It’s not fair, says private home owner

September 14, 2010

MR TAN H C is upset over recent measures to tame the property market.

The businessman, 59, feels that they unfairly penalise private home owners like him while HDB flat owners are spared.

The reason: The new rules mean Mr Tan now has to sell his condo within six months if he buys an HDB flat.

So he cannot own a private home and an HDB flat at the same time.

But an HDB flat owner has no such problems.

He can buy a private property and own it concurrently, provided he has fulfilled the five-year Minimum Occupation Period (MOP) for his HDB flat.

The MOP is the time that buyers are required to stay in their flats before they can sell them.

In last week’s announcement, the MOP was increased from three to five years for non-subsidised flats.

Mr Tan lives with his family in a freehold condo at Lorong Ah Soo.

He had wanted to buy a four-room HDB flat to live in and rent out his condo instead. But before he could do so, the new measures kicked in.

He told The New Paper: “I shouldn’t have waited so long (to buy). If private home owners like us are not allowed to buy an HDB flat to generate income, why is it that an HDB flat owner can (buy private property)?

“I just want to move to a smaller place that’s easier to upkeep, since all my children are living with their own families.”

Now, he will just stay put at his existing home.

Chesterton Suntec International research and consultancy director Colin Tan said the Government has to introduce the measure to relieve the shortage of resale flats.

Help for first-time buyers

He said: “All the measures were never meant to penalise these people (private property owners) – they were meant to help first-time buyers.

“But these private property owners are disadvantaged because they cannot invest like HDB flat owners.

“From an investor point of view, it’s not fair. But the measures were meant to ease that shortage (of resale flats).”

The shortage of resale flats in the past was partly due to the higher demand for such flats from new Singapore permanent residents and locals, he noted.

And with private property prices at an all-time high, some HDB flat owners found it tough to upgrade to private homes. Instead, they chose not to upgrade, which led to a shortage of resale flats on the market.

Ngee Ann Polytechnic real estate lecturer Nicholas Mak added that if the Government tweaks the policy such that HDB owners have to sell their flats if they buy private property, it would have an adverse effect on the HDB resale market.

He said: “The developers would be even more upset because you’d be telling people who own HDB flats that they cannot own both.

“Some of these people may not want to buy a private home if they have to sell their existing flat.”

He pointed out that the new measure will reduce the competition from private property investors who buy HDB flats and sublet them out later.

“People have very short memories. There was a time when those who owned private property could not own HDB flats at all,” he added.

“They had to sell their private property and could buy an HDB flat only after two years. But it was so laborious that it didn’t seem practical.”

When contacted, HDB said that buyers of subsidised flats are not allowed to own both the HDB flat and private property within the MOP.

In the past, non-subsidised flat buyers were allowed to do so.

HDB added that it has disallowed concurrent ownership of HDB flats and private property within the MOP from Aug 30.

This ensures that all flat buyers are subject to the same treatment within the MOP and reinforces the long-term owner-occupation objective of flats, a spokesman explained.

Both groups of flat buyers are allowed to buy private property after the five-year MOP.

Source : New Paper – 14 Sep 2010