Any fresh HDB curbs will affect new buyers only: Khaw

SINGAPORE - National Development Minister Khaw Boon Wan yesterday gave the assurance that any fresh curbs that would be introduced to make public housing more affordable - including disallowing the reselling of HDB flats on the open market - would apply only to new buyers, not existing flat owners.

The clarification came after earlier mention of such possible curbs last week unnerved the market and drove property stocks down, as many buyers of private homes are HDB upgraders. Keppel Land, Wing Tai Holdings and City Developments have fallen 2-3.8 per cent while CapitaLand has lost 4.8 per cent.

Mr Khaw had said in Parliament that with current prices of new flats standing at about five-and- a-half years of home owners' salaries, the government may want to bring this down to four years of salary for flats in non-mature estates.

At a community event on Sunday, he highlighted several possible measures, such as the restoration of the old rule requiring owners to sell flats back only to the Housing Board instead of the open market, shorter leases and longer minimum occupation periods.

The minister made the clarification in his blog, Housing Matters. He said this was in response to a resident of Queenstown, who told him that she was worried that HDB would suspend the reselling of flats on the open market.

He wrote that she had gone to his Meet-the-People session in Sembawang to tell him that she owned a fully-paid-up three-room flat, and had booked a build-to-order (BTO) flat in Bukit Panjang which would be ready only in a few years, by which time she hoped to sell the three- room flat to create a "sizeable" retirement fund.

In his blog post, Mr Khaw wrote that he told her that the "no resale on the open market" proposal was among the suggested curbs to be imposed on possible new housing options that would be cheaper than today's BTO flats.

But such restrictions, he wrote, would apply only to new buyers, and not existing flat owners.

He added that his ministry would not forget the interests of the many hundreds of thousands of present home owners.

"Some plan to rely on their flat to finance retirement needs. Some hope to bequeath their flats to the next generation. Some rely on renting out a room to bring in extra cash proceeds. Their concerns matter to me too."

The clarification was welcomed by analysts, who said it put things in perspective and ensured fairness for prior flat buyers and existing owners.

Still, for those that could be affected, the loss of the option of selling one's flat on the open market amounts to the loss of its status as a tradable asset.

As SLP International head of research Nicholas Mak put it, buying such homes would almost be like "renting from HDB".

He said: "Buyers will no longer view HDB flats as a store of wealth, which is a fundamental shift from now, when people view their homes as an asset."

DWG's senior manager Lee Sze Teck pointed out that two groups of home owners may also emerge from such a situation: those who can benefit from the property market cycle to earn a profit tidy enough to upgrade; and those who find themselves stuck midway up the housing ladder, unable to take part in the same wealth creation because of their restriction- laden homes.

"This is not healthy because of the wealth gap it creates," he said.

Many other questions about the proposed restrictions remain, such as the proportion of upcoming flats which could be affected; the impact of shorter leases on the availability of bank financing; and by how much monthly instalments could rise.

But nothing appears to be cast in stone.

Mr Khaw said he intends to invite flat owners to join in "Our Singapore Conversation" sessions to voice their concerns on housing policies. If flat owners who form the vast majority remain silent, discussion on housing policies may get wrongly skewed."


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