The Straits Times
www.straitstimes.com
Published on Nov 16, 2012
 

Banning PRs from buying resale flats not the answer

 
 

LESSEES of HDB flats tend to benchmark their units against prevailing record-breaking HDB resale flat prices, such as the $1 million deal for a Queenstown flat reported in September, rather than peg them with the median HDB price statistics ("Avoid feast and famine in housing"; Nov 4).

Looking at the "larger picture" has not helped to ease the fear over record-breaking HDB resale prices, as market prices continue to move north. The HDB's attempt to keep the pricing of the new Build-To-Order (BTO) flats affordable for Singaporeans has not yet made resale flat prices more affordable ("Khaw eases fears over $1m flat price"; Sept 9).

Naturalised citizens with deep pockets and rich Singapore permanent residents (PRs) have pushed HDB resale flat prices even higher.

Banning PRs from buying HDB resale flats will be unfair, as many of them cannot afford to spend $1 million on a flat. The HDB needs to set income caps for the purchase of resale flats according to flat type, similar to the income criteria for BTO flats. Income-cap eligibility can prevent runaway HDB resale flat prices.

And what about cash-rich private property owners who have been pushing the cash over valuation (COV) upwards? If Singaporean private home owners who wish to downgrade to HDB flats have to wait for 30 months after disposing of their private property and take maybe another three to four years to finally settle down in a BTO flat, they have no choice but to secure a resale flat at a high price, pushing prices higher.

To help relieve the pressure on HDB resale flat prices, shouldn't the HDB consider lifting the 30-month waiting time required for flat application so that all citizens have an equal chance in balloting for a BTO flat?

The HDB should ramp up the supply of more flats to cater to additional demand from private home owners who wish to downgrade.

Sustaining the level of HDB resale flat prices by implementing income-cap eligibility and lifting the 30-month ban on private property downgraders who wish to apply for BTO flats can have a positive effect in maintaining the price level in the private property market too.

Ang Chin Guan