Address growing price gap in HDB resale, private homes

The price gap between Housing Board resale flats and private homes is widening, with no sign of abating.

HDB resale flat prices are falling, with the constant supply of new public housing units and the Government's announcement that not all old HDB flats will be eligible for the Selective En bloc Redevelopment Scheme.

In contrast, private home prices are rising steadily, helped along by strong collective sales and bullish bids put in by developers.

The many regulatory restrictions governing the ownership and lease of HDB flats, unlike for private properties, also exacerbate the divergent HDB resale and private home prices.

The Government, particularly the Ministry of National Development, the HDBand Urban Redevelopment Authority, should be careful not to let the price gap continue to widen as it can pose several challenges to Singapore.

There are doubts if older HDB flats can remain a viable asset to meet Singaporeans' retirement needs and fulfil the Government's promise of asset enhancement for citizens.

It becomes increasingly difficult to upgrade to private residential properties, as Singaporeans need to take on larger loans and can no longer rely on good HDB resale payouts.

The wealth gap is also worsened, as those who can afford private homes have their wealth enhanced when they sell their homes or get generous payouts from collective sales.

Mabel Tan Kim Choon (Madam)

A version of this article appeared in the print edition of The Straits Times on May 07, 2018, with the headline 'Address growing price gap in HDB resale, private homes'. Print Edition | Subscribe