Monday, 6 Dec 2021

Home seekers see benefits of 10-year MOP, limitations on resale buyers for new prime HDB flats

SINGAPORE – The 10-year minimum occupation period (MOP) for new flats in prime, central locations is key to attracting those who genuinely want to live in the flats and are not looking to profit from reselling, say home seekers and flat owners.

The longer MOP, up from the current five years, subsidy clawback and limitations on the pool of resale buyers are among the key measures under a new prime location public housing (PLH) model announced by the Government on Wednesday (Oct 27).

Among those who plan to apply for a unit in the upcoming Rochor build-to-order (BTO) project, the first site to come under the PLH model, is logistics manager Jacob Phua, 40.

He is more deterred by the pricing and waiting time for the flat than the various restrictions under the new model.

“The restrictions are not an issue to us because we plan to stay for the long term if we get a unit. Whether it’s five years or 10 years’ MOP, we’re unlikely to sell once we get used to the convenience of the location,” said Mr Phua, who has lived in Yishun all his life and hopes to move to a more central location with his wife.

“But looking at prices in previous BTO launches, I believe the Rochor prices may be more than $500,000, in which case, I may have to reconsider. There’s also the completion date to consider; I’m not that young to wait for more than five years for a flat,” he added.

The PLH model, which comes after almost a year of public consultations, is aimed at keeping new HDB flats in prime, central locations affordable and inclusive.

The pool of resale buyers of these flats will be limited to households which earn no more than $14,000 a month and with at least one Singaporean applicant.

Video producer Maverick Chua, 24, said the “long lock-in period with no definite returns” would not suit those who see properties as an investment, such as himself.

“Personally, the restrictions are too much for me, but I can see how it will still be attractive to someone who is looking for a place to live in and have no plans in upgrading or investing in property as the resale value will likely be controlled due to the various selling conditions,” he said.

Graphic artist Lim Qian Ting, 22, said she supports the new policy as it will deter those who are out to make a quick buck on the resale market.

“Prices of newer HDB resale flats are just so ridiculously high now and it’s so frustrating trying to get a BTO flat because of the high application rates,” said Ms Lim, who has been unsuccessful twice in her BTO applications.

“The future generations also need a home. It’s not fair to us if property prices are constantly rising as it puts a lot of financial pressure on us.”

HDB resale prices have been on the rise in the past year, with overall prices hitting a record high in the third quarter of this year, according to HDB data.

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Finance trainee Charleston Lim, 26, was hopeful that the new model would curb the “lottery effect”, which is a major point of discontent in the resale market where some first-time buyers earn a neat profit when sellingtheir well-located flats.

“The BTO ballot should not be seen as a lottery for those hoping to make an investment, as such a mindset impacts those who genuinely need housing,” he said.

However, Mr Lim concurred that the measures may benefit people like him, as flat prices in the city fringes may rise. He recently got a BTO flat in Geylang.

“Resale buyers who don’t want to be restricted by the PLH model may look for ‘second best’ flats just outside the city, while new prime housing residents may be less inclined to sell with the subsidy clawback, potentially raising the prices in areas like Geylang,” he said.

“Disallowing rental of whole units in PLH projects will also bode well for me, as city-fringe rentals rates may increase.”

While most were supportive of the new model, there were concerns that some groups of people, such as singles, would be left out as they are not eligible to buy these flats both at the initial purchase and on resale.

Singles are not allowed to buy these PLH flats, even after they turn 35 years old.

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This is in contrast to current rules that do not place limitations on singles 35 and above buying resale flats.

A 44-year-old housewife, who wanted to be known only as Mrs Goh, said while the policy may be helpful to curb speculative buying, disallowing singles from buying puts them at a disadvantage.

She said: “While the country’s longstanding policy is to encourage a family nucleus, the society has changed with many more singles, including divorcees and unwed mothers, today. Optically, they appear to be second-class citizens and that’s unhealthy for nation-building.”

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