TODAY Online : HDB tasked to prevent loopholes

HDB tasked to prevent loopholes

05:55 AM Jan 29, 2010

by Joanne Chan and Hoe Yeen Nie

SINGAPORE - HDB flats are for owner-occupation and not speculation or rental investment, National Development Minister Mah Bow Tan said yesterday.

He has tasked the Housing and Development Board to review their regulations to ensure that no loopholes are being exploited.

Fresh concerns over the affordability of public housing were sparked when HDB's latest housing data revealed that resale flat prices continued to climb in the fourth quarter of last year.

In addition, the median cash premium that home owners have to pay upfront doubled to $24,000, prompting calls for the government to step in.

But Mr Mah, speaking on the sidelines of an HDB event, noted that the resale market should be allowed to operate as a free market, with prices set on a "willing buyer, willing seller" basis.

"Now, if you are a buyer, you feel anxious because you want prices to be low. But if you are a seller, you want prices to be high. So it's not possible for the Government to set the resale prices."

While promoting a free market, Mr Mah drew the line at speculation and stressed that public housing is for owner-occupation.

As such, Mr Mah said the HDB is relooking rules to ensure that prices are not being artificially inflated.

"If somebody is coming in the hopes of making money, through flipping or selling the flats later on, or to buy to rent without staying in there, I think that's not possible, that's not the idea of HDB flats."

He declined to say which rules are being studied.

Aside from reviewing regulations, Mr Mah said he had also asked the HDB to step up enforcement against those who break the rules.

"I don't know if it's extensive but anecdotally you do hear one or two cases. So we want to make sure that this is not happening," he added.

Recent reports suggested that some flat owners at the newly completed Pinnacle@Duxton, had rented out their entire units without a minimum occupation period.

This is considered illegal under HDB's housing rules.

Observers said many of the transactions are done under the table - making enforcement difficult even if the rules are tightened.

Mr Chris Koh of Dennis Wee Realty noted that new rules requiring home owners to report the details of their tenants are an incentive for them to be honest. But he believes that there is scope to increase the penalties further, and to penalise agents who facilitate illegal transactions.

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