Source: TODAY Online

The couple’s four-room flat was repossessed after they were found to have sublet it out illegally – but that’s not the only thing the Housing and Development Board (HDB) discovered.

The couple, identified as Mr Poh Boon Kay and his wife Madam Khoo Kim Cheng, also owned five private properties. Mr Poh, a registered real estate agent, had bought the flat from the open market on June 1, 2007, for $150,000 without any loan.

This case was highlighted as the HDB gave an update on Friday on its enforcement action against illegal subletting: 56 such flat owners faced penalties that ranged from fines of $1,000 to $21,000, and in the Pohs’ case, repossession of their flat.

It is understood that HDB will return Mr Poh his $150,000 less penalties, which were not disclosed. Property agents told MediaCorp the flat could have fetched about $320,000, at today’s market prices.

Mr Poh is the first to have his flat compulsorily acquired since the HDB tightened rules against unauthorised subletting in February, which require flat owners who sub-let rooms in their HDB flats to register with the board within seven days of doing so. They are also required to notify the HDB when they renew or terminate the sub-letting of rooms. Prior to Feb 1, there was no need to seek prior approval for subletting of rooms.

Mdm Khoo was listed as the flat’s occupier when,in fact, it was illegally rented out to three Burmese couples for $1,900 a month.

When the HDB learned of this in November, it told Mr Poh to evict his tenants immediately, otherwise his flat would be seized. But the Pohs allowed their tenants to remain.

A Notice of Board’s Intention was served on Dec 23 to compulsorily acquire the flat.

The next day, the Pohs appealed to the HDB against the acquisition.

When the HDB interviewed the Pohs on Jan 5, they claimed that they did not know that they needed HDB’s approval for subletting.

The HDB found out that Mr Poh is linked to two other cases of unauthorised subletting: One, as an agent for his wife’s aunt, whose flat in Bukit Batok had been sublet to Burmese monks for use as a meditation centre at a monthly rent of $1,400 since July 2009. Mrs Poh’s aunt was not living in the flat.

In the second case, Mr Poh’s daughter had sublet her Telok Blangah flat without approval, for $900 a month. She too did not live there.

According to the HDB, the cases belied Mr Poh’s claims of being unaware of its rules. He also showed a “persistent disregard” of its rules. As such, the HDB said it would be taking legal action to compulsorily acquire both flats.

Source: HDB InfoWEB

The Minister for National Development, Mr Mah Bow Tan, announced in Parliament today that HDB will be raising the Minimum Occupation Period (MOP) for the resale of non-subsidised HDB flats from 1 and 2.5 years to 3 years. The objective is to reinforce owner-occupation.

2. HDB flats are primarily meant to provide owners with a roof over their heads. They are not meant for speculation or short-term profit. Hence, lessees are required to stay in their flat for a minimum period before they may sell their flat in the open market. Currently, lessees of subsidized HDB flats, i.e. HDB flats bought directly from HDB, DBSS flats bought from private developers or resale flats bought with CPF housing grant, are subject to an MOP of 5 years. On the other hand, lessees of non-subsidised HDB flats i.e. resale flats bought without CPF Housing Grant, are subject to the following MOP:

a) Those who take an HDB concessionary loan – 2.5 years

b) Those who take a bank loan or do not take a loan – 1 year

3. To reinforce the principle of owner-occupation, the MOP for resale of non-subsidised flats will be increased to 3 years, regardless of whether the buyer takes an HDB loan, a bank loan or no loan at all. With the extension of MOP, the demand in the resale market will also more accurately reflect the interest from buyers who are buying flats for occupation.

4. The revised MOP policy will apply to resale transactions where applications are received by HDB from 5 Mar 2010 onwards. Existing lessees of non-subsidised flats will not be affected, i.e. the original MOP of 2.5 or 1 year continues to apply to them. There are also no changes to the MOP for subletting of whole flats.

Source: Channel NewsAsia

The Housing and Development Board (HDB) is reviewing its rules to curb speculation and illegal subletting in the public housing market. National Development Minister Mah Bow Tan said the move is to ensure prices are not being artificially inflated. The review comes amid fresh concerns over the affordability of public housing sparked off by HDB’s latest data that showed resale flat prices continued to climb in the fourth quarter of last year. In addition, the median cash premium that home owners have to pay upfront doubled to S$24,000, prompting calls for the government to step in.

But Mr Mah noted that the resale market should be allowed to operate as a free market, with prices set on a “willing buyer, willing seller” basis. He said: “Now, if you are a buyer, you feel anxious because you want prices to be low. But if you are a seller, you want prices to be high. So it’s not possible for the government to set the resale prices.

“If you were to interfere in the COV (Cash—Over—Valuation), or the resale flat market, essentially, you are saying the government should set the resale flat prices which I think both parties will be unhappy. Why? Because the buyer may be happy today, but today if he’s a buyer, tomorrow he would be a seller. Then when we set the prices and he wants to sell, he will be unhappy.”

While promoting a free market, Mr Mah drew the line at speculation and stressed that HDB flats are for “owner—occupation, not speculation or rental investment.” As such, Mr Mah said the housing board is relooking rules to ensure that prices are not being artificially inflated.

“If somebody is coming in and buying because they hope to make money, through flipping or selling the flats later on, or to buy to rent without staying in there, I think that’s not possible. That’s not the idea of HDB flats,” he said. Mr Mah declined to say which rules are being studied. But he noted that the review will be completed in a few months’ time. How much impact will the review have? Housing analysts said speculators are not the main problem, because prices are not rising fast enough to lure them in.

ERA’s Asia—Pacific associate director Eugene Lim noted that for speculators to be lured into the market, prices have to be moving up very fast. But that’s not happening in the public housing market. For example, prices of HDB flats only increased by 8.2 percent in the past year.

He added that the mandatory holding period before you can sell your flat — one year if you’ve taken a bank loan; 2.5 years for those who borrowed from HDB — also acts as a deterrent against flipping.

Mr Lim said: “It’s basically a case of demand more than supply, because there are probably more people with immediate housing needs now, who cannot wait for the three years for new flats to be built. There is also an increasing population of PRs. They’re not allowed to buy from HDB direct, so they have to go to the resale market.”

But Mr Lim noted that while business from PRs now accounts for 25 percent of his firm’s business, up from 20 percent previously, that is still considered small. He added the review of rules is a sign that HDB is “leaving no stone unturned”.

But demand is being pushed up partly by those who buy flats to earn rent.

Mr Lim said: “If an investment gives you 7 to 8 percent (returns), it is certainly very attractive to look at. Because it’s quite easy to rent out HDB flat. It doesn’t cost much — with $300,000 or $400,000 you can get a HDB flat, you can get good returns, it does attract a fair number of people to look at this option.”

Latest HDB figures showed that between January 2008 and December last year, 56 homeowners were caught renting out their flats illegally.

And recent reports suggested that some flat owners at the newly completed Pinnacle@Duxton had rented out their entire units without a minimum occupation period. This is illegal under HDB’s housing rules.

Home buyers who received a grant from HDB must stay in their flat for a minimum of five years before they can sublet their entire unit. For those who do not use a grant, there’s a minimum occupation period of three years.

Offenders face a fine of between S$1,000 and S$21,000 and may even have their flats repossessed.

Mr Mah said: “I’ve asked HDB to also step up on any possible breaking of the rules. I don’t know if it’s extensive but anecdotally you do hear one or two cases. So we want to make sure that this is not happening.”

But observers said many of these transactions are done under the table. So even if rules are tightened, enforcement will be difficult.

However industry players like Chris Koh of Dennis Wee Realty noted that new rules requiring homeowners to report the details of their tenants are an incentive for them to be honest.

But he felt that there is scope to increase the penalties further, and to penalise agents who facilitate illegal transactions.

And to help curb demand, analysts suggested tweaking rules on how flats are financed.

Currently, a buyer can take out a loan to pay for up to 90 percent of the purchase price of a new or resale flat.

Analysts suggested HDB lower that quantum and make buyers fork out a larger down—payment. This could force them to reassess just how much they can afford, thereby serving as a check on escalating prices.

Source: Channel NewsAsia

Is there a role for Singapore’s Housing and Development Board (HDB), now that the entire population has been housed?

Prime Minister Lee Hsien Loong said the answer is “Yes” as the HDB is still responsible for providing good public housing and fostering social integration.

Speaking at its 50th anniversary, Mr Lee also revealed that the board will celebrate half a century of achievements by building its one millionth flat this year.

The HDB is a central part of the Singapore Story, said Prime Minister Lee. Over half a century, it housed a growing population and was integral in nation—building.

Mr Lee said: “Two generations of Singaporeans have grown up in HDB flats. Public housing helped to mould our unique national identity and collective experience as Singaporeans. It created and shaped our communities and provided the foundation for our social stability and economic growth.”

But Mr Lee noted that the environment has changed and the aspirations of Singaporeans have risen sharply.

He added: “Finding a roof over our heads is no longer the pressing requirement. The HDB flat is not just a shelter but also a key investment asset. People have many considerations in choosing their flats — they want the right flat, in the right locality, at the right time and at the right price.

“Such high expectations are understandable since buying a flat is a major commitment for a young couple setting up a home together.”

And HDB is committed to providing high quality housing, even though it cannot accommodate every preference or expectation.

The prime minister also emphasised a point expressed several times by other ministers and very much an ongoing concern amongst flat buyers in the rising property market. And that is the government’s commitment to keeping HDB flat prices affordable for Singaporeans.

But Mr Lee said the government has less control over prices in the resale market.

He explained: “These resale prices are set by individual households who transact flats on a willing—buyer, willing—seller basis, and are affected by movements and sentiments in the wider economy, including in the private property market.

“Hence, resale prices of HDB flats will fluctuate from year—to—year. But over the long term, the value of HDB flats depends on the strength of the Singapore economy.”

So provided Singapore continues to do well, Mr Lee is confident the flats will maintain their value and Singaporeans can enjoy an appreciating asset.

Source: Straits Times Forum

Foo-Ho Yoke Ming (Mrs)
Deputy Director (Branch Operations)
Housing & Development Board

I REFER to Ms Mary Tan’s letter last Tuesday, ‘Subletting – Relaxation of rules works against genuine residents’. HDB flats are primarily meant for owner-occupation.

Each household can own only one HDB flat at any one time. However, we recognise that some flat owners may need to sublet their rooms or flat to meet their financial needs.

Therefore, flat owners can sublet their flats if they meet the HDB’s policy requirements. Flat owners who wish to sublet their whole flat must obtain approval from HDB and fulfil the minimum occupation period. HDB’s approval is not needed to sublet room(s) within a flat.

From Feb 1, owners who sublet rooms must register the subletting with the HDB within seven days of doing so. They must also notify the HDB when they renew or terminate their subletting contracts and when there are changes to their tenants’ particulars.

The new requirement supports the Ministry of Home Affairs’ efforts to eradicate loan-sharking activities, and to better protect HDB residents.

Flat owners who sublet rooms or their whole flat must comply with our terms and conditions, and ensure that their tenants do not disturb or inconvenience other residents unnecessarily.

Tenants cannot further sublet the flat to others. The HDB takes a very serious view of unauthorised subletting of flats and will act accordingly.