ST : Giving first crack to first timers

Sep 16, 2010

parliament

Giving first crack to first timers

New rules also level playing field for private property and HDB flat owners: Mah

By Esther Teo

NATIONAL Development Minister Mah Bow Tan acknowledged concerns of genuine upgraders and retirees yesterday but emphasised that the new property rules were meant to give first-time buyers 'first crack' at the market.

Mr Mah said that while some might be inconvenienced and disadvantaged, the broader goal of the rules was to reinforce the use of a Housing Board (HDB) flat for long-term owner occupation - not a mode of investment - and to give first-time home buyers priority.

'If you already own a private property then please don't at this point in time go and compete with the others to buy an HDB resale (flat) unless you're genuinely downgrading,' he said.

Mr Mah was responding to questions from Non-Constituency MP Sylvia Lim and Mr Lim Biow Chuan (Marine Parade GRC) on the way the new rules were making it harder to own a public and private home concurrently.

Those who buy an HDB resale flat on or after Aug 30 must also dispose of any private property they own - including any held overseas - within six months of the HDB purchase.

The measures also included tighter lending rules for home owners with mortgages looking to buy another property. They can now borrow up to only 70 per cent of the value, down from 80 per cent.

Ms Lim asked if the 'legitimate plans' of some private property owners who wished to monetise their investment would be jeopardised. Home owners close to retirement who wished to downgrade to an HDB flat and rent out their private property for retirement income would now face problems, she said.

Mr Mah said that while there are those who wanted the best of both worlds, some buyers had more pressing needs.

'We have a genuine need from first-timer couples for HDB resale flats and I think we should let them have first crack at it.'

While a good portion of complaints on the ground had centred on upgraders being disadvantaged, he said the rules encouraged them to be more prudent.

Complaints from upgraders were genuine, however they were premised on the assumption that the property market would keep going up, which was what made him worry, Mr Mah said. He said he did not want to witness a peak and crash of the market similar to that in 1997 which left many losing their homes and facing negative equity.

'(The new rules) will inconvenience some who already own a home who hope to upgrade or who hope to downsize but even then, I think they will agree with me that they will also benefit from a more stable market,' he added.

The rules also made the treatment of private property and HDB flat owners more equitable, redressing the anomaly before they were introduced, he said.

In the past, while HDB flat owners could not buy private property till their minimum occupation period (MOP) was completed, private property owners could enter the HDB resale market at any time while keeping their private property.

'Rather than saying that you are penalising the private property owner, we are actually making it equitable for both HDB owners as well as private property owners and we are also making these rules... fair for all property owners, whether you are PRs (permanent residents) or citizens,' he said.

Mr Mah also revealed that about 3 per cent - or 24,000 - of HDB flats owners held private property as well.

In response to Madam Ho Geok Choo's (West Coast GRC) question on providing adequate housing for the sandwich class - households earning $8,000 to $10,000 a month - Mr Mah said that HDB planned to release land sites for about 7,000 design, build and sell scheme (DBSS) flats and 8,000 executive condominium (EC) units this year and the next.

This will triple the current stock of DBSS flats and double that of ECs in two years, he said. Unsold DBSS flats tendered under the old rules, however, will still not be available for purchase by the sandwich class.

esthert@sph.com.sg


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STABLE MARKET

'(The new rules) will inconvenience some who already own a home who hope to upgrade or who hope to downsize but even then, I think they will agree with me that they will also benefit from a more stable market.'

National Development Minister Mah Bow Tan