The increase in industrial wages (including fringe benefits and overtime allowances) between September 1976 (125) and September 1978 (156)
is 25%. By adjusting the income ceiling by 25% to $4,400 (rounded to the nearest $100), approximately the same number of families in the eligibility field would be maintained,
Phase II Flat Selling Prices
Based on tender prices for three Phase II contracts, it is estimated that the building costs for Phase II, as a whole, will be 50% - 70% over the level for Phase I. Land prices have also increased, although not as sharply as construction costs because the Phase II projects are generally located in less expensive sites and the land premia were agreed in early 1978 before the recent sharp escalation in land prices. Taking these two factors together, it is estimated that the overall Phase II flat price per square metre will be about 40% higher than the overall Phase I price.
On the basis of the estimated increase in Phase II prices, about 48% (as compared with 95% for Phase I) of the flats would be affordable by families with an income of $3,500 per month, based on mortgage facilities provided under the Scheme. It should also be noted in this connection that Phase II flats are, on average, smaller than Phase I flats, i.e. the net floor area per flat is 42.5 square metres (457 sq ft) in Phase II compared with 51 square metres (549 sq ft). in Phase I.
Private Sector Flat Selling Prices
The average selling price for private flats with a net floor area of 34 square metres (366 sq ft) would be about $190,000. Assuming that 40% of a household income were used to service mortgage repayment, and that mortgage finance on 70% of the flat price were available at 14% interest repayable over 12 years, a family with a combined family income of less than $4,778 would be unable to afford such a private sector flat.
About 1, 200 out of 5,000 non-Housing-Authority applicants processed in October 1978 when there was still ample choice of flats either withdrew their applications or requested permission to delete certain family members from their list of household members. It is thought that a substantial number of these applicants were concerned that they were over-income. Of the 502 cases actually turned down for being over-income, 87% had an income between $3, 500 and $4,500.
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