In an article published in the Sunday Times yesterday, it was mentioned that the HDB ruling which states that HDB flat owners are not allowed to concurrently own an HDB flat and private property (local or overseas) within the minimum occupation period (MOP) will also apply to residential land (even if its vacant) held in other countries.
This might have implications for investors in land banking projects.
A HDB owner who has not yet to meet his MOP will therefore need to be careful when investing in landbanking projects as he or she might have to dispose of land initially not zoned residential if it later acquires residential zoning (if ever).
I find this HDB ruling to be messy and not thought out carefully in its implementation. Over the past few weeks, we have seen clarification that it applied to overseas properties. Now, another clarification that it applies to residential land. These clarifications are not through a proper press release from HDB but only came about in news articles when HDB were asked the appropriate questions by SPH journalists.
Are there more restrictions that we do not know of?
I am going to fall off my chair if HDB were to one day say that REITs would also be included. They can justify that after all, it’s a collective ownership in property.
On another note, I feel that the restriction on land banking can turn out to be a good thing if it ends up having the effect of deterring people from investing in land banking. There are a few dubious land banking projects around and the man in the street might be better off staying clear of them.
Since MAS is not going to regulate land banking as they always insist that land falls under a form of real estate ownership, it is just as well that we have HDB provide some form of regulation (restriction) instead.
The full article can be found here: