I attempt to analyse MBT’s recent housing policy impact into a future time period. In my honest opinion, ultimately over time, it not only divide the country, it actually segregation the population and give PRs a better advantage over citizens here.
Analysis of various groups below :
1. HDB-only owners (citizens & PRs). This group has option to stay within HDB segment and not venture into private property, though if they wanted to, they can. If they do, they will become categorized as in (2) below. Note that PRs can also buy private properties back in their home country without any implications here, in the event they goes back after making enough here, or already still staying outside of Singapore while renting out their HDB here. Best of both worlds for PRs.
All new home buyers, be it first-time citizen buyers or PRs, will likely buy a HDB as their first pty to ensure they hold a HDB and to prevent being stuck in scenario (3) below, thereby pushing HDB price up by their demand of HDB.
With increase in cap from $8K to $10K for DBSS flats, this increased the pool of buyers to compete for HDB apts.
2. Owners of HDB & private ptys. This group consists of citizens and PRs, is expected to hang on to their HDB while continue to invest in private ptys. Hence private ptys will still have demand from this group.
They are not expected to sell their HDB if possible, as once they sell it, they will be re-categorized as private-only group below and cannot buy another HDB without selling ALL their current private ptys. Hence , supply of HDB in resale will drop, possibly supporting a price increase due to demand from influx of PRs. New HDB being launched will have a 5-year MOP and not expected to solve the immediate supply problem make worst by this group holding on to their HDB.
3. Owners of private-only. These group CANNOT buy HDB even if they are citizens without selling off all their private ptys. Citizens are being denied owning a HDB flat. Their focus will be on private ptys for own-stay or investment, or possibly buy ptys in JB to reduce cost-of-living for their retirement. The latter scenario is detrimental to the economy of Singapore.
Based on above, over time, the citizen is likely to be split into 3 pty groups, ie., a private population, a HDB population, and a smaller group that owns both HDB+private ptys.
With each group having its ‘captive’ buyers, and continued influx of PRs, both segments of ptys will continue to increase in price. Seller Stamp Duty will increase selling price as seller will include this cost to it as seen in the implementation earlier this year. Coupled with a minimum reserve price for land release and increase in Development Charge, how is the final selling price expected to fall, given the high cost to developers?
My analysis points to a possibility of not only rise of property prices of HDB and private will not be reined in, it will result in a divided population, with PRs having the best of both worlds. These new policies created a new problem of benefit-differentiation within citizens. This go against the national objective of the past leaders of the country and LHL’s ‘inclusive society’ by segregating the population. Therefore, MBT’s policies seemed like a knee-jerk, plaster-the-wound solution with not enough think-through before implementation, just to please some citizens and the ONLY objective is to recover possible lost votes of younger generations, in time for the coming election. In the long term, the policies may cause the country to be divided into categories of population, does not solve the problem of supply and demand, and the benefits to citizens versus PRs.
There likely be many scenarios that problems may be caused by these policies. Intention of this thread is solely for serious discussion of MBT’s housing policies only. All comments and alternative views are welcomed.
Analysis of various groups below :
1. HDB-only owners (citizens & PRs). This group has option to stay within HDB segment and not venture into private property, though if they wanted to, they can. If they do, they will become categorized as in (2) below. Note that PRs can also buy private properties back in their home country without any implications here, in the event they goes back after making enough here, or already still staying outside of Singapore while renting out their HDB here. Best of both worlds for PRs.
All new home buyers, be it first-time citizen buyers or PRs, will likely buy a HDB as their first pty to ensure they hold a HDB and to prevent being stuck in scenario (3) below, thereby pushing HDB price up by their demand of HDB.
With increase in cap from $8K to $10K for DBSS flats, this increased the pool of buyers to compete for HDB apts.
2. Owners of HDB & private ptys. This group consists of citizens and PRs, is expected to hang on to their HDB while continue to invest in private ptys. Hence private ptys will still have demand from this group.
They are not expected to sell their HDB if possible, as once they sell it, they will be re-categorized as private-only group below and cannot buy another HDB without selling ALL their current private ptys. Hence , supply of HDB in resale will drop, possibly supporting a price increase due to demand from influx of PRs. New HDB being launched will have a 5-year MOP and not expected to solve the immediate supply problem make worst by this group holding on to their HDB.
3. Owners of private-only. These group CANNOT buy HDB even if they are citizens without selling off all their private ptys. Citizens are being denied owning a HDB flat. Their focus will be on private ptys for own-stay or investment, or possibly buy ptys in JB to reduce cost-of-living for their retirement. The latter scenario is detrimental to the economy of Singapore.
Based on above, over time, the citizen is likely to be split into 3 pty groups, ie., a private population, a HDB population, and a smaller group that owns both HDB+private ptys.
With each group having its ‘captive’ buyers, and continued influx of PRs, both segments of ptys will continue to increase in price. Seller Stamp Duty will increase selling price as seller will include this cost to it as seen in the implementation earlier this year. Coupled with a minimum reserve price for land release and increase in Development Charge, how is the final selling price expected to fall, given the high cost to developers?
My analysis points to a possibility of not only rise of property prices of HDB and private will not be reined in, it will result in a divided population, with PRs having the best of both worlds. These new policies created a new problem of benefit-differentiation within citizens. This go against the national objective of the past leaders of the country and LHL’s ‘inclusive society’ by segregating the population. Therefore, MBT’s policies seemed like a knee-jerk, plaster-the-wound solution with not enough think-through before implementation, just to please some citizens and the ONLY objective is to recover possible lost votes of younger generations, in time for the coming election. In the long term, the policies may cause the country to be divided into categories of population, does not solve the problem of supply and demand, and the benefits to citizens versus PRs.
There likely be many scenarios that problems may be caused by these policies. Intention of this thread is solely for serious discussion of MBT’s housing policies only. All comments and alternative views are welcomed.