Cool HDB or private property?
by Leong Sze Hian/
I refer to the article “Home prices may fall 30%, say analysts” (ST, Dec 9).
Arguably, a bigger problem affecting many Singaporeans may be rising HDB prices, rather than the private property market.
In the last quarter, HDB resale prices rose 3.8 per cent, higher than the 3.1 per cent in the second quarter, compared to 1.3 and 2 per cent, respectively, for private residential or property.
Higher HDB prices?
What are some of the possible implications of this latest cooling measure for private property?
Those who are contemplating buying private property, may switch to buy a HDB flat instead, if they expect the private property market to drop a lot. Some who may be thinking of upgrading to a private property, may upgrade to a bigger HDB flat instead. Existing private property owners may sell to cash out and buy a HDB flat, anticipating a fall in private property prices. Some who may be thinking of increasing their asset portfolio exposure to private property may upgrade to a high-vale HDB flat, like the Design, Build and Sell Scheme (DBSS) or Executive Condo (EC).
Also, foreigners and permanent residents (PRs) may be more inclined to apply for citizenship.
Since the Growth Dividend web site states that a dual citizens is “not eligible for the Growth Dividend and CPF Medisave Top-Up as Singapore does not recognise dual citizenship”, does it mean that there are actually dual citizens, who also hold Singapore citizenship?
The demand for HDB flats may become higher, and push prices to rise.
Perhaps we could consider some cooling measures for the HDB market such as:-
- PRs who have met the Minimum Occupation Period (MOD) on their existing HDB flat, should not be allowed to keep their HDB flat when they buy a private property.
- PRs have to wait for a year after getting permanent residence, before they can buy a HDB flat.
- Another possible measure to cool the HDB market, may be to gradually increase the price difference between new Build-to-order BTO flats and resale flats, under the HDB’s Market Subsidy Pricing policy.
- Perhaps another measure to cool the property market, is to accept the market bid for land sales, instead of arbitrarily rejecting bids when the price is deemed to be too low.
Cooling measures should not always generate more revenue, and avoid any loss in revenue, like lower land sale prices.
Its akin to having your cake, and eating it too!