June to October 1999 for the Family Grant, and from June to August 1999 for the singles grant. HDB will determine the appropriate quantum for a CPF housing grant application in the following manner:

11 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