ST Forum : Make it easier for genuine upgraders

Sep 9, 2010

Make it easier for genuine upgraders

A SEGMENT of HDB dwellers has been particularly hard-hit by the latest measures to cool the property market - those who are in the midst of selling their HDB flat and buying another.

The new rules stipulate that those with an existing mortgage are not eligible for the usual loan of 80 per cent of the valuation price, but can get only 70 per cent instead. The cash component to be paid upfront has also been raised to 10 per cent, instead of 5 per cent.

This figure has an impact on ordinary, hardworking Singaporeans. An extra 10 per cent can translate to an additional $30,000 to $60,000 from the Central Provident Fund accounts. And an additional 5 per cent cash down payment means an extra $15,000 to $30,000, based on average valuation prices for HDB flats that range from about $300,000 to $600,000.

Many Singaporeans save for years to upgrade to a bigger unit or a choice location. Many prefer to buy first before selling their flats, for logistical reasons. Earlier, they would have got a bridging loan from a financial institution. But with the new rules, they will no longer be able to do so as they have an existing housing loan.

To sell their apartment first, and move into a rented flat before buying the next flat is a daunting thought for many.

The current HDB rules state very clearly that buyers of HDB flats have to dispose of their current flats within a six-month period. With this rule already in place, I hope that the HDB will tweak the other rules to enable genuine buyers to upgrade or downgrade their homes without restrictions.

Albert Wong