News

New Regulations Might Prevent HDB Flats From Being Resold at $1 Million in the Future

2020-11-30 , 1:53 pm

You’ve probably heard of the lucky owners who benefited from their decision decades earlier to get a BTO flat in prime areas like Bukit Merah or Bishan.

Well, if you’ve thought, or dreamt, about becoming one of them, I’ve got bad news for you.

New Regulations For HDB Flats In Prime Areas

According to Minister for National Development Desmond Lee, the government will be looking at a two-pronged approach to regulating HDB flats in prime areas such as the Greater Southern Waterfront (GSW).

The first is to build more rental and smaller HDB units in these areas that are suitable for the elderly or the lower-income group.

The second is to restrict resale transactions and control the prices of resale HDB flats in prime locations.

While the details of the pricing measures were not revealed, Lee said that his ministry will be working out its plans in the next few months, including consulting with the public for feedback.

Now, you’re wondering, what brought this on?

Injecting Diversity Into Prime Locations

The government doesn’t want the rich to monopolise all the prime locations in Singapore.

In a bid to inject some diversity into prime locations, the government has been building public housing in prime areas, including places like the city centres.

However, he warns, that won’t be enough to ensure diversity and inclusivity.

After all, when a homeowner buys an HDB flat at subsidised prices, he is able to resell it 5 years later at a higher price due to the location.

Repeat this a few times and soon, only people above a certain financial capability will be able to afford to live in the area.

“If premium units are traded at high prices, there is a risk that only wealthy people will be able to afford them. As a result, the nature of the residential area will change, and the prices may become unaffordable to the ordinary Singaporean.”

Public housing, he pointed out, is for all citizens, bringing together people from “different industries, demographics, and races”.

“We don’t want there to be premium HDB areas that only the rich can afford.”

It was also added that people who have purchased a BTO flat in a prime area also had a bigger “windfall” compared to other places.

They’ll have received a higher amount of subsidies even though years down the road, their homes’ prices have even greater potential to grow.

Previously in 2018, when the cooling measures for the property market were introduced, streams of buyers started buying properties before the regulations, like the increased stamp duty, kicked in.

Areas of Focus

The interview doesn’t just cover regulating HDB flats in prime areas.

Lee also mentioned his (and by default, the MND’s) focus for the current moment.

Construction Industry’s Problems

The government will be working together with the Singapore Contractors Association Ltd (SCAL) to roll out various policies and programmes for the construction industry and help soften the impact of Covid-19

Those Awaiting BTO Flats

Construction work would proceed as quickly as possible while maintaining the quality of the construction and transferred to the owner.

Safety at the sites will be ensured as well.

HDB Flat Owners In Financial Difficulties

Due to Covid-19, some HDB homeowners might face difficulty paying off their mortgage or monthly rent because they have a pay cut, or might have lost their jobs.

MND will be rolling out policies to help this group so they won’t lose their homes.

Other than that, for low-income families, MND is also working with the Ministry of Social and Family Development (MSF) to see what else can be done for them.

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