Debated in Parliament on 7 Nov 2022.
Mr Gerald Giam Yean Song asked the Minister for National Development (a) how many current HDB flat lessees concurrently own one or more private residential properties; (b) of these, how many are not living in their HDB flats; (c) whether there are any plans to review the policy of allowing HDB flat lessees to keep their HDB flats after they become private property owners; and (d) if not, what other plans does the Ministry have to increase the supply of resale HDB flats and thus moderate their prices.
Sir, Mr Gerald Giam has asked about HDB flat owners who concurrently own private properties and Mr Leong Mun Wai has asked a related question for the Parliamentary Sitting on 9 November.
Singapore Citizen households who have fulfilled the Minimum Occupation Period, or MOP, of their HDB flat may buy private residential property without selling their HDB flat. Flat owners who do not dispose of their HDB flat will be subject to Additional Buyer’s Stamp Duty, or ABSD, of at least 17% on the purchase of their second and subsequent residential property.
As at October 2022, about 3% of HDB flat owners own at least one private residential property. This proportion has fallen by about 0.3 percentage points in the last three years. Of these, about 45% are not living in their HDB flats, as they have rented out their whole flat. Another 4% of HDB flat owners are renting out one or more bedrooms of their HDB flat. These proportions have stayed stable in the last three years.
Among the remaining 97% of the flat owners who do not own private residential property, about 13% are renting out their whole flat or bedrooms within their flat. This proportion has also stayed stable in the last three years.
We note that Mr Gerald Giam is asking the Government to consider requiring HDB flat owners to sell their HDB flats, or dispose their HDB flats, if they buy private property. Mr Yip Hon Weng had also called for this last month. We have been gathering views from Singaporeans as part of Forward Singapore, particularly around the social compact on public housing, and will study these as well as other views and ideas carefully.
Mr Gerald Giam.
I thank the Minister for his reply. Sir, resale flat prices have gone up about 28% in the last two years and this year alone, between January and September, more than 266 flats sold for over $1 million. So, this has put resale flats beyond the reach of many Singaporeans, even after factoring in the generous Government grants.
The purpose of my question was to discuss ways to moderate resale flat prices, so they are more affordable for lower- and middle-income Singaporeans. And one way to achieve this is to increase the supply of resale flats. So, since HDB flats are meant for owner occupation, can HDB owners who buy private property in the future be required to sell their flats so that the flats are freed up to be bought by other Singaporeans?
I note that the Minister has said that this is under discussion and I appreciate that. Because this will be consistent with the current rule which requires private property owners who buy an HDB flat to dispose their private property within six months of the flat purchase.
I have given the Member the proportion of HDB flat owners who concurrently hold private property as well as HDB flats. There are about 3%. And of those who rent out their HDB flats, it is a smaller subset of that. Having said that, I have given the Member a reply that we study all options and possibilities. Members know that we do not discuss cooling measures, other than those that have already been issued.
For resale flat prices, the Member is right. They have been going up in the last two years for the reasons I mentioned in the last Parliamentary Sitting. We have taken measures – both in December last year and September this year – to cool the property market by moderating demand and let the measures work their way through the market.
We are also mindful of macroeconomic conditions going forward: rising interest rates, uncertainty in the economic climate globally, people being more prudent in their home purchases. So, those will also have an impact and we will need to monitor the market carefully.
The Member repeats the point about million-dollar flats. Indeed, these headline-grabbing prices have caused concern and fuelled market psychology, causing people to worry, and then, hence, go into the market. That also adds to the impact we have seen on the resale market.
And million-dollar flats make up, in the last two years, about 1% of all resale transactions. They tend to have very good attributes. I think the Member is aware: they tend to be jumbo flats, loft units, high floors, larger units, executive apartments, maisonettes, the 3-room type HDB flats that are legacy terrace houses.
Nevertheless, 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. We have said before, numerous times, we will act decisively but carefully to ensure that the property market remains in line with economic fundamentals.
PAPERCUTS