The Housing & Development Board (HDB) recently unveiled policy changes designed to hurt speculators and make it more expensive for non-Singaporeans to buy government-subsidised flats. These changes include:
1) It will now be possible to apply for a second concessionary loan, even if you are downgrading. However, the quantum of the second concessionary loan will be reduced by the full CPF proceeds and part of the cash proceeds from the sale of the existing or immediate past HDB flats.
2) Minimum occupation period for resale of non-subsidised flats has been increased to 3 years.
3) Lease buyback scheme extended to those who previously owned 4-room and bigger flats.
4) In case of Singapore PRs who marry citizens, HDB will withhold $10k of the housing subsidy until the SPR takes up citizenship or they have a Singapore citizen child.
5) New non-Malaysia SPR quota of 5% at neighbourhood level and 8% at block level.
6) Ethnic limit for Indian/Others raised to 12% at neighbourhood level and 15% at block level.
We are now starting to see more and more measures being put in place to prevent a runaway increase in HDB and private property prices.
Prices have already gone up a lot mainly because the increase in HDB supply over the past couple of years was insufficient to meet the increase in demand from a fast growing population. Price is always a function of demand and supply – as simple as that.
When all these changes take effect (and our population starts to decrease due to more stringent criteria on foreign workers), HDB prices should stabilize and perhaps even drop. However, I don’t expect a drastic drop as the cost would be too huge for the government to let it happen.