Our "2 cents" on newspaper articles we came across today...

By The Folks @PropTalk - November 19, 2014 No Comments

After being starved of our national newspapers for the past few days, the wife and I came across a couple of articles this morning that we like to give our

1. HDB as master land developer and price regulator?

This was apparently suggested by Mr. Ho Kwon Ping (aka Executive Chairman of Bayan Tree Holdings and the better half of ex-NMP Claire Chang). And Mr. Alan Ng had written to the Straits Times Forum explaining why this is not the way forward.

The wife and I did not manage to read the full context of Mr. Ho's speech. So basing it purely on face value, we wonder why Mr. Ho felt that HDB can actually do a better job than what the market is able to do now. This is especially given the less than stellar track record of HDB in "timing the market" when comes to building of public flats.

While we firmly believed that pricing for public flats should be regulated simply because of the fact that it is built with taxpayers' money and subsidized (we know some may disagree on this point), we also maintained that private home market should largely be left to free market forces albeit certain "guided policies" set by the Government - we already have much of these (at current juncture, probably a tad too much) in place what's with the ABSD, SSD and more effectively, the TDSR.

Any attempt for a government stat board to regulate prices in the private home market is likely to lead to more inefficiencies and ...in our humble opinion as always... a futile exercise.

2. Let retirees buy resale HDB flats/EC but keep private property for rental income

Mr. Richard Sim wrote to Voices (i.e. the Forum page in TODAY) to ask that retirees be allowed to keep their private property for rental income when they decide to downgrade to live in a HDB flat. He mentioned that there are already families who own HDB flats and allowed to purchase private properties because they have fulfilled the 5 years Minimum Occupation Period (MOP). They can then rent out their HDB flats after they have moved into their private properties. However, retirees who want to buy a HDB flat (resale) or a small EC to live in during their retirement years are not allowed to do so unless they sell off their private property first. So Mr. Sim questioned the apparent differential treatment between the 2 groups.

The wife and I must admit that we are not as well-informed on the existing HDB ruling when comes to families who rent out their HDB flats after 5 years as they buy and move to private properties. However, we are aware of people around us who have done so. Again going by the notion that HDB flats are taxpayer-subsidised housing, we cannot understand why HDB will allow families to hold on to and rent out their flats after they have moved into private properties. Some will say that the MOP is already a penalty in itself, but we view this as a "condition" of eligibility for owning and continue to reside in a public (subsidised) housing. So when a family decides to upgrade and move into a private property, they lose their eligibility to own their HDB flat (by virtue of the fact that they are not staying in it anymore). Thus they should either be made to sell their flat in the open market or failing which after a mandated period of time (e.g. 6 months after they moved into their private property), be made to sell this back to HDB at a predetermined price.

Similarly for the case of those who have reached retirement age (is this still 65?) and wish to "downgrade", they should be allowed to buy a resale HDB flat or EC and be given a mandated period (e.g. 6 months after taking ownership) to move into the public housing. They can then rent out their private properties or sell them in the open market.

The wife and I reckon that this will be a more equitable approach to the whole issue at hand (and less of a double standard).

3. It now takes 6 months to sell a condo, 3 to offload a flat!

The Straits Times today have reported that private condominium sellers are taking nearly 6 months to secure a sale, the longest wait in over two years. This is a far cry from less than 3 months a year back.

Sellers of HDB flats are also taking longer to find buyers - with a three-month wait on average. This is up from about 60 days last year.

Property consultants say that these long waits reflect weakened demand and upcoming increases in total residential stock will put further pressure on sellers.

The wife and I can only say "we told you so"! We have mentioned in several of our previous blog-posts (and have gotten some flak for it) that the current falling market may not be the "blessing" that many prospective buyers have deemed it to be. It is well and good if one is sitting on a shit-load of money and waiting to enter the market. But for "upgraders" who needs to sell their existing homes in order to garner enough financial muscles to upgrade, they may not necessarily find it any easier to do so in the current market. 

And looks like things can get a lot worse as we move into 2015...

We must reiterate that the above are merely our humble opinions as always and we are certainly prepared to "agree to disagree".

So what do you think?

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