1. Increase in income ceiling for BTO flats
1.1 Impact on BTO market
The increase in the income threshold will widen the pool of potential buyers for new flats. The higher income ceiling could lead some to buy larger or pricier BTO flats, thus diverting more buyers away from larger, higher-priced flats in the resale market. Previously, many of these buyers could have been limited by the current income ceiling, which restricted their eligibility to buy directly from the BTO market.
These buyers qualify to purchase more spacious or higher-floor BTO flats. This aligns well with general urban development plans, where future flats could be taller (potentially exceeding 50 storeys) or Prime / Plus flats, which are likely to cost more.
However, expanding the pool of eligible buyers will mean more people competing for the same BTO flats. This means that lower-income buyers who cannot afford other housing options may face tougher balloting odds.
1.2 Calculations
For instance, assuming a Loan-To-Value (LTV) ratio of 75 per cent, a Mortgage Servicing Ratio (MSR) capped at 30 per cent of gross monthly income, a 25-year loan tenure and a 4 per cent stress test rate, a borrower with an income ceiling of S$14,000 could take a maximum loan of around S$795,700. This would allow them to purchase a BTO flat priced at up to S$1.06 million.
With the income ceiling raised to S$16,000, the borrower can take a maximum loan of up to S$909,372 and purchase a flat up to S$1.212 million. This higher income ceiling gives buyers greater purchasing flexibility, potentially allowing them access to almost any BTO flat on the market, including Prime and Plus flats and ultra-high developments.
1.3 Impact on HDB resale market
The increased subsidy for eligible buyers and the removal of the 15-month wait-out period for private homeowners rightsizing to HDB resale flats may help increase demand for resale flats.
However, the HDB resale market will still face competition from other resale units due to an increasing supply of MOP flats. The number of MOP flats is slated to rise from 13,484 units in 2026 to 18,939 units in 2027 and further to 21,393 units in 2028, which means that more MOP flats may be listed for sale in the secondary market.
Moreover, many first-time buyers will likely prioritise BTO flats since the income ceiling has been increased and the prices of BTO flats are substantially lower. BTO flats also offer brand-new lease tenures, which may be preferred by many young couples.
Therefore, the net effect may see prices of HDB resale flats stabilising further in the upcoming months.
2. Increase in income ceiling for ECs
2.1 Impact on EC market
The increased income ceiling may help slightly more HDB upgraders purchase a new EC. With the change, some buyers need not pay as much cash when they purchase a new EC, thus appealing to a wider audience.
However, we do not expect a major impact on the market, as recent policy changes will likely continue to pose challenges to all EC buyers. These include the removal of the deferred payment scheme and the lengthening of the minimum occupation period.
2.2 Calculations
For instance, with an income ceiling of S$16,000 and assuming a Loan-To-Value ratio of 75 per cent, and a Mortgage Servicing Ratio that caps the borrower’s total monthly mortgage repayment at 30 per cent of their gross monthly income, a 30 years loan tenure with a 4 per cent stress test rate, the borrower could take a maximum loan of up to around S$1.005 million and buy an EC of up to S$1.34 million.
With the income ceiling raised to S$18,000, the borrower can take a maximum loan of up to S$1.13 million and purchase an EC of up to S$1.508 million. Currently, the median price of new ECs in August 2026 is S$1.92 million or S$1,830 psf. Therefore, an increase of about $168,000 can help to cover about 8 to 10 per cent of the purchase cost of a new EC, based on median price as a gauge.
3. Increased ballot chances
By giving greater priority to families, especially those with children, it will help more families secure their own homes earlier. By providing housing stability early, alongside other parenthood and marriage policies, this could accelerate the child-bearing years for many young couples, which will in turn help to improve our country's population numbers.
The increased ballot chances may not have a big impact on the market since the number of people affected may not be large. Anecdotally, many current applicants usually utilise the fiancé-fiancée scheme, while others could be students/NS men. Moreover, as the priority scheme for first-time families was implemented some time back, many would already have applied and successfully obtained a new flat.