Results 1 to 12 of 12

Thread: HDB may tweak rules to curb property speculators

  1. #1
    mr funny is offline Any complaints please PM me
    Join Date
    May 2006
    Posts
    8,129

    Default HDB may tweak rules to curb property speculators

    http://www.straitstimes.com/Invest/S...ry_495906.html

    Feb 28, 2010

    property

    HDB may tweak rules to curb property speculators

    Experts suggest some measures which can be taken to cool resale market

    By Joyce Teo


    Frustrated buyers have pointed their fingers at permanent residents and private property speculators for pushing up HDB resale flat prices to record levels.

    They claim the speculators snap up resale flats and then rent them out illegally or sell them quickly but legally after the stipulated one-year period.

    A week ago, National Development Minister Mah Bow Tan said the Government is looking into 'something' regarding measures for the HDB market.

    Property experts reckoned the Government could extend the minimum occupation period for those who bought their flats with bank loans as well as make checks to ensure owners are not flouting the rules.

    Under HDB rules, those who buy resale flats without housing grants can sell their flats after 21/2 years if they take a loan from HDB, or one year if they take a bank loan.

    They can rent out the entire flat only if they have lived in it for at least three years.

    Buyers who take up housing grants for their purchases can sell only after a minimum occupation period of five years.

    'Speculation is not an issue right now. But it may become an issue if buyers are sure that prices will continue to rise for the next year,' said the managing director of C&H Realty, Mr Albert Lu.

    ERA Asia-Pacific associate director Eugene Lim said the Government has already started to rein in the sizzling HDB resale market with the lowering of the loan-to-value limit (LTV) for housing loans taken from banks.

    This means buyers can borrow less than before - at up to 80 per cent of the property's valuation instead of 90 per cent previously.

    This will likely affect deals for the high-value resale flats involving cash-over-valuation (COV) of anywhere from $50,000 to $90,000, as buyers will now have to fork out more down payment, in addition to the cash, said Mr Lim.

    COV is the amount over and above the flat's valuation that is payable only in cash.

    There are not many other things the Government can look at, as it will not want to affect genuine demand, property experts said.

    While the lower LTV limit will have an impact, it won't be big, said Mr Chris Koh, director of Dennis Wee Properties.

    'It is the 5 per cent cash down payment and the COV that the buyers find challenging to come up with,' he said.

    An industry observer suggested that the Government may raise the first-time applicant's housing grant to buy resale flats.

    The Government can also extend the minimum occupation period for those who bought resale flats with bank loans to as long as 21/2 years, though this may not go down well with the banks as this may increase their risk exposure, property pundits said.

    'The banks may not agree to extending the period, but this area needs to be looked into so that people will not look at flats as a quick one-year turnaround investment,' said Mr Koh.

    Mr Lu suggested that the Government ban private property owners from buying resale flats if their sole intention is to rent them out.

    HDB flats are in demand as the well-located ones can easily command a rental yield of 7 per cent to 8 per cent.

    HDB, he said, can conduct regular checks to see that the private property owners are living in their flats instead of renting them out during the minimum three-year occupation period.

    'This, however, does not solve the problem of private property owners renting out their HDB flats legally after the minimum three-year occupation period,' Mr Lu said.

    HDB owners can buy private property but they must continue to live in their flats.

    However, those who have obtained prior approval from HDB to sublet their flats can live in the private property.

    Some property experts suggest going back to the days when flats could not be easily rented out.

    'One possible measure is to revert to the old system of allowing HDB flats to be rented out only if the owner has valid reasons such as being posted overseas to work,' said Mr Lu.

    Mr Koh added that HDB flats should not be seen as a short-term investment as this changes the whole concept of government housing.

    [email protected]

  2. #2
    Join Date
    Apr 2009
    Posts
    923

    Default

    Wondering if they will set a

    1. HDB and 1 Private Property Rule. (Maximum holding if you want to hold on to your HDB) If more than this, you can have lots of Private Property but HDB must go...

  3. #3
    Join Date
    Feb 2009
    Location
    峨眉山
    Posts
    5,512

    Default

    Quote Originally Posted by Condorich
    Wondering if they will set a

    1. HDB and 1 Private Property Rule. (Maximum holding if you want to hold on to your HDB) If more than this, you can have lots of Private Property but HDB must go...
    Don't youuuuuuuuuuuuuuuuuuuu.................. even suggest!

    You know govt officials aren't terribly creative and they may be reading this very forum and very post!

  4. #4
    Join Date
    Apr 2009
    Posts
    923

    Default

    at least 10 characters needed for a post. So I send 10


  5. #5
    teddybear's Avatar
    teddybear is offline Global recession is coming....
    Join Date
    Mar 2009
    Posts
    10,800

    Default

    May be even more draconian measure - Own Private cannot buy / simultaneously own HDB?

    Quote Originally Posted by Condorich
    Wondering if they will set a

    1. HDB and 1 Private Property Rule. (Maximum holding if you want to hold on to your HDB) If more than this, you can have lots of Private Property but HDB must go...

  6. #6
    Join Date
    Apr 2008
    Posts
    1,286

    Default

    The best way to curb speculation in HDB flats is seller's stamp duty.

    I propose a stamp duty for HDB flats sold:

    1. Within 10 years - 30%.
    2. 10 to 20 years - 20%.
    3. 20 to 30 years - 10%.
    4. Above 30 years - 0%.

    Not only individuals, but HDB also has to pay seller's stamp duty when it sells HDB flats (HDB is also a seller):

    1. Within 10 years of completion - 30%.
    2. 10 to 20 years of completion - 20%.
    3. 20 to 30 years of completion - 10%.
    4. Flats above 30 years old from date of completion - 0%.

    The above measures will be the most effective way to curb speculation.

    Like the PM said, "Homes are for keeps".

    You are supposed to "keep" your homes and not sell them.

    That's Propertism Rule Number 1:

    Properties should only be bought. Not sold. Property prices will always go up in the long term because paper money will return to its eventual valuue of zero.

  7. #7
    Join Date
    May 2009
    Posts
    15

    Default

    I tend to think that if you impose stamp duties for such a long period of time (up to 30 yrs) it may actually reduce the supply as many people cannot/or not willing to sell at a loss. Then that would drive the HDB prices sky high as there will only be very old flats and few left on the market.

    Also people who want to sell after few years may then ask sky high prices to ensure they can cover their stamp duties.

    Just my thoughts.

  8. #8
    Join Date
    Jul 2008
    Posts
    804

    Default

    Quote Originally Posted by Condorich
    Wondering if they will set a

    1. HDB and 1 Private Property Rule. (Maximum holding if you want to hold on to your HDB) If more than this, you can have lots of Private Property but HDB must go...
    Actually I don't think this will even fly. This is openly discriminating against property as an investment class rather than other forms of investment, and encourages outward investments to other countries (contrary to public policy). Consider this - which option makes me LESS eligible to stay in a HDB???

    1) I own 5 other private properties (all MM units of less than $500k each)
    2) 1 own 5 other private properties (all landed or worth more than $2M each)
    3) I don't own any private property in Singapore; BUT I own 20 private properties overseas
    4) I don't own any other property except for my HDB, but have $10M in equities/commodities/private placements etc.

    In short, it is not practicable that Govt could limit the number of private properties a HDB dweller can buy. BUT possibly practicable means are:

    a) Increase the no. of years of occupancy before a HDB dweller can rent out/sell (reduce speculation);
    b) Should multiple properties be owned, HDB must be owner occupied )in line with owner occupation purpose of public housing - but this is terribly negative for an anticipated election year and has a dampening effect on the HDB rental market);
    c) HDB flat can only be rented out if owners are overseas (again this is negative for the elections; but certainly good news for the private rental market)

    My 2 cents. Let's wait and see....

  9. #9
    Join Date
    Apr 2008
    Posts
    1,286

    Default

    Quote Originally Posted by matrix11
    I tend to think that if you impose stamp duties for such a long period of time (up to 30 yrs) it may actually reduce the supply as many people cannot/or not willing to sell at a loss. Then that would drive the HDB prices sky high as there will only be very old flats and few left on the market.

    Also people who want to sell after few years may then ask sky high prices to ensure they can cover their stamp duties.

    Just my thoughts.

  10. #10
    Join Date
    Apr 2009
    Posts
    923

    Default

    Quote Originally Posted by matrix11
    I tend to think that if you impose stamp duties for such a long period of time (up to 30 yrs) it may actually reduce the supply as many people cannot/or not willing to sell at a loss. Then that would drive the HDB prices sky high as there will only be very old flats and few left on the market.

    Also people who want to sell after few years may then ask sky high prices to ensure they can cover their stamp duties.

    Just my thoughts.
    If so, the relevant minister would be the first to go... next the real decisions makers. Can never be implemented for sure... anywhere else in the world does it?

    As compared to what I say 1 hdb and 1 private property rule.. it is a more likley candidate... those in HDBs can continue to aspire to hold private property and have a exit plan if they wanted to move back to HDB or sell private for profit. Those with more than 1 private.. especially many many private properties would not really mind to let go their one and only HDB, if it is a profit. Just think along how many people shall be affected and offer those affected some specific tax concessions for getting rid of their HDB's. Maybe the government will buy then from fair market prices and control the release in the secondary market. In my opinion, it could work wonders... as its win-win for policy makers and pte property owners.

    If so, HDB prices will drop for sure... if the real decision makers want it to drop that is. However, it maybe against the national interest if it drops to fast and too sudden or even allow it to drop. Careful implementation is necessary. The first step is to be able to conceptualise the plan, then explore the alternatives and finally making the decision. Thereafter review, refine and adjust.

  11. #11
    Join Date
    Apr 2009
    Posts
    923

    Default

    Quote Originally Posted by new2mondrian

    In short, it is not practicable that Govt could limit the number of private properties a HDB dweller can buy. BUT possibly practicable means are:

    My 2 cents. Let's wait and see....
    Hi Hi...

    You read it incorrectly. In my view, the governement will not and should not limit the number of private property a HDB dweller can buy. However, they could and most probably would if it is feasible to take back the one and only HDB. Read it correctly... all you need is to get rid of HDB and you will not be affected in other ways.


  12. #12
    Join Date
    May 2007
    Posts
    237

    Default

    No evidence PRs, pte pty owners pushing up HDB flat prices: Mah

    By ANGELA TAN

    SINGAPORE - There is no evidence that specific buyer groups, like permanent residents (PRs) and private property owners (PPOs) are driving up prices of HDB flats.

    National Development Minister Mah Bow Tan told Parliament on Friday that the median cash-over-value (COV) paid by PRs have been the same as the overall median COV paid for resale flats for the last two quarters.
    'Cases of PRs paying high COV are the exception, not the rule,' Mr Mah said.
    He said of the 37,205 resale transactions in 2009, 58 cases had COV exceeding $70,000 (US$49,995).
    Of this, only eight cases or 14 per cent involved PRs.
    Mr Mah added while PPOs pay higher COVs in general, their numbers are not large enough to drive up prices.
    'If we banned PPOs from buying HDB resale flats, what about HDB owners buying private properties? Should we ban that too?' he asked.
    'I would urge that we take a longer-term view and not over-react, and do things we regret and have to reverse down the road.'

    So no further action needed to control HDB prices except for the minor tweaks announced!


Similar Threads

  1. Tweak collective sale rules to avoid dislocation in market
    By reporter2 in forum En Bloc Discussion and News
    Replies: 1
    -: 11-04-18, 18:28
  2. Tweak property cooling measures to help retirees
    By reporter2 in forum Singapore Private Condominium Property Discussion and News
    Replies: 0
    -: 22-02-17, 20:37
  3. Tweak property policies to reduce household debt
    By reporter2 in forum Singapore Private Condominium Property Discussion and News
    Replies: 9
    -: 10-05-16, 01:00
  4. Property curbs keep speculators at bay
    By reporter2 in forum Singapore Private Condominium Property Discussion and News
    Replies: 0
    -: 26-09-13, 13:53
  5. New rules to curb credit card debt, unsecured loans
    By reporter2 in forum Finance and Legal
    Replies: 1
    -: 12-09-13, 16:28

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •