More HDB flat owners holding on to units after MOP

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Only 470 HDB flats were sold within 12 months after meeting the five-year Minimum Occupation Period (MOP) last year, compared to 1,006 flats in 2012, according to media reports citing HDB.

This is a far cry from the 1,231 units offered in the market in 2011 and the 1,338 flats sold in 2010, the highest figure in the past five years.

“Last year's HDB resale prices have started to moderate. We saw prices start to come down, especially towards the second half of last year,” said ERA Realty Network’s Key Executive Officer Eugene Lim.

“So those who are not in urgent need of selling their flat would probably want to wait it out for the next [upturn], instead of selling their flat when the market is going down.”

Instead of selling, more owners opted to sublet their units after achieving the MOP. Last year, 412 flats were leased out compared to just 268 flats in 2012 and 322 flats in 2012.

“People see public housing as a price asset, because the minute they sell it, they are not able to generate income, and at the same time, they are not able to enter the (HDB) market again,” noted PropNex CEO Mohamed Ismail.

“Today we are talking about public housing having a decent rental yield of about 4 to 4.5 percent, which is marginally higher than private property, which would have 3 to 3.5 percent (rental yield),” he added.

Lim also noted that existing HDB flat owners, who intend buy private property, don’t want to sell their HDB flats.

This is because private property owners who purchase an HDB unit are obliged to sell their private property within six months. “This is the current government policy, so most homeowners if they can afford to, will try and hold on to both their HDB flats and their private property,” he added.

Photo by Muneerah Bee



Muneerah Bee, Senior Journalist at PropertyGuru, edited this story. To contact her about this or other stories email [email protected]

[Arcachon]

SINGAPORE: Fewer people are selling their new Housing and Development Board (HDB) flats immediately after meeting the Minimum Occupation Period (MOP), said HDB Tuesday (June 3).

Currently, owners are required to physically occupy their flat for five years, before they are allowed to sell their home in the open market or sublet the entire unit. They are also not allowed to buy or invest in a private residential property during their MOP.

Now, it seems fewer are choosing to sell once they've met that requirement.

According to HDB, there were only 470 flats sold within one year of meeting the MOP in 2013. This is less than half the number seen in 2012, when 1,006 flats were sold.

In 2010, the number was 1,338 -- the highest in the last five years. In 2011, only 1,231 units were sold.

"Last year's HDB resale prices have started to moderate," said Mr Eugene Lim, Key Executive Officer at ERA Realty Network. "We saw prices start to come down, especially towards the second half of last year. So those who are not in urgent need of selling their flat would probably want to wait it out for the next cycle, instead of selling their flat when the market is going down. They are probably waiting for the next upturn."

In the meantime, more are choosing to sublet their flats within one-year of meeting the MOP. There were 412 units sublet last year, up from 268 units in 2012 and 322 units in 2011.

"People see public housing as a price asset, because the minute they sell it, they are not able to generate income and at the same time, they are not able to enter the (HDB) market again," said Mr Mohamed Ismail, CEO of PropNex. "Today we are talking about public housing having a decent rental yield of about 4 to 4.5 per cent, which is marginally higher than private property, which would have 3 to 3.5 per cent (rental yield)."

"A lot of homeowners feel if they were to dispose of their HDB flat and buy a private property, and subsequently buy a HDB again, they will be forced to sell off their private property," added Mr Lim. "This is the current government policy, so most homeowners if they can afford to, will try and hold on to both their HDB flats and their private property."

HDB owners who buy private property, are not required to dispose of their existing HDB flat. However, private property owners who buy an HDB flat are given six months to sell off their private property after the purchase of the flat.

HDB says over the last five years, the proportion of those who own a private residence and HDB flat concurrently has remained stable at around four per cent. However, analysts say the absolute number could have grown since there are more HDB flats in the system today.

"The base has gotten much bigger," said Mr Lim. "That means there are absolutely more flats in the system today."

"If the percentage increased to double-digits, then we would be concerned." said Mr Ismail. "Are there a lot of people trying to hold on to public housing and yet invest? I think these are very reasonable and acceptable numbers."

With prices in the HDB resale market still moderating, analysts say it is unlikely that HDB apartment owners will see any urgency in selling off their flat in the coming year. Experts say they expect the number of people choosing to sublet their flat to go up, even though rental is likely to remain relatively flat.

- CNA/ek


http://www.channelnewsasia.com/news/singapore/fewer-people-selling-hdb/1135138.html

[Arcachon]

With fewer resale HDB, HDB price will also reduce RIGHT?????

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Home ownership is not just about providing shelter, but giving everyone a stake in the country and boosting the assets of lower-income Singaporeans, he said.