Singapore Property

Minister for National Development Desmond Lee revealed in Parliament on Monday that 3% of HDB apartment owners hold at least one private property, and over 50% of them have leased out their homes (Nov 7).

In response to questioning from NCMP Leong Mun Wai (PSP) and MP Gerald Giam (WP-Aljunied), the minister said that there are a small percentage of HDB flat owners who also own private residential properties but do not occupy their HDB flats.

Mr. Giam wanted to know whether there were any plans to boost the supply of resale apartments and regulate their pricing, as well as if there were any plans to revise the policy of allowing HDB owners to hold their flats after they own private property.

The resale price index has increased for ten consecutive quarters. This index tracks price changes in the resale public housing market in Singapore.

Mr Lee said in Parliament on Monday that as of October this year, 3% of HDB homeowners also owned at least one private property, a number which has decreased by roughly 0.3 percentage points over the last three years.

About 45 percent of HDB flat owners, according to Mr. Lee, do not live in their own dwellings because they rent out their whole property.

Another 4% of HDB apartment owners rent out at least one bedroom, and this figure has been rather consistent over the last three years, he said.

About 13% of apartment owners (the remaining 97% don’t own private residences) are renting out all or part of their dwelling, a figure that has been relatively constant over the last three years, he added.

There is no need to sell an HDB apartment in order to purchase a private residence in Singapore, according to the minister. This applies to families who have already met the required occupancy term.

Owners of HDB flats who do not sell or otherwise dispose of their property are liable to a buyer’s stamp duty of at least 17 percent when purchasing a new property.

Mr. Lee said the Government has been collecting opinions from Singaporeans as part of the Forward Singapore initiative and would review the results before deciding whether or not to require HDB flat owners to sell their apartments if they acquire private property.

Mr. Giam noted an increase in resale prices over the last two years and reported that 266 apartments were sold for above S$1 million between January and September of this year in response to a follow-up inquiry.

Even with the government subsidies, “this has placed resale apartments beyond the grasp of many Singaporeans,” said Mr. Giam.

So, I asked this because I think that increasing the supply of resale apartments might help bring down their costs, making them more accessible to Singaporeans of lower and medium incomes.

Mr. Lee said that the million-dollar apartments were “headline-grabbing pricing” that had prompted alarm and “fueled market psychology,” leading to individuals worrying about the housing market and entering the market as a result. As a result, the secondary market has been hit hard, Mr. Lee added.

Mr. Lee observed that over the last two years, just around 1 percent of all resale deals have included apartments priced at $1 million or more.

He also said that in December of last year and September of this year, the government took action to reduce demand in the real estate market.

Future “macroeconomic factors” such as “increasing interest rates,” “uncertainty in the economic environment internationally,” and “people becoming more conservative in their house purchases” would have an effect, and “we need to watch the market closely,” he added.

However, Mr. Lee continued, “with grants as well as the measures we are putting in place, we want to make sure that the property market remains in line with economic fundamentals.