ST Forum : Don't deny investors a choice

Sep 1, 2010

Don't deny investors a choice

THE slew of measures announced to curb uncontrolled escalation of property prices are generally well thought-through and welcomed. However, the new requirement for existing private property owners to dispose of their private property within six months of purchasing an HDB flat in the resale market seems unreasonable.

While the Government should play a role in ensuring price stability in the property market, it should not introduce measures that deny individual investors and occupiers a fundamental choice.

A blanket "ban" on private property owners retaining their private property after buying a resale flat from the open market, without enjoying any form of government subsidy, seems unjustified. This is especially so if the private property is used as a long-term investment, in sharp contrast to speculative flipping of properties.

Most of the market-cooling measures, such as limiting the use of financial leverage in property purchases, still allow a degree of personal discretion in the context of a free-market economy. It is harsh to require existing private property owners to sell off their biggest asset investment upon purchasing a resale flat.

It should be highlighted that not all private property owners are really rich. Many were "forced" to buy their private property in their younger days because their household income exceeded the income ceiling set for HDB purchases, and when no other options like executive condos and Design, Build and Sell Scheme flats were available.

Over the years, this "sandwiched" class of private property owners worked hard to pay for their homes with the intention to move to an HDB flat during retirement. The private property could then be rented out to provide a stream of retirement income. The new requirement has effectively killed the hopes of many such people.

Chloe Loke (Mrs)