Today's HDB - Sublettable or Sub-Primes?
More turn to sub-letting HDB flats
By Esther Ng, TODAY | Posted: 09 November 2009 0642 hrs
SINGAPORE: Some were in financial hardship, and an increasing number were Singaporeans working overseas or who simply saw their flats as investments.
They made up the growing number of households that are sub-letting their entire flats – a figure that jumped 21 per cent in the course of the last financial year.
Between April last year and March this year, the Housing and Development Board (HDB) approved 22,754 such applications, or 4,019 units more than in the previous year.
Despite the recent recession, this trend is not necessarily due to flat-owners having problems meeting their mortgage repayments, said property analysts.
"The downturn happened in the middle of HDB's financial year, toward the end of last year. And while some households may have been affected, it's not enough to say they contributed to the increase – it's a variety of factors," said Ngee Ann Polytechnic real estate lecturer Nicholas Mak.
One of which is more Singaporeans heading overseas for work. Property agent Liz Choo told MediaCorp that the number of such flat-owners approaching her to sub-let their flats has gone up by as much as 20 per cent from six years ago.
They are mostly headed to China and Vietnam, "followed by Australia and the United Kingdom", she added.
Depending on the location, rents for a three-room flat range from $1,500 to $1,800, while four-room, five-room and executive maisonettes can command $1,800 to $2,500 a month. A five-room flat in the central area could fetch $3,000, said property agents.
The relaxation of public housing policy in March 2007 sparked the first increase in the number of Singaporeans sub-letting their housing board flats.
Home owners can now rent out their entire flats after living in it for three years, if the flat was bought without a housing grant from the resale market; or five years if the flat was bought from the HDB or the open market with a CPF Housing Grant.
Previously, they had to wait 10 years if they had an outstanding HDB loan or five years if they did not.
"It used to be a lot tougher in the past, you could only let out your flat if you were studying or working overseas and you must have documentary proof, or if you're very sick and need to live with your relative - there were so many conditions attached," said property agent of 15 years, Mr G Rajan.
HDB relaxed its policy to allow flat owners greater flexibility to monetise their flats during retirement or times of financial difficulty, and also to enlarge the rental market for HDB flats.
And some, it seems, have taken advantage of the situation. "I've a client who, after living in his flat for seven years, moved into his newly completed condo and is now renting out his flat," said Mr Daniel Lim, a property agent. Other agents also told MediaCorp the HDB flat is increasingly seen as an investment.
Still, there are some who sub-let because they cannot afford the repayments.
Finance graduate Ms Sumathi (not her real name) told MediaCorp she has been unemployed for three years since returning from her studies in Australia. Her three-room flat in Serangoon, which she bought with her father, is being rented out for $1,500.
"Though we took an HDB loan, I couldn't afford to pay $404 monthly," she said. The 35-year-old is staying with a friend. Her father, who works overseas, does not earn enough to pay the mortgage. "The income from the rental helps, but I have to pay property tax and conservancy charges, too," she added.
- TODAY/so
More turn to sub-letting HDB flats
By Esther Ng, TODAY | Posted: 09 November 2009 0642 hrs
SINGAPORE: Some were in financial hardship, and an increasing number were Singaporeans working overseas or who simply saw their flats as investments.
They made up the growing number of households that are sub-letting their entire flats – a figure that jumped 21 per cent in the course of the last financial year.
Between April last year and March this year, the Housing and Development Board (HDB) approved 22,754 such applications, or 4,019 units more than in the previous year.
Despite the recent recession, this trend is not necessarily due to flat-owners having problems meeting their mortgage repayments, said property analysts.
"The downturn happened in the middle of HDB's financial year, toward the end of last year. And while some households may have been affected, it's not enough to say they contributed to the increase – it's a variety of factors," said Ngee Ann Polytechnic real estate lecturer Nicholas Mak.
One of which is more Singaporeans heading overseas for work. Property agent Liz Choo told MediaCorp that the number of such flat-owners approaching her to sub-let their flats has gone up by as much as 20 per cent from six years ago.
They are mostly headed to China and Vietnam, "followed by Australia and the United Kingdom", she added.
Depending on the location, rents for a three-room flat range from $1,500 to $1,800, while four-room, five-room and executive maisonettes can command $1,800 to $2,500 a month. A five-room flat in the central area could fetch $3,000, said property agents.
The relaxation of public housing policy in March 2007 sparked the first increase in the number of Singaporeans sub-letting their housing board flats.
Home owners can now rent out their entire flats after living in it for three years, if the flat was bought without a housing grant from the resale market; or five years if the flat was bought from the HDB or the open market with a CPF Housing Grant.
Previously, they had to wait 10 years if they had an outstanding HDB loan or five years if they did not.
"It used to be a lot tougher in the past, you could only let out your flat if you were studying or working overseas and you must have documentary proof, or if you're very sick and need to live with your relative - there were so many conditions attached," said property agent of 15 years, Mr G Rajan.
HDB relaxed its policy to allow flat owners greater flexibility to monetise their flats during retirement or times of financial difficulty, and also to enlarge the rental market for HDB flats.
And some, it seems, have taken advantage of the situation. "I've a client who, after living in his flat for seven years, moved into his newly completed condo and is now renting out his flat," said Mr Daniel Lim, a property agent. Other agents also told MediaCorp the HDB flat is increasingly seen as an investment.
Still, there are some who sub-let because they cannot afford the repayments.
Finance graduate Ms Sumathi (not her real name) told MediaCorp she has been unemployed for three years since returning from her studies in Australia. Her three-room flat in Serangoon, which she bought with her father, is being rented out for $1,500.
"Though we took an HDB loan, I couldn't afford to pay $404 monthly," she said. The 35-year-old is staying with a friend. Her father, who works overseas, does not earn enough to pay the mortgage. "The income from the rental helps, but I have to pay property tax and conservancy charges, too," she added.
- TODAY/so
