New HDB flats to become cheaper

[VIChris]

Make HDB cheaper is akin to raiding the reserves according to MBT. The account must balance, money "lost" somewhere must be top up from else where. It could be GST becoming 10%.

Sky high HDB price is akin like raiding the next generation and their parent, isn't it?

[greengiraffe]

Mark the words - Soft Landing...

Shortening leases, extending the minimum occupation period or even reinstating a pre-1971 rule that owners can sell HDB flats only back to the Housing Board are all solutions up for discussion, which may help to lower the prices of new flats.

Govt will only make cosmetic changes. Even then, lower new flat prices are specifically referring to non-mature estates.

Personally, I think they are adopting changes in order to better manage public housing prices in order to handle the new population targets. Moreover a serious asset deflationary policy will hurt banking sector and badly impact Singapore's key industry - Banking and Finance.

Khaw shares ideas to lower prices of HDB flats

One suggestion for debate: insist that owners must sell homes back to HDB

Published on Mar 11, 2013



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TWO days after signalling a critical rethink of the role and nature of public housing, Minister for National Development Khaw Boon Wan yesterday threw up a few suggestions as to how exactly policy may change. -- ST FILE PHOTO: YEN MENG JIIN

By Poon Chian Hui

TWO days after signalling a critical rethink of the role and nature of public housing, Minister for National Development Khaw Boon Wan yesterday threw up a few suggestions as to how exactly policy may change.

Shortening leases, extending the minimum occupation period or even reinstating a pre-1971 rule that owners can sell HDB flats only back to the Housing Board are all solutions up for discussion, which may help to lower the prices of new flats.

The minimum occupation period, introduced to reduce speculation, is the shortest period before the whole flat can be rented out or sold. It now stands at five years.

The last suggestion would mean an HDB flat owner could sell his flat not on the market, but only to the HDB, at the price he bought it at, with perhaps some interest, said Mr Khaw.

These are "reasonable suggestions" raised by MPs and the public which he will discuss with various groups, including the public.

He said this yesterday in relation to his Parliament pledge last Friday of making new flats cheaper by some 30 per cent, with those in non-mature estates to cost about four years of one's salary, down from 5.5 years now.

In Parliament, he also said it would be good to re-examine some old assumptions, including that of HDB flats being treated as appreciating assets.

At the heart of this transition is the impact of trade-offs between distinct groups, like home owners and home buyers, who may have differing views and needs.

"How do we make sensible trade-offs which are sustainable?" Mr Khaw asked yesterday.

"Most people actually do not have a housing problem. But a minority do, and they are serious housing problems," he said.

"So we need to tackle them, but in a way that is not at the expense of home owners."

A group that will feel the sting of dipping prices are those relying on rental income. Their tenants usually comprise people who cannot afford a new flat.

This is why the Government cannot keep building new flats, Mr Khaw said. "If I keep on meeting new demand, I am actually hurting the many home owners who now rent out their own properties. And there are many."

Some 40,000 entire HDB flats are being sublet; up to another 40,000 owners rent out rooms.

Rather, what he hopes to do is to engineer a "soft landing".

Mr Chris Koh, director of property agency Chris International, said an extension of the minimum occupation period may help reduce property speculation as it discourages those who are more interested in making money from flat sales and rental income. Instead, people who intend to stay for the long haul are more likely to buy the flats.

Chesterton Suntec International director of research and consultancy Colin Tan felt shorter leases are unlikely to work. In theory, shortening the leases from 99 years for most flats means they can be sold more cheaply. "There is likely to be only a one-time lowering of prices," he said. "The problem can come back as supply is not keeping up with demand."

[yeokiwi]

Renewable lease based on market price.
50+49.

The HDB owner can buy a 50 years lease new flat with an option to buy another 49 years upon the 49th year. Letting the owner exercise the option at any period of time during the 0th to 50th year will invite speculation.

Or he can choose to buy 99 years at onset.

The cost of option can be a market average of last 5-10 years of HDB prices.

No renting allowed for these flats.

[Bibi]

This is why the Government cannot keep building new flats, Mr Khaw said. "If I keep on meeting new demand, I am actually hurting the many home owners who now rent out their own properties. And there are many."

Why cant they just ban those whose household income exceeds S$7000 from renting out their HDB properties. These group of pp definitely just want extra income. They can still survive quite well without the rental money.

[egghead]

I'm so glad that you are not the policy maker.

[wahkao]

30% cheaper than what???

[brattzz]

2013 post replied on Dec 2014?
haha!

HDB flats should be in-line with median wages lah, fair and square,

[corydorus]

I do not understand about the renting part from Khaw. If is a room out or two, this are rented to people who are students or non PR or PR of low income. HDB owners are much lesser impacted. The main issue is renting out HDB where owner can afford to buy another private. This group actually competes ! I think that's the issue which he seems trying to protect or did i read wrongly ?

[specuvestor]

2013 post replied on Dec 2014?
haha!

HDB flats should be in-line with median wages lah, fair and square,

It's a good reminder of whether promises were kept. I always appreciate and value consistencies and follow-through.

[kichialo]

They are now tweaking the HDB resale price index. Using statistics to convince you prices have fallen.