http://www.straitstimes.com/archive/...cools-20150124

More renting out entire HDB flats as resale market cools

Published on Jan 24, 2015 1:20 AM

By Yeo Sam Jo


MORE people are renting out their entire Housing Board flats amid a cooling resale market, with many upgrading to private housing.

The number of subletting approvals last year jumped by about a fifth, from 30,074 in 2013 to an all-time high of 36,228 last year, HDB data released yesterday shows.

In the last quarter alone, 10,365 approvals were granted.

There were also 48,120 fully sublet units at the end of last year - a 5.4 per cent increase from the 45,674 units at the end of 2013.

An HDB spokesman told The Straits Times that flat owners' "desire to monetise their flats" and "availability of alternative accommodation" are among factors influencing the rise in subletting approvals.

Property agents and analysts say many flat owners upgrading to private homes are unwilling to sell off their HDB units, partly for investment reasons.

"They are keen to keep a second property for investment," said OrangeTee's director of research Christine Li. "They know that once they let go, they cannot buy back another one."

She was referring to rules introduced in 2010 which do not allow private home owners to buy an HDB flat unless they dispose of their existing private properties.

"This makes sense from an investment angle," said ERA Realty's key executive officer Eugene Lim, noting that the rate of returns for leasing HDB flats is "very attractive" compared to that of condominiums, due to their relatively lower purchase price.

DWG agent Benedict Lim agreed: "An average three-room HDB flat can already fetch about $2,100 to $2,500 a month depending on location."

He further noted that some flat owners sublet their units after moving to live with their family members or getting posted overseas for work.

The weakening housing market has also played a part, according to R'ST research director Ong Kah Seng. "The resale market now is very cold and makes it hard to fetch a good price," he said. "It makes more sense for people to hold on to their HDB flats and rent it out instead. They hope to have the best of both worlds."

Such is the case for administrative assistant Chris Lee, 60, who lives with her husband in a condominium in Clementi. The couple let out their three-room Tanglin Halt flat for about $1,800 a month to a family of four.

"My husband is retired, so we need the extra income," said Madam Lee. "It really does help with our property taxes and conservancy charges."

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