SDP proposes non-open market flats in housing policy

[yellowarse]

[TABLE="width: 100%"]
<tbody>[TR]
[TD="width: 90%"][TABLE="width: 100%"]
<tbody>[TR]
[TD]SDP proposes non-open market flats in housing policy[/TD]
[TD][/TD]
[/TR]
</tbody>[/TABLE]
[/TD]
[/TR]
[TR]
[TD="class: eDetails, colspan: 2"]Added on: Sunday Yesterday
Total comments: 0[/TD]
[/TR]
[TR]
[TD="class: eMessage"]Singaporeans Democrats

The SDP has proposed a new Non-Open Market, or NOM, scheme in public housing to help reduce prices of HDB flats. Under the scheme a segment of new HDB flats will be priced at cost minus the land "cost" that is currently factored into HDB prices.

As a result, prices of flats will be substantially lower, ranging from $70,000 for 2-room flats to $240,000 for 5-room flats.

As stated, the prices reflect only the cost of building a flat (that is, administrative, material, labour costs only).

As the name implies, however, flats bought under this scheme will not be allowed to be re-sold in the open market. Owners wishing to dispose of their NOM flats will have to sell them back to the HDB.

This innovative idea was introduced at today's launch of SDP's alternative housing policy,Housing A Nation: Holistic Policies For Affordable Homes. The paper was presented by Mr Jeremy Chen (pictured below), a decision science expert, who is currently pursuing his PhD at the National University of Singapore.

Others involved in the SDP's housing panel include Mr David Goh, an accountant and property consultant; Dr Leong Yan Hoi, a medical practitioner and member of the SDP's healthcare panel; and Dr Toh Beng Chye, also a medical practitioner and another member of the SDP's healthcare panel.

Singaporeans who purchase these flats will take an estimated 9 to 15 years to pay off their housing loans (based on an interest rate of 3 percent) using no more than 20 percent of their gross income. This further reduces the financial burden of home buyers many of whom currently service their loans on a 30-year basis.

The lowered housing expenditure will free up capital for homeowners to save for their retirement or use it for other purposes such as starting a business, paying for education or medical care, investing in other instruments, etc.

NOM flats will only be available to Singapore citizens. Owners of such flats will not be allowed to own private property and will only be allowed to rent out their flats under strict restrictions such as when owners are posted overseas in their work.

The rationale behind this scheme is that the Government should not profit from Singaporeans when it comes to public housing and Singaporeans should not use it as a means of investment for capital gain. Public housing is a social good and should be used to meet the housing needs of the population, not profit-making for the government or citizens.

Current homeowners

Existing HDB owners of flats can continue to sell their flats in the open market, hence they will be termed Open-Market (OM) flats. In addition, OM flat-owners can simultaneously own private property or rent out their flats. In other words, policies regulating OM flats will remain relatively unchanged.

However, owners who wish to dispose of their OM flats to take advantage of the NOM scheme can simply convert the status of their existing flats.

The Government will return the difference between the original price of their flats (as purchased from the HDB) and price of an equivalent NOM flat subject to a cap. This money will be credited back to the owner's CPF account or used to pay any outstanding housing loan that one may have taken.

The converted flats will then be subjected to rules governing NOM flats.

Advantage homeowners

The NOM scheme essentially gives Singaporeans an added option of buying a home at a greatly reduced price. Current HDB owners also have the choice of converting their flats to an NOM one if they so wish. As mentioned this will free up capital for use for other purposes. However, the trade off will be that they are bound by the restrictions under the scheme.

Those who wish to remain on the OM scheme can continue to do so and be able to sell/rent their properties on the open market. Of course, they are subjected to the vagaries of the open housing market.

First-time HDB buyers can choose to buy an OM or NOM flat.

Housing market

Under the SDP plan, there are enough restrictions/disincentives under the NOM scheme coupled with existing incentives under the OM system that will discourage homeowners from making an exodus out of the OM market into the NOM scheme.

In addition, the NOM scheme will be introduced in a gradual manner to prevent a shock to the existing system and a sudden market correction.

This will provide stability to the OM prices while making NOM flats affordable for those who want it. This is the strength of the SDP plan. We envisage that if there is going to be a market correction of prices (which is the desired outcome), it will take place in a gradual and measured way that will not cause financial distress to current homeowners.

Other policy initiatives

Housing a Nation also makes the following policy recommendations:

1. Implement the Young Families Priority Scheme (YFPS), a targeted priority scheme that grants balloting priority for first-timer families with children or couples who are expectant for Balance Flats or new Built-To-Order Flats in non-mature estates.

2. Increase the inclusiveness of public housing by enabling single-parent families with children as well as singles to purchase and own their flats. The SDP plan will also increase the range of lower-income Singaporeans for housing rental.

3. Enhance the Lease Buy-Back Scheme to more effectively assist needy senior citizens to have a secure retirement.

4. Bar Permanent Residents and non-citizens from buying or renting NOM flats.

Under the SDP plan, the NOM system will increase the affordability and access to public housing for all
Singaporeans. While our suggestions for young families and Singaporeans with special needs will ensure our public housing system is caring and inclusive.

Collectively, these SDP policies can contribute towards resolving some of the major problems affecting public housing in Singapore today.

The full document of the paper can be viewed here. As this paper is offered for public consultation, we welcome comments and suggestions. Please send your feedback to:[email protected].


More event photos at SDP's facebook album.[/TD]
[/TR]
</tbody>[/TABLE]

 

[valiant20]

A nice policy..

But Public Housing is meant to be like that in the first place??

No thanks to the Pappies & MBT!!

 

[tanwahp]

Innovative doesn't mean better.

If my flat doesn't go up in price whereas other flats or pte properties go up, I will be left behind.

It means the gap between the rich and poor will only become wider.

 

[yellowarse]

A nice policy..

But Public Housing is meant to be like that in the first place??

No thanks to the Pappies & MBT!!

Yes, public housing is meant to be like that in the first place. It's the PAP who perverted the idea of public housing and turned it into a speculative investment asset.

In many advanced countries, public housing is only for rental, never for asset appreciation and capital gains.

 

[skponggol]

Innovative doesn't mean better.

If my flat doesn't go up in price whereas other flats or pte properties go up, I will be left behind.

It means the gap between the rich and poor will only become wider.

What happen when the price come down? Then you would left very very far behind........The Worker's Party view is always so doggedly one-dimensional and slavishly follow that of their PAP puppet-masters...


Btw, what is WP Housing Proposals????....Vichy WP eunuchs has been wayang around without any clothes yet still shamelessly poke fun at holes on other people's clothes. Despicable.

.....

 

[tanwahp]

What happen when the price come down? Then you would left very very far behind........The Worker's Party view is always so doggedly one-dimensional and slavishly follow that of their PAP puppet-masters...

If price of normal flats come down, won't NOM flats become the more expensive flats in the market? Appreciate that you try to think before you talk.

Btw, what is WP Housing Proposals????....Vichy WP eunuchs has been wayang around without any clothes yet still shamelessly poke fun at holes on other people's clothes. Despicable.
.....

That's because you keep thinking I am some leader of WP. Being a WP supporter doesn't mean I am a WP leader or a blind wholehearted supporter. If you look for answers in the right place, you might get it.

 

[skponggol]

If price of normal flats come down, won't NOM flats become the more expensive flats in the market? Appreciate that you try to think before you talk.

Do you know the meaning of NOM flats????

You don't can can't sell them in the open market but sell back to HDB....so it's not affected by market crash.


Pls continue to talk and not think.......Keep up the good work and reputation of Vichy WP.

.....

 

[skponggol]

That's because you keep thinking I am some leader of WP. Being a WP supporter doesn't mean I am a WP leader or a blind wholehearted supporter. If you look for answers in the right place, you might get it.

....

有什么样的人, 就会养出什么样的狗

.....

 

[yellowarse]

If price of normal flats come down, won't NOM flats become the more expensive flats in the market? Appreciate that you try to think before you talk.

NOM flats will always be sold at cost. No land cost component. They will always be cheaper than open market flats (BTO or resale).

In the event of a crash, owners can convert from OM to NOM, giving some support to the market.

Public housing should never be marked to market pricing.

 

[Fook Seng]

Innovative doesn't mean better.

If my flat doesn't go up in price whereas other flats or pte properties go up, I will be left behind.

It means the gap between the rich and poor will only become wider.

The problem is what is once done cannot be undone easily, especially it cannot be undone by something new that totally ignores what has gone before.

To undo what has been done before you need to do it in a few phases over several years. You need to allow some things to catch up and control others from going up further. Otherwise a lot of innocent parties will be affected.

 

[tanwahp]

Do you know the meaning of NOM flats????

You don't can can't sell them in the open market but sell back to HDB....so it's not affected by market crash.


Pls continue to talk and not think.......Keep up the good work and reputation of Vichy WP.

.....

You're saying that the benefits of NOM can be felt only if there is a crash? I don't think that was the intention of SDP's paper. It was to allow some Singaporeans to afford to buy flats, not protect them from downturns.

 

[skponggol]

You're saying that the benefits of NOM can be felt only if there is a crash? I don't think that was the intention of SDP's paper. It was to allow some Singaporeans to afford to buy flats, not protect them from downturns.

It is just one of its many benefits......It helps people when market goes up, it protects people when market down.

Again, Vichy WP eunuchs are hopelessly one-dimensional.....No wonder they are always so silent on every issues.

....

....

 

[skponggol]

You're saying that the benefits of NOM can be felt only if there is a crash? I don't think that was the intention of SDP's paper. It was to allow some Singaporeans to afford to buy flats, not protect them from downturns.

....

It also remove the unwanted cost of high commissions charged by the rich greedy property agents....whom the Vichy WP is so desperate and so eager to protect and suck up to.


No wonder Vichy WP eunuchs is so against this plan as it affects the rice-bowls of the property agents, a vocal lobby within the party.

....

....

 

[yellowarse]

You're saying that the benefits of NOM can be felt only if there is a crash? I don't think that was the intention of SDP's paper. It was to allow some Singaporeans to afford to buy flats, not protect them from downturns.

You're right. The main aim is to make public housing affordable for all, and also to address the long waiting times for BTO flats currently.

There are other spinoffs: couples can settle down earlier, increased procreation, more money for retirement, children's education, private enterprise, less speculation, lower risk of asset bubble. Open-market conversion to non-open market gives some protection in a crash.

 

[tanwahp]

In the event of a crash, owners can convert from OM to NOM, giving some support to the market.

That sounds like a good idea.

But how helpful it is for a policy that benefits only if there is a crash. In a crash, people can choose not to sell. But in a hike, NOM property is stagnant while OM property inflates. This will create additional wealth gap between the two classes.

Public housing should never be marked to market pricing.

Then SDP should have suggested that all HDB flats come under the NOM scheme in the long run. There is no point leaving some flats for open market because it puts pressure on NOM in some way no matter how.

 

[tanwahp]

....

It also remove the unwanted cost of high commissions charged by the rich greedy property agents....whom the Vichy WP is so desperate and so eager to protect and suck up to.

....

Haiz. BTOs also do not need property agents to transact.

I think you are just wasting my time here.

 

[yellowarse]

Then SDP should have suggested that all HDB flats come under the NOM scheme in the long run. There is no point leaving some flats for open market because it puts pressure on NOM in some way no matter how.

If you introduce a new policy and say all HDB flats will be NOM in future, you'll piss off many, because they've been conditioned to see their flats as a cash cow: Buy new (subsidized), sell on resale for capital gain.

So better to change mindsets slowly by introducing NOM as an option, while retaining the choice for people to buy OM if they wish. In due time if more and more want NOM, then fewer OM flats will be built in future. That way, you let the people decide the pace of change.

 

[tanwahp]

You're right. The main aim is to make public housing affordable for all, and also to address the long waiting times for BTO flats currently.

There are other spinoffs: couples can settle down earlier, increased procreation, more money for retirement, children's education, private enterprise, less speculation, lower risk of asset bubble. Open-market conversion to non-open market gives some protection in a crash.

Doesn't sound to me like NOM is to reduce waiting time. You also need time to build these NOM flats.

 

[tanwahp]

If you introduce a new policy and say all HDB flats will be NOM in future, you'll piss off many, because they've been conditioned to see their flats as a cash cow: Buy new (subsidized), sell on resale for capital gain.

Not true. What SDP is effectively suggesting is to move close back to the cost-based housing policy that PAP had before Goh Chok Tong took over. I am sure Singaporeans welcome that.

NOM flats have to be build from scratch. I don't see how it can be implemented from existing flats. When the old flats go via enbloc, new flats can be built under NOM. As Fook Sing said, it's going to take generations.

 

[yellowarse]

Doesn't sound to me like NOM is to reduce waiting time. You also need time to build these NOM flats.

A key feature of the plan is, in addition to NOM flats, a buffer stock of flats will be built so that those with high priority (families with young children, married couples who are expectant) will be able to get their flats quickly:

SDP Housing Plan