SINGAPORE – Removing Housing Board priority schemes and limiting those who can buy prime HDB resale flats on the open market are two ideas the majority of Singaporeans support to keep public housing in prime areas accessible and affordable.

The majority of Singaporeans also feel that owners should not be allowed to rent out the whole HDB flat after the five-year minimum occupation period (MOP), according to a report released by the Ministry of National Development (MND) on Wednesday (Oct 20).

More than 7,500 Singaporeans have weighed in on how to keep new HDB flats in prime areas, such as the city centre and Greater Southern Waterfront, inclusive since plans to do so were announced in November last year.

Public engagements to gather feedback and suggestions on the plans ended last month.

In a Facebook post on Wednesday, National Development Minister Desmond Lee said: “It is encouraging that Singaporeans have taken a very keen interest in this issue, and we thank all who have generously shared their perspectives and ideas. These suggestions have enriched our policy-thinking in developing the new public housing model, one that has been in the works for some time.”

A new public housing model for HDB flats in prime locations will be announced soon, Mr Lee added.

It will apply only to future public housing in prime locations, not existing flat owners.

On Wednesday, the Ministry of National Development (MND) released a report on the findings collected during the 10-month public consultations.

The majority of Singaporeans believe the Government should introduce new policy conditions for prime HDB flats and that it would be fair to do so, said MND.

This is so that these flats will be kept affordable at the point of purchase for first-time buyers and for subsequent resale buyers, it added.

This could mean the removal of HDB priority schemes, which the majority of participants are in favour of.

A priority scheme enhances some applicants’ chances in the computer ballot for flat applications.

One of these schemes is the Married Child Priority Scheme, which gives priority to applicants whose parents live in the same area. Currently, up to 30 per cent of Build-To-Order (BTO) flats are set aside for first-timer families under this scheme.

If the scheme is removed, it would mean that every eligible buyer has an equal chance of balloting for the flats.

Another policy condition could take the form of limiting the pool of buyers who can buy prime-area HDB resale flats, which the majority of participants are also in favour of.

For instance, this could mean an income ceiling cap on prime HDB resale flat buyers.

A majority of participants were in favour of imposing a longer MOP period than the current five years to ensure that the buyers are people who genuinely want to live in the flat for the long term.

Others felt that shorter leases than the current 99-year lease and smaller unit sizes could make the flats more affordable, said MND.

Asked to define what makes a prime housing location, the participants cited good transport links and being near the central business district as among the top attributes, said MND.

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There were, however, some disagreements on other suggestions.

While many were supportive of additional government subsidies to keep the prime HDB flats affordable and for the Government to recover these monies after the flats are resold, some felt these subsidies were not fair as buyers should be prepared to pay a higher price for a home in a premium location.

While some participants preferred the Government to buy back these flats and not allow owners to resell them on the open market to earn a windfall, there were mixed views on what a fair pricing mechanism should be.

Others preferred to be able to sell these flats on the open market, where prices can be negotiated between buyer and seller, said MND.

Other suggestions to reduce the “lottery effect” when reselling prime HDB flats include implementing a capital gains tax and channelling resale proceeds to the sellers’ CPF Special Account.

Mr Lee had previously said that a variety of flat types, such as two-room flexi units and rental housing, will be included when housing plans in prime areas are being drawn up.

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