MITIGATING THE “LOTTERY” EFFECT
With more subsidies, Plus and Prime BTO flats will come with tighter resale restrictions.
Owners will only be able to sell those flats 10 years down the road to families with at least one Singapore citizen or singles who are Singaporeans, subject to meeting the household income ceiling criteria. For families, the income ceiling has been set at S$14,000 per month for both housing types. For singles, it is S$14,000 and S$7,000 for Plus and Prime flats, respectively.
They are not allowed to rent out whole flats after the MOP, but sub-letting of spare rooms is permitted.
These restrictions are meant to curb the speculative behaviours of buyers who do not intend to live in these choice flats but merely use them to reap a windfall in the resale market. Frequent flipping activities by a few opportunistic buyers who treat the subsidised public housing as “lotteries”, if not curbed, could destabilise housing prices, driving irrational exuberance.
The HDB’s homeownership programme has effectively enabled nine in 10 Singaporeans to own a public housing flat, which is an achievement enviable to many countries that still struggle to find solutions to meet the housing needs of a small segment of lower-income families in their societies.
The new HDB classification framework as a social enabler could make Singapore’s society more inclusive and equitable by making different housing options accessible to the masses and also improving the quality of life of these families.
Sing Tien Foo is the Provost’s Chair Professor at the Department of Real Estate, NUS Business School, National University of Singapore. The views are those of the author and do not represent those of NUS and its affiliates.
