HDB Flats:Minimum Occupation Period for non-subsidised flats revised upwards to 3yrs

[Mdm Tang]

http://www.channelnewsasia.com/stories/singaporelocalnews/view/1041780/1/.html




Minimum Occupation Period for non-subsidised flats revised upwards


By Joanne Chen, Channel NewsAsia | Posted: 05 March 2010 2012 hrs



HDB flats



SINGAPORE: The Minimum Occupation Period (MOP) for the resale of non-subsidised HDB flats has been revised upwards to three years.

Announcing the change in Parliament on Friday, National Development Minister Mah Bow Tan said the objective of such a move was to reinforce the idea that HDB flats are for owner-occupation.

He stressed that flats are not meant for speculation or short-term profit.

And with the extension of the MOP, he said the demand in the resale market will more accurately reflect the interest from buyers who are buying flats for occupation.

Non-subsidised HDB flats refer to resale flats bought without a CPF Housing Grant.

Currently, those who buy such flats with an HDB loan are subjected to an MOP of 2.5 years.

[COLOR="_______"]Those who take a bank loan or do not take a loan at all are subjected to an MOP of one year. [/COLOR]
The revised MOP takes effect from Friday but existing lessees of non-subsidised flats will not be affected. - CNA/vm

 

[Mdm Tang]

Re: HDB Flats:Minimum Occupation Period for non-subsidised flats revised upwards to 3

Dear Brothers ,


Does it means that Sing and PR s who now buy


resale HDB flats with Banks loan must now stay for


min 3 years ???

 

[ChaoPappyPoodle]

Re: HDB Flats:Minimum Occupation Period for non-subsidised flats revised upwards to 3

There is only a 6 month difference from what was there previously. Not a big deal is it?

Even the $10K requirement isn't going to affect FTs as they will be gainfully employed and many even have good salaries.

If the HDB wants to maintain prices then they should build more flats. They let in almsot a hundred thousand last year and yet built only 15,000 new flats.

More homes sold means more money for the PAP via stamp duties and there will be renovation and other expenses that will add to GST collected.

Never trust the PAPies when they say they give you something. We all should know that by now. :oIo:

Elections are coming! VOte them out. If they win the next election, you can be assured that in five years' time, there will be close to half a million of new FTs coming to Singapore. You want? Ask everyone you know if they want that.

Vote them out!

 

[funnyz]

Re: HDB Flats:Minimum Occupation Period for non-subsidised flats revised upwards to 3

Even the $10K requirement isn't going to affect FTs as they will be gainfully employed and many even have good salaries.

Is the 10K fully in cash or cpf or combination of both?

 

[longbow]

Re: HDB Flats:Minimum Occupation Period for non-subsidised flats revised upwards to 3

A lot of knee jerk reaction - election is round the corner.

The solution as a poster mentions is to increase supply of HDB flats. However they must be careful not to flood the market with new HDBs. There was a mismatch in the past and lets hope there will not be an over reaction in the future. This is important so that there will not be a collapse in asset prices. 80% of pop owns an HDB and most will not want to see the prices of their flats go down. This loss of wealth effect may have repercussions through the economy.

They should temper the price increases but at the same time increase grants for new buyers.

Perhaps opposition is trying to push them into making such a mistake - causing a collapse in housing prices. Or maybe they want to engineer price collapse and say, see we need the FTs

 

[ChaoPappyPoodle]

Re: HDB Flats:Minimum Occupation Period for non-subsidised flats revised upwards to 3

A lot of knee jerk reaction - election is round the corner.

The solution as a poster mentions is to increase supply of HDB flats. However they must be careful not to flood the market with new HDBs. There was a mismatch in the past and lets hope there will not be an over reaction in the future. This is important so that there will not be a collapse in asset prices. 80% of pop owns an HDB and most will not want to see the prices of their flats go down. This loss of wealth effect may have repercussions through the economy.

They should temper the price increases but at the same time increase grants for new buyers.

Perhaps opposition is trying to push them into making such a mistake - causing a collapse in housing prices. Or maybe they want to engineer price collapse and say, see we need the FTs

Overbuilding does not have to lead to overselling BUT building less than 20k when almost 4 times that number have come in as FTs and locals themselves setting up a new life and requiring a home is ridiculous.

I think you read too much into the situation with regards to the political aspects.

As for devaluing of home prices, it can be managed as long as market forces and especially incomes support it. Remember that not all homes are fully paid for and since most are excessively valued, there will not be such a negative impact as one would expect if the situation is managed by a reduction in future payments - to reflect the current valueof the flat.

SO, do not take it as necessarily bad that HDB flat prices are naturally devalued. The garment coffers will not be aversely affected because they actually spent very little to build them and most of the land were acquired for very little.

The only losers are SLA (Land Authority) and the banks that provided the loan. If we can 'give away' billions and even had the intention to lend Indonesia 18billion, then why don't we use a few billions to help ease problems that banks may have? Of course we can and we should.

It is true that flats are already too expensive so why should it continue to be so? Market forces are not making them pricey, rather it is the HDB that has priced flats at the sky high prices. All can be managed but the sooner the better before the wounds gets too deep.

 

[allanlee]

Re: HDB Flats:Minimum Occupation Period for non-subsidised flats revised upwards to 3

This is all a wayang show to con the peasants........ they should implement into law that those PRs who buy HDB flats must convert to citizenship within Xx years or have their pigeonhole taken back by HDB.

 

[longbow]

Re: HDB Flats:Minimum Occupation Period for non-subsidised flats revised upwards to 3

Do not quite understand your angle with regard to devaluation. If I buy prop for $350K and finance $300K devaluation could put me underwater. The banks are also affected because their 10% to 20% safety margin is gone. The current market for resale HDB is supported by higher incomes. The only problem is that the high income people are the new PR with the good jobs.

I have yet to meet a home owner that wishes for the property they own to be worth less. To me solution is to temper price increases - allow for moderate increases of 4 to 5% per year by increasing supply and help the new owners would be owners with larger subsidies. Devaluing property prices to make them affordable for the fraction of new buyers at the expense of the majority owners does not make sense.



Anyway



As for devaluing of home prices, it can be managed as long as market forces and especially incomes support it. Remember that not all homes are fully paid for and since most are excessively valued, there will not be such a negative impact as one would expect if the situation is managed by a reduction in future payments - to reflect the current valueof the flat.

 

[ChaoPappyPoodle]

Re: HDB Flats:Minimum Occupation Period for non-subsidised flats revised upwards to 3

Do not quite understand your angle with regard to devaluation. If I buy prop for $350K and finance $300K devaluation could put me underwater. The banks are also affected because their 10% to 20% safety margin is gone. The current market for resale HDB is supported by higher incomes. The only problem is that the high income people are the new PR with the good jobs.

I have yet to meet a home owner that wishes for the property they own to be worth less. To me solution is to temper price increases - allow for moderate increases of 4 to 5% per year by increasing supply and help the new owners would be owners with larger subsidies. Devaluing property prices to make them affordable for the fraction of new buyers at the expense of the majority owners does not make sense.

QUOTE]

HDB ownership covers three groups of people -
1) have fully paid up for their
2) have yet to fully pay up for HDB flat
3) do not own a HDB flat

You bought a widget from me for $350.
You pay me $50 cash and the balance of $300 you borrowed from a bank.
The bank pays me the $300 that you borrowed from them.

After selling you the widget, I feel bad because it costs me only $150 to produce it.

I return $200 to the bank and keep $150 to reflect my costs.

The bank writes off this $200 from your loan. You now only need to pay the bank $100 instead of $300.

Why don't you like this? Can the garment manage this financially?

Just for the math, 100,000 homes x $100,000 = $10 billion. $10 billions is very much less than what the PAPies lost last year in their gambles. We should be able to afford even more.

For those that have fully paid up, there are numerous ways to calcualte the actual costs of their homes and the current value. This group is actually rather small in comparison. Further, these flats are older and hence, predominantly those that were sold when HDB prices more better reflected their actual costs of building.

The 'problem' with this group is that their home prices have sky-rockected relative to their purchase price. Even so, these people can be 'bought' just like the group that have partially paid up for their flats.

Of course more has to be looked into but as long as we are committed to solving our problems relating to retirement funds and living a healthy life, free from the daily burden of worrying about paying for our homes should we become unemployed at the next economic downturn then there really is a solution out there. Mind you, we are talking about being able to retire with sufficient funds, essentially, living a more comfortable life THROUGHOUT our lifetime.

Money is required to make almost everyone happy with such a solution but we do have the money to carry it out. And I'd rather we use the money to salvage the country than allow a self-professed elite group spend it on inconsequential investments that will in all likelihood be used by them for themselves.

What are your thoughts?

 

[Mdm Tang]

Re: HDB Flats:Minimum Occupation Period for non-subsidised flats revised upwards to 3

http://www.businesstimes.com.sg/




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[Mdm Tang]

Re: HDB Flats:Minimum Occupation Period for non-subsidised flats revised upwards to 3

Mar 6, 2010
HDB rules change
3 years before you can sell resale flats
By Joyce Teo
Related Link
What's changing






http://www.straitstimes.com/BreakingNews/Singapore/Story/STIStory_498714.html



BUYERS of non-subsidised HDB resale flats must now occupy their flats for at least three years before they can sell, under new rules unveiled yesterday.

This is up from 2-1/2 years for buyers with HDB loans and one year for buyers with bank loans or no loan.

The move, effective yesterday, is seen as a government effort to curb speculative buying and selling of public housing.

Home hunters have expressed dismay in recent months that speculators may be pushing up HDB resale flat prices.

Property consultants said the move is set to nip speculation in the bud but is not likely to result in lower flat prices.

The move comes after an HDB study found that a growing number of flat owners were selling flats within three years.

Read the full story in Saturday's edition of The Straits Times.







[email protected]

 

[Brightkid]

Re: HDB Flats:Minimum Occupation Period for non-subsidised flats revised upwards to 3

How does this affects period before can rent out HDB, especially when bought fully via bank loan ? What is current policy ?

 

[Mdm Tang]

Re: HDB Flats:Minimum Occupation Period for non-subsidised flats revised upwards to 3

Business Times - 06 Mar 2010


HDB revises policies to stamp out speculation

By UMA SHANKARI

THE Housing & Development Board (HDB) yesterday unveiled policy changes designed to hurt speculators and make it more expensive for non-Singaporeans to buy government-subsidised flats.

The Board also agreed to make a much campaigned-for change: it will now allow buyers to take a second concessionary loan from HDB even if they downsize to a smaller flat or move to a flat of the same size. Previously, only upgraders qualified for a second concessionary loan.

Announcing these and other measures in Parliament yesterday, National Development Minister Mah Bow Tan noted that public housing is an especially hot issue this year.

'Someone asked me recently if I was feeling the heat and I don't think he was talking about the weather,' Mr Mah quipped, beginning his reply after a slew of questions from Members of Parliament (MPs).

Many MPs were concerned that some buyers were using HDB flats to speculate in the property market and driving up prices in the process. HDB resale prices hit a new high in Q4 2009, with prices climbing 3.9 per cent from the previous quarter. The median cash-over-valuation (COV) for all resale transactions doubled to $24,000 in Q4 from $12,000 in Q3.

Data from HDB shows that the proportion of flat owners who sell their units within three years of purchase rose to 8.9 per cent for the first 10 months of last year. And in 2008, 7.9 per cent of buyers sold their units within three years. In comparison, less than 7 per cent of buyers sold their flats within three years from 2005 to 2007.

To reduce the number of people using HDB flats to speculate in the property market, the time that buyers are required to stay in their flats before reselling them (minimum occupation period or MOP) will be increased to three years for all flats bought in the resale market. Currently, the MOP is 2.5 years for buyers who choose to take up an HDB concessionary loan and just one year for buyers who either take a commercial bank loan or do not take any loan.

'I want to emphasise that HDB flats are provided primarily for owner-occupation and not speculative profit or rental return,' said Mr Mah.

The decision to remove the upgrading condition for the second concessionary loan, in comparison, is to encourage greater financial prudence and flexibility among homeowners. Feedback from MPs said that by providing the second concessionary loan only to upgraders, some might inadvertently be driven to upgrade even though it may not be prudent to do so.

'Since we are now seeing a situation of greater economic volatility, the flexibility to right-size will become more important,' said Mr Mah.

But the new policy comes with strings attached. Currently, cash sales proceeds from the sale of a flat need not be used for the purchase of the next one. But with the change, sellers can only keep the greater of $25,000 or half of the cash proceeds. The remaining cash and CPF balance has to be used to finance the purchase of the next flat if they take up a HDB concessionary loan.

The lifting of the upgrading condition is expected to benefit about 1,000 households a year. Currently, HDB grants about 4,000 second concessionary loans each year, mostly to households upgrading to bigger flats.

Social impacts

HDB also said that 3,800 more elderly lessees will now benefit from its lease buyback scheme which has been revised. The scheme allows the elderly to monetise their flats by selling the tail end of the flat's lease back to HDB.

Other measures are calculated to have social impacts. To encourage permanent residents (PRs) to take up citizenship, HDB will withhold $10,000 of the subsidies for a household made up of one citizen and one PR when they buy a HDB flat. Once the PR converts to citizenship, or when the couple has a Singapore citizen child, the Board will return the withheld subsidy.

'These measures will give greater assurance to citizens that they are our priority, and at the same time, encourage our PRs to view citizenship more favourably,' Mr Mah said.

A quota cap for PR households of 8 per cent in each block and 5 per cent within each neighbourhood was also announced. It will be applied on top of the ethnic integration policy (EIP) but will not apply to Malaysian PRs. The EIP was also tweaked slightly. In line with demographic shifts, the Indian/Others limit was raised from 10 per cent and 13 per cent at the neighbourhood and block levels to 12 per cent and 15 per cent respectively.

Property analysts said that the revision of the MOP to three years and the removal of the upgrading condition will affect the HDB market.

'By standardising the MOP at three years, the 'turnover' rate is slowed down from one year to three years. This has the effect of preventing 'flippers' from pushing up resale prices with their short-term objectives,' said Eugene Lim, associate director for ERA Asia Pacific.

But PropNex chief executive Mohamed Ismail said that there will be little impact from this policy which will, at most, just encourage buyers to adopt a mid-to-long term view when buying their flat. He feels that the most notable measure was the extension of the second HDB concessionary loan to downgraders.

'We may see an increase in market activity due to an increase in downgraders,' Mr Mohamed said. But he declined to predict if there will be an increase in resale flat prices as it is 'too soon' to assess the impact.

Noted Mr Lim: 'With this change in policy, Singapore citizen households are likely to be attracted to take loans from HDB, leaving only PR households to take bank loans. Banks may now have to re-package their loans more attractively as they battle for market share.'

ERA has a 41 per cent share of the resale HDB market and based on its transactions, some 50 per cent of buyers use bank loans, another 40 per cent get loans from HDB and 10 per cent pay for their flats using cash.



Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.

 

[Mdm Tang]

Re: HDB Flats:Minimum Occupation Period for non-subsidised flats revised upwards to 3

http://www.businesstimes.com.sg/sub/news/story/0,4574,375469,00.html?

 

[longbow]

Re: HDB Flats:Minimum Occupation Period for non-subsidised flats revised upwards to 3

Wah very radical. The entire market will collapse. Since it only cost me $150K to buy the flat, anyone that offers me $200K, I would sell, giving me 50% profit. So the price of a 4 rm flat will now be $200K. Given that avg 4rm flats are going for $350K to $500K, these owners will now see a 40 to 60% depreciation in their flat prices.

Remember if a 4rm hdb is now worth $200K then it means that the next step up, cheap condos will also face similar collapse. Is G going to help these owners too?

I think money would be better spent to help new buyers.

Do not quite understand your angle with regard to devaluation. If I buy prop for $350K and finance $300K devaluation could put me underwater. The banks are also affected because their 10% to 20% safety margin is gone. The current market for resale HDB is supported by higher incomes. The only problem is that the high income people are the new PR with the good jobs.

I have yet to meet a home owner that wishes for the property they own to be worth less. To me solution is to temper price increases - allow for moderate increases of 4 to 5% per year by increasing supply and help the new owners would be owners with larger subsidies. Devaluing property prices to make them affordable for the fraction of new buyers at the expense of the majority owners does not make sense.

QUOTE]

HDB ownership covers three groups of people -
1) have fully paid up for their
2) have yet to fully pay up for HDB flat
3) do not own a HDB flat

You bought a widget from me for $350.
You pay me $50 cash and the balance of $300 you borrowed from a bank.
The bank pays me the $300 that you borrowed from them.

After selling you the widget, I feel bad because it costs me only $150 to produce it.

I return $200 to the bank and keep $150 to reflect my costs.

The bank writes off this $200 from your loan. You now only need to pay the bank $100 instead of $300.

Why don't you like this? Can the garment manage this financially?

Just for the math, 100,000 homes x $100,000 = $10 billion. $10 billions is very much less than what the PAPies lost last year in their gambles. We should be able to afford even more.

For those that have fully paid up, there are numerous ways to calcualte the actual costs of their homes and the current value. This group is actually rather small in comparison. Further, these flats are older and hence, predominantly those that were sold when HDB prices more better reflected their actual costs of building.

The 'problem' with this group is that their home prices have sky-rockected relative to their purchase price. Even so, these people can be 'bought' just like the group that have partially paid up for their flats.

Of course more has to be looked into but as long as we are committed to solving our problems relating to retirement funds and living a healthy life, free from the daily burden of worrying about paying for our homes should we become unemployed at the next economic downturn then there really is a solution out there. Mind you, we are talking about being able to retire with sufficient funds, essentially, living a more comfortable life THROUGHOUT our lifetime.

Money is required to make almost everyone happy with such a solution but we do have the money to carry it out. And I'd rather we use the money to salvage the country than allow a self-professed elite group spend it on inconsequential investments that will in all likelihood be used by them for themselves.

What are your thoughts?