SINGAPORE — Prospective home buyers hoping to cash in on future public housing flats in prized downtown locations may be disappointed, as the Government mulls over ways to tighten resale conditions for such units.
Possible measures could include a longer minimum occupation period (MOP), a shorter lease and higher resale levy, said National Development Minister and second Finance Minister Lawrence Wong in an exclusive interview with The Straits Times and Lianhe Zaobao.
The review comes as the Government looks at introducing HDB flats in choice locations such as the Greater Southern Waterfront, to be developed in the Pasir Panjang area after port activities move to Tuas South by 2027.
“I think to do more (public) housing in the city under the same regime would not be plausible and we shouldn’t do it…
“I have to sell it potentially with different parameters,” Mr Wong said last week, citing the experience at the Pinnacle@Duxton in Cantonment Road.
Flats there are regarded as a goldmine, as many owners have reaped windfalls – some close to $500,000 – when they sold units after having met the five-year MOP in December 2014.
The Housing Board launched the project in 2004 at prices from $289,200 to $439,400.
In 2008, 111 five-room flats were re-launched at prices from $545,000 to $645,800.
HDB resale data show 174 transactions at the Pinnacle@Duxton so far, of which 18 were sold for $1 million or more, property consultancy OrangeTee said.
The highest price fetched was for a five-room unit somewhere on the 43rd to 45th floors. It sold last month for $1.12 million or $982 psf.
The high market value of such units has sparked questions about equity as they are heavily subsidised and securing a unit is largely down to chance from having to ballot for them.
“There will be a bit of a lottery effect because whoever gets it will be very lucky and there will be… more than a bit of a windfall effect for that person too, because they will have a huge appreciation potentially,” added Mr Wong.
To address this in a “fair and equitable” way, the Government will look at potentially selling future public housing within the city under a different model, be it implementing a longer MOP from the current five years, or a shortened lease from the 99 years now.
Another consideration is raising the resale levy payable when the owner sells the subsidised city flat and subsequently buys another subsidised unit from the HDB.
The resale levy depends on the size of the flat and ranges from $15,000 for a two-room unit to $50,000 for an executive flat.
One property seller who wanted to be known as Mr Ng, sold his Pinnacle@Duxton unit for about $900,000 last year, and thinks there should not be too many restrictions.
“If you have too many rules based on the assumption that the price will appreciate, then it may put more risks on the buyers,” he said.