HDB HOUSING LAWS PASSED TOO FAST?

[new2mondrian]

new2mondrian

What I suggested is definitely not popular but I believe it will temper property prices.

As first time HDB owners, that actually means that they have deprived another really needy person of one queue space, subsidy (real or perceived) and govt grant, so if this group of people have done well enough to buy another private property without selling their HDB, they are well and truly sucessful in the Singapore dream, therefore should rightfully give up their subsidised flat, or at least pay back the difference in current market price and original purchase price and whatever grant they have taken. Or make it MANDATORY that they continue to stay in their HDB regardless of MOP and as long as they hold on to private property.

This will have the effect of freeing up more flats for those who cannot hold HDB and private pty and make others think twice about owning private property while still holding on to their HDBs and this would have a siginificant impact on increasing supply, as this HDB owner buying pte pty group is large and growing.

I have no qualms about private property owners buying HDB at open market prices including COVs, this would in effect enrich HDB owners and as a resale flat, there are no grants or subsidies taken so no foul.

In a truly democratic structure the rich must be able prosper and be rewarded for hard work and achievements. They less well off should be helped but not at the expense of the other less well off.

BTW I am curious as to your gender, your public profile shows you as male but sometimes you claim to be a mom

Actually I absolutely agree with your stand on making it absolutely mandatory for HDB dwellers (who own multiple private properties) stay in their HDB after the MOP. HDB is for self-stay, not for speculation nor rental. Allowing the concept of MOP and subletting opens a huge pandora box, not to mention social ills. You visit certain precincts in SengKang where 3 China-nationals families are crammed in 1 flat, and their furniture spilled all over the common corridor and the entire floor is almost fully rented to China/Indian tenants, you will know what I mean. Is this what Singaporeans want? Is this part of the remaking Singapore? It's time HDB returns to its fundamentals and relook its past policies.

[jonleelk]

Will the following satisfy majority of singapore citizens without causing too much impat to property prices?

• Every citizen husband and wife (can be citizen-citizen or citizen-PR) can only have 1 chance in buying directly from HDB. This is to ease the demand of new HDBs to cater for the new generations.
• After MOP of 5 yrs, can sell to upgrade or downgrade to another HDB, but can only buy from open market.
• If HDB is bought from open market, should not have any restriction, including PR, or singles. This will substain the demand of resale HDB and keep prices stable.
• Can keep existing HDB to rent out, provide fully paid, if only buying one private to stay (as one might want to move back to HDB should unfortunately things happen or when kids grow up and move out). Must sell HDB to buy 2nd private.

[amk]

In a truly democratic structure the rich must be able prosper and be rewarded for hard work and achievements.

Alright, for argument sake , why profiting from HDB policies should NOT be tolerated, and rewarded ? After all, that is also "hard work and achievements" isn't it ? Why profiting directly (i.e. buy new HDB and sell later to profit) is considered ok, whereas profiting more "intelligently" (i.e. KEEP the HDB but rent for yield thus retaining future upside) is considered not ok ?

To me, there is simply no such thing as "who is fairer". Hundreds of thousands of Singaporeans had profited from these HDB business since 1980s one way or the other. HDB had long long changed from an agency providing basic housing needs, to an agency providing Singaporeans with a source of income/wealth. The Gov is not even humble on this : ur HDB is supposed to be a long term appreciating asset. So every now and then there will always be a few twists of the policy to suit the market. MOP, renting rules, quota, whatever, all can be changed later if the market changes. Nothing to shout abt. HDB market always has a greater policy risk. This has always been the case.

[new2mondrian]

Can keep existing HDB to rent out, provide fully paid, if only buying one private to stay (as one might want to move back to HDB should unfortunately things happen or when kids grow up and move out). Must sell HDB to buy 2nd private.

Hahahhaa.... since I am adamant that my child should grow up amidst the masses in public housing, time for me to sell everything and find the largest FH land plot (aka 1 private property only) I can find (and afford) in D9/10/11.

Or hmmm.... I should start looking at overseas properties.... maybe New York or better still, London, esp since the GBP is at its historic low. anyone with any suggestions?

[Allthepies]

I think all these arguments on HDB stems from their outdated mission statement

"We provide affordable homes of quality and value."

Should quickly change it to something like this to stem out all arguments

"We provide homes of quality and value if u can afford it."

[The_Way_I_See_It]

Have u forgotten our Pledge? There may not be democracy in practice but to blatantly disregard it is anthr matter.

It has already publicly acknowledged the pledge is actually an aspiration nia ...Poor Sinkapoorean

[xebay11]

Alright, for argument sake , why profiting from HDB policies should NOT be tolerated, and rewarded ? After all, that is also "hard work and achievements" isn't it ? Why profiting directly (i.e. buy new HDB and sell later to profit) is considered ok, whereas profiting more "intelligently" (i.e. KEEP the HDB but rent for yield thus retaining future upside) is considered not ok ?

To me, there is simply no such thing as "who is fairer". Hundreds of thousands of Singaporeans had profited from these HDB business since 1980s one way or the other. HDB had long long changed from an agency providing basic housing needs, to an agency providing Singaporeans with a source of income/wealth. The Gov is not even humble on this : ur HDB is supposed to be a long term appreciating asset. So every now and then there will always be a few twists of the policy to suit the market. MOP, renting rules, quota, whatever, all can be changed later if the market changes. Nothing to shout abt. HDB market always has a greater policy risk. This has always been the case.

Selling and making a profit by selling later is tolerated as you do not artificially create demand by so called 'owning' two properties, holding HDB and leasing out to finance private property is like holding 2 carpark lots in a limited supply market, it is selfish and defeats the whole purpose of HDB being a shelter for those who really need it as it is used purely as an investment vehicle, which it should not be, especially at the expense of others.

Remember the purpose of HDB, it is not for intelligent investment.

[Condorich]

Selling and making a profit by selling later is tolerated as you do not artificially create demand by so called 'owning' two properties, holding HDB and leasing out to finance private property is like holding 2 carpark lots in a limited supply market, it is selfish and defeats the whole purpose of HDB being a shelter for those who really need it as it is used purely as an investment vehicle, which it should not be, especially at the expense of others.

Remember the purpose of HDB, it is not for intelligent investment.

A little secret.... holding two properties can be for holding 2 HDB's also...

Buy another in resale and delay the selling of the first one... can be a gap of a few years... guess what? Rental rich.

[Regulators]

another one, artificially divorce ur spouse and the two can buy 2 hdbs under single scheme. pack ur bags and go to another country and get married again and live there, whilst using rental income from the 2 hdbs to finance ur life abroad

A little secret.... holding two properties can be for holding 2 HDB's also...

Buy another in resale and delay the selling of the first one... can be a gap of a few years... guess what? Rental rich.

[Avatar]

If one owns a HDB and bought a private property. Is he allowed to stay in private property and rent out his HDB? I read somewhere in HDB website that this is not allowed and the person has to stay in HDB. Is it true?

[Regulators]

i think you have to fulfill MOP for HDB before you can lease out whole flat whether u own a pte or not. again i could be wrong coz the garmen comes out with new laws so fast...

If one owns a HDB and bought a private property. Is he allowed to stay in private property and rent out his HDB? I read somewhere in HDB website that this is not allowed and the person has to stay in HDB. Is it true?

[jonleelk]

If one owns a HDB and bought a private property. Is he allowed to stay in private property and rent out his HDB? I read somewhere in HDB website that this is not allowed and the person has to stay in HDB. Is it true?

Long long time ago cannot. Now can. After 5 and 3 years, depending on whether u bought with or without subsidy.

But must apply with HDB first, and usually get approved.

[amk]

Selling and making a profit by selling later is tolerated ...Remember the purpose of HDB, it is not for intelligent investment.

why not ? selling it later for a profit is no less "evil" than profiting it through other, more intelligent, means. You are profiting from the system. If you really want to be noble, then u should return the HDB to government when you have arrived and can afford a pte pty! To say selling to profit is ok, whereas renting it for yield is evil, is completely hypocritical.

Look, HDB has evolved. 30ys ago the mission was to provide ppl with basic housing needs. Today, it's much more than that. An HDB flat has become the main source of asset for many people. If you dun acknowledge that, whatever you argue is simply akin to asking for an ideal world. HDB is moderating the market with a series of rules. There is nothing evil abt it.

[mcmlxxvi]

another one, artificially divorce ur spouse and the two can buy 2 hdbs under single scheme. pack ur bags and go to another country and get married again and live there, whilst using rental income from the 2 hdbs to finance ur life abroad

I don't mind marrying someone who has that mindset...

[xebay11]

Long long time ago cannot. Now can. After 5 and 3 years, depending on whether u bought with or without subsidy.

But must apply with HDB first, and usually get approved.

Yes this was done to ease the rental shortage of foreigners in the past but this has brought on a bigger and more hard hitting set of problems which has caused recent HDB prices to spike.

Imagine 10 years ago, if you owned HDB and you bought pte pty, when the time came when the pte pty TOPed you had to sell your HDB as you could not rent it out to finance the new pty so easily due to long MOPs, some ppl I knew even sold their prime HDBs below valuation. But ever since the MOPs were shortened, alot of intelligent investors starting renting out their HDBs to finance their condos, even if they sold they would ask sky high COVs as they could easily hold on for rental yield.

[new2mondrian]

If one owns a HDB and bought a private property. Is he allowed to stay in private property and rent out his HDB? I read somewhere in HDB website that this is not allowed and the person has to stay in HDB. Is it true?

Actually there are many misconceptions over HDB ownership. As per current rules, if you purchase your HDB flat off the open (resale) market and do NOT enjoy a HDB concessionary loan (ie no first timer's grant from HDB and no concessionary interest rate loan of CPF+0.1%), you can:

1) Sell your flat after a 3 years MOP (minimum occupation period), which is revised from the previous MOP of 1 year; OR
2) Rent out the entire unit after a 3 years MOP

MOP excludes the time when unit is unoccupied. Trouble comes when people "illegally" sub-let the unit by locking 1 room (sometimes even the store-room) and exploit the definition of "whole unit" without fulfilling the MOP. This opens up the leeway for speculators who purchase flats for rental yield and not self-occupation (drive up demand for flats).

If you purchase the flat directly from HDB (at preferential rates) or enjoy a first timer's grant of $30-$40k from HDB, THEN you can:

1) Sell your flat after a 5 years MOP (minimum occupation period); OR
2) Rent out the entire unit after a 5 years MOP

Currently, there is no requirement that HDB owners who own private properties cannot lease out their HDB and stay in private. This is allowed by HDB. All private property(ies) ownership however, is to be made known to the HDB by way of declaration either at point of resale property purchase or through the HDB branch office. In fact, one can easily find a find a number of fellow forummers here who own (and lease) out their HDB and stay in private. This is allowed by the HDB as long as the above rules are adhered to.

[Regulators]

I think you guys have forgotten that our garmen has all along been promoting the spirit of enterprise in our society be it the young and the old. buying something low and selling it high is a cornerstone fundamental of entrepreneurship, be it selling commodities in an efficient or non-efficient market.

why not ? selling it later for a profit is no less "evil" than profiting it through other, more intelligent, means. You are profiting from the system. If you really want to be noble, then u should return the HDB to government when you have arrived and can afford a pte pty! To say selling to profit is ok, whereas renting it for yield is evil, is completely hypocritical.

Look, HDB has evolved. 30ys ago the mission was to provide ppl with basic housing needs. Today, it's much more than that. An HDB flat has become the main source of asset for many people. If you dun acknowledge that, whatever you argue is simply akin to asking for an ideal world. HDB is moderating the market with a series of rules. There is nothing evil abt it.

[xebay11]

why not ? selling it later for a profit is no less "evil" than profiting it through other, more intelligent, means. You are profiting from the system. If you really want to be noble, then u should return the HDB to government when you have arrived and can afford a pte pty! To say selling to profit is ok, whereas renting it for yield is evil, is completely hypocritical.

Selling for a profit later is a lesser evil as the profit is just inflation driven, buying to rent out causes artificial demand.

Look, HDB has evolved. 30ys ago the mission was to provide ppl with basic housing needs. Today, it's much more than that. An HDB flat has become the main source of asset for many people. If you dun acknowledge that, whatever you argue is simply akin to asking for an ideal world. HDB is moderating the market with a series of rules. There is nothing evil abt it.

Don't you read the papers? There is a call now to treat HDBs as homes and not just assets. I only see HDB moderating resale HDBs by increasing MOPs, which I see little benefit, as was pointed out, 3 years is a long time and with the economy being so unstable, 3 years means property becomes illiquid and not able to help in a period of downturn.

The crux of the matter is do you not admit that holding subsidized HDB to finance private property does not cause artificial inflation?

[mcmlxxvi]

Yes this was done to ease the rental shortage of foreigners in the past but this has brought on a bigger and more hard hitting set of problems which has caused recent HDB prices to spike.

Imagine 10 years ago, if you owned HDB and you bought pte pty, when the time came when the pte pty TOPed you had to sell your HDB as you could not rent it out to finance the new pty so easily due to long MOPs, some ppl I knew even sold their prime HDBs below valuation. But ever since the MOPs were shortened, alot of intelligent investors starting renting out their HDBs to finance their condos, even if they sold they would ask sky high COVs as they could easily hold on for rental yield.

Do you think then, that with the new 3-yr MOP, developer sales today will be more hot as hdb owners *will* really be staying in the newly purchased HDB while waiting for the condo/apt to TOP. And they can and are prepared to wait for 2-3 years while staying in the HDB.

[mcmlxxvi]

I don't see anything wrong with renting out your HDB and maximizing your yield as it is in the same vein as the typical Singaporean competitive (kiasu) mindset that brought us to where we are today.

In fact this should be commended by the gahmen for Entreprenuerism. Our young minds will be confused if on one hand you say it is good thing and on the other hand the action that translates is deemed as bad. Short of the extreme case of turning your HDB into workers dorm, the socially responsible version should preclude anything that causes problems for the neighbours. Anything else within boundaries should be acceptable.

[amk]

Selling for a profit later ..... as the profit is just inflation driven

you really believe in that ? A Sengkand HDB bought 5ys ago at 240k, sold at 580k today is because of inflation only ?

The crux of the matter is do you not admit that holding subsidized HDB to finance private property does not cause artificial inflation?

No this is not the crux the matter. To me, the crux of the matter is, why you say one way of profiting from HDB policies is more evil than the other ? If your noble notion of HDB stands, no one should profit from it. If you allow profiting from HDB system, then you should respect the market. There is no such thing as "less evil". All are not fair. We just need rules to moderate the market. You cannot accuse the ones profiting on yield as evil, and accepting those profiting on capital gain as "normal".

[Regulators]

if hdb really so noble and is only concerned with providing housing for the people, they should just sell it to the masses and when anyone wants to give up his flat, he should sell it back to hdb at a higher price pegged to the growth of the economy on a periodic basis (coz garmen says hdb property is an appreciating asset). In this way the garmen can release the flat to another needy household and the cycle goes on with everyone being happy without prices being artificially inflated.

[xebay11]

I don't see anything wrong with renting out your HDB and maximizing your yield as it is in the same vein as the typical Singaporean competitive (kiasu) mindset that brought us to where we are today.

In fact this should be commended by the gahmen for Entreprenuerism. Our young minds will be confused if on one hand you say it is good thing and on the other hand the action that translates is deemed as bad.

Fine if it is pte pty but not OK if the commodity is HDB and is limited and highly subsidised.

If HDBs were sold on resale mkt with no subsidy or grants, then there is nothing wrong with renting out your HDB for rental yield.

See the difference?

Take A's case for eg. A sold his HDB to acquire pte property in 2004, minimum MOP for rental was 10 years then and his pte pty TOP in 2004, he had to sell, or else not enough finances to finance the pte pty.

Now a few years later, being more established A's earning increased and as a pte pty owner, A bought HDB resale for rental yield, A contributed to society by actually enriching C (distribution of wealth) and not taking any grants or subsidies and yet still enjoy rental subsidy as smart investor.

B on the other hand is HDB first time owner in 2003, gets all subsidies and grants, he bought condo and TOP in 2008, he does not sell, instead he rents out to finance condo.

B's example is not equal to A, although both hold 2 properties, as B never enriched or redistributed his wealth to C and B instead took the subsidies and grants of HDB of D.

Of course B looks smarter, but think about the society as a whole, who is more valuable to society A or B?

So which is lesser or two evils?

[xebay11]

you really believe in that ? A Sengkand HDB bought 5ys ago at 240k, sold at 580k today is because of inflation only ?


No this is not the crux the matter. To me, the crux of the matter is, why you say one way of profiting from HDB policies is more evil than the other ? If your noble notion of HDB stands, no one should profit from it. If you allow profiting from HDB system, then you should respect the market. There is no such thing as "less evil". All are not fair. We just need rules to moderate the market. You cannot accuse the ones profiting on yield as evil, and accepting those profiting on capital gain as "normal".

See my reply to 1976.

[amk]

See my reply to 1976.

it still smells of hypocrisy. really.
like regulators said, you either get very noble all the way, and dun profit from it, or you play dirty. dun tell me the "degree" of dirtiness makes a difference. Like stealing $50 is better than stealing $5000 ? You profited from the system, period.

Looks like this discussion is going no where, so shall we call it a day and agree to disagree ? (bonus: you can have the last word )

[xebay11]

it still smells of hypocrisy. really.
like regulators said, you either get very noble all the way, and dun profit from it, or you play dirty. dun tell me the "degree" of dirtiness makes a difference. Like stealing $50 is better than stealing $5000 ? You profited from the system, period.

Looks like this discussion is going no where, so shall we call it a day and agree to disagree ? (bonus: you can have the last word )

OK lah.

[maisonjai]

HDB has created an environment for home sellers to thrive, i.e. future valuations are always based on past transacted prices in the area (which will always and almost certainly be higher each time)..

would like to add another point to it, new flats' prices will be based on surrounding resale prices but with a discount

dont even need to look further at surrounding flats, within Pinnacle itself Mr L case. 37 floors down but 28% up in price.

let's see what happens when interest rates are up. Sit tight

[Avatar]

would like to add another point to it, new flats' prices will be based on surrounding resale prices but with a discount

dont even need to look further at surrounding flats, within Pinnacle itself Mr L case. 37 floors down but 28% up in price.

let's see what happens when interest rates are up. Sit tight

Yes..worst case scenario for those (owning both HDB and private property) who rely on HDB rental income to finance their loan for pte property..e.g. high leverage, is
1) Interest rate goes up and
2) Supply outweights demand resulting in oversupply and unit not rented out

[HP65]

How could it be that if you "had just exited the mkt 3 mths late," you're "probably dead by now"?

Leedon Heights was en blocked in April 2007 to GuocoLand for $835 million, so each of the 314 units would have fetched $2.66 million, on average.

Instead, it should be that if you "had not exited the mkt at all," you "would make even more money by now"?

This is another example of the benefits of Propertism Rule No. 1 - Properties should only be bought. Not sold. Unless through En Bloc. Then quickly get a replacement property.

Another benefit of believing in Propertism, the belief that property prices will always go up in the long term, is that there is no need to be afraid of "speculation" or "burnt flesh".

For example, 1981 was a highly speculative year when "RIDICULOUS PRICES" were set.

See how "RIDICULOUS" some of these prices were, e.g. 2,400 sq ft Chen Yuan Apartment (the former site of Urbana at 1 River Valley Close) asking $800,000 or $333 psf.

RIDICULOUS!!!

I sold both my leedon and tulip condo to the same HK investor (leaseback the tulip from him) in 1996. If I had practiced your stupid nonsense, I wouldn't have made my 1st mio which allows me to rollover and purchase a few properties in 1998, and that is excluding the 10 yrs of opportunity costs forgone until leedon was enbloc in 2007 if i had held on to it. And not forgetting, Tulip is still looking for a buyer now as we speak. So I'm sorry, you are just talking rubbish.

[xebay11]

I sold both my leedon and tulip condo to the same HK investor (leaseback the tulip from him) in 1996. If I had practiced your stupid nonsense, I wouldn't have made my 1st mio which allows me to rollover and purchase a few properties in 1998, and that is excluding the 10 yrs of opportunity costs forgone until leedon was enbloc in 2007 if i had held on to it. And not forgetting, Tulip is still looking for a buyer now as we speak. So I'm sorry, you are just talking rubbish.

Yes agreed, that is called first mover advantage, which in property, is an even more potent weapon than holding on. I remember telling jlrx that in the CK Tang thread, where he mentioned how the Tang family is now worth much more as they held on to the property in Orchard Rd, but if you compare that with FEO's NTF, he sold Lucky Plaza and Far East Plaza and rolled over many more times than the Tang family and is now considered one of the richest men in Singapore, whereas the Tangs are just sitting on paper gains.