Category Archives: HDB

HDB extends Second Concessionary Loan to more flat buyers

Posted on 5 Mar 2010 | Comments Off on HDB extends Second Concessionary Loan to more flat buyers

HDB resale flat owners must occupy their flats for at least three years before they can sell them. The move is to further curb speculation in the HDB resale market.

But the board’s also extending help to genuine buyers by revising its second concessionary loan policy.

An HDB flat is meant for residents to live in not for short-term profit. It’s a message that housing authorities have repeatedly stressed in recent months.

And now, the government is acting further to keep speculators out.

From Friday, if you buy a non-subsidised resale flat without taking a CPF grant, you can only sell it after three years.

With this change, HDB said demand in the resale market will more accurately reflect the interest of genuine buyers.

Also with effect from Friday, if you buy a non-subsidised resale flat, without taking a CPF grant, you can only sell it after three years.

Previously, such buyers on an HDB loan have a minimum occupation period of two and a half years.

For those on bank loans, it’s one year.

All households can now apply for a second mortgage loan from the housing board for their next flat.

This excludes those who have disposed of their private properties.
But under new rules, they can only keep S$25,000 or half of cash proceeds, whichever is higher.

So for instance, a couple sells their existing flat first, and gets S$80,000 in cash and S$60,000 in CPF refund.

To pay for their next HDB flat, they will use half of their cash, or S$40,000, and the entire CPF refund.

In turn, HDB will grant them a loan that is S$100,000 less and the couple keeps S$40,000 in cash.

If the couple buys another flat before selling their existing one, the HDB will give them a loan based on commercial rates.

They will also have to draw down on their CPF balance.

Once they sell their old flat, say after six months, they have to redeem this loan using part of their cash proceeds and the CPF refund.

Interest on the HDB loan will then revert to concessionary rates.

Previously, only those moving to bigger flats were eligible for the loan.

But authorities said this may have driven some to upgrade even though they cannot afford it.

National Development Minister Mah Bow Tan said: “The changes to the second concessionary loan will help Singaporeans right-size to a home that they can sustain over the long term. It will help homebuyers manage their finances for their flat purchase upstream, and avoid financial difficulties downstream.”

The minister also urged buyers to choose within their means.

Source : Channel News Asia – 5 Mar 10

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Call for review of housing policies

Posted on 3 Mar 2010 | Comments Off on Call for review of housing policies

ALTHOUGH it was not directly addressed in Budget 2010, worries about the cost of housing in Singapore were reflected in several MPs’ speeches yesterday.

There were calls to review housing policies, including current rules that allow private property owners to buy HDB flats and to sublet them.

It was also suggested that the $8,000 household income ceiling be raised to allow more Singaporeans to buy new subsidised flats (that are not executive condominiums) from the Housing Board.

The growing number of new immigrants in recent years has caused not just a squeeze on jobs, but also on transport and housing, said MPs.

Mr Inderjit Singh (Ang Mo Kio GRC) said: ‘By bringing in too many people too quickly…the cost of living has gone up rapidly. The clearest manifestation of this is the cost of HDB flats.’

He said though permanent residents (PRs) cannot buy new flats, they still indirectly inflate prices. This is because demand by PRs in the resale market can push up prices, and the price of new HDB flats is pegged to the resale market.

There are also many PRs who rent HDB flats and this contributes to the upward pressure on flat prices, he added.

HDB resale prices have risen about 40 per cent in the past three years, far outstripping Singapore’s economic growth.

The Ministry of National Development has maintained that PRs, who make up only one in five resale flat buyers, have minimal impact on resale prices.

Yesterday’s debate also saw Dr Ahmad Magad (Pasir Ris-Punggol GRC) raise concerns on the effectiveness of recent measures to curb property speculation.

Three days before the Budget statement on Feb 22, the Government announced new rules: A property buyer has to pay extra stamp duty if he sells the property within a year; and the amount buyers can borrow from lending institutions was reduced from 90 per cent to 80 per cent of the property’s value.

Despite these measures, people are still thronging showrooms and snapping up properties, said Dr Ahmad.

He was particularly concerned about the policy that allows private property owners to own HDB flats as well. While the policy says they must live in the flats, anecdotal evidence shows many do not, and are renting them out. ‘If no stern action is taken, it will encourage more dual property owners to do the same,’ he said.

Mr Sin Boon Ann (Tampines GRC) wants the Government to review the income ceiling for a group of young Singaporeans – graduates who have worked a few years before deciding to settle down – struggling to buy a new HDB flat.

He argued that not all couples whose incomes exceed the current limit can afford private housing, or have enough cash to meet the down payment for a pricier resale HDB flat from the secondary market.

National Development Minister Mah Bow Tan said recently the Government was looking into measures for the HDB market and that announcements would be made in Parliament some time this week or the next.

Source : Straits Times – 3 Mar 2010

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