SINGAPORE - Private property downgraders who can show they obtained an option to purchase an HDB resale flat before the cooling measures kicked in may have their 15-month wait-out period waived, said the Housing Board on Thursday.
As at Tuesday, HDB has received about 450 appeals from former and current private property owners over the 15-month wait-out period, it said on Thursday in response to media queries.
Based on a preliminary screening of some 200 appeals, about 50 per cent are cases where owners had obtained an option to purchase to buy an HDB resale flat before Sept 30, it added.
Since Sept 30, private home owners must wait 15 months after the sale of their current home before they can buy a non-subsidised HDB resale flat.
Exceptions are made for those aged 55 and above who are moving from a private property to a four-room or smaller HDB resale flat, a two-room flexi flat or a community care apartment intended for seniors.
Since the announcement, some private property owners who have sold their private property but have yet to complete the application to buy an HDB resale flat have found themselves in difficult situations.
HDB said it will exercise flexibility for buyers with documentary proof that they had obtained the option to purchase before the policy changes and waive the 15-month wait-out period.
These buyers would have to show proof of payment of the option fee or the option exercise fee before Sept 30, for HDB to process their appeals favourably.
HDB will also verify on its system for buyers who are using their Central Provident Fund monies or taking an HDB housing loan for the flat purchase, as such buyers would have to make a request for an HDB valuation.
The remaining appeals received by HDB include cases where the option to purchase a resale flat has not been obtained. These buyers may have also committed to sell, or have sold, their existing private property.
HDB said it will review the documents submitted and will assess these appeals on a case-by-case basis.
In instances where the resale flat buyers are no longer eligible for the purchase due to the 15-month wait-out period, the option to purchase will become null and void.
In these cases, sellers will have to refund the option fee paid to the buyer, said HDB.
A buyer pays an option fee of between $1 and $1,000 in cash to the seller to "reserve" the property. The fee serves as part of the purchase price and is non-refundable.
Within the option period of 21 days, the buyer can exercise his option to purchase, which means he has legally agreed to buy the flat.
The option-exercise fee to buy the flat should not exceed $5,000 when the option fee is included.
After the buyer exercises his option to purchase, both buyer and seller decide when to submit their respective portions of the resale application to HDB.
On Thursday, HDB said the number of private property owners buying HDB resale flats has doubled in 2021 and the first quarter of 2022, compared with 2019 and 2020.
HDB said it is unable to share specific figures for this group of buyers, as requested by ST.
Prior to the cooling measures on Sept 30, private property owners who wanted to buy a non-subsidised HDB resale flat did not have to serve a wait-out period, but were required to sell their private properties within six months of the flat purchase.
On Tuesday, National Development Minister Desmond Lee told Parliament that this group of downgraders accounts for about one in 10 HDB resale flat buyers in the last five years.
The latest curbs, which were announced by the authorities just 15 minutes before they kicked in, came as HDB resale prices increased by 7.8 per cent in the first nine months of 2022, even in the face of rising interest rates.
HDB reiterated on Thursday that the measures aim to slow the momentum of price increases in the HDB resale market, by deferring demand from private property owners, so that HDB resale flats will continue to be an affordable option for first-time home buyers.
It said: "Private property owners generally have more financial means to buy resale flats, as compared to first-time home buyers or existing HDB home owners.
"Some may not even need to take loans to complete their purchase. They therefore tend to pay higher amounts of cash-over-valuation when buying resale flats."
It also noted that the wait-out period is a temporary measure that will be reviewed depending on overall demand and market changes.
A civil servant, who wanted to be known only as Mr M. S., 40, said he was relieved that HDB will likely waive the wait-out period as he had submitted proof that he exercised his option to purchase before Sept 30.
He had intended to sell his three-bedroom condominium unit to buy a bigger HDB executive apartment in Pasir Ris for $768,000 as his three children, aged nine to 14, are outgrowing his current home.
“At least there’s some light at the end of the tunnel and my kids can look forward to the new home,” he said.