01 February 2006

Mr Wang is Glad He Does Not Depend on Rental Income For A Living ....

... because he could have been hurt by this latest HDB move.

ST Feb 1, 2006
HDB puts up five-room and executive flats for rent
By Daryl Loo

FOR the first time, the Housing Board is putting up five-room and executive flats for rent through a private company.

On offer are 160 five-room and 90 executive flats in Jurong West, Sengkang and Bukit Merah.

Property agents say these are likely to be from the HDB's stock of 9,000 unsold flats. In the past, it has only offered smaller units for rent through property companies.

....

This means that while foreigners on student and employment passes may rent the flats, foreign construction and factory workers are barred.

...

The HDB's annual report for the year ending March 2005 said it had 19,488 one-room and 23,057 two-room units for rent, mainly to low-income households.

It also rented out 6,856 three-room and 702 four-room units, mainly to companies as workers' housing.
So the HDB oversupply problem just goes on and on. See Mr Wang's old post on this matter. Back in May last year, the HDB broke its own sacrosanct rule and started, for the first time ever, to sell HDB flats to non-Singaporeans.

Now it seems that the HDB will also rent out what it cannot sell. This marks an important shift in policy. In the past, the HDB did rent out its flats but this was to low-income families who couldn't afford to buy a flat. Now the HDB is renting out five-room and executive flats, and the target market includes expats and foreign students. This brings the HDB into direct competition with private sector lessors.

The HDB's latest move will particularly affect Singaporeans who had purchased, for investment purposes, a second residential property in or around the Jurong West, Sengkang or Bukit Merah areas. They would have had the expectation of being able to rent the property out and use the rental to offset the monthly mortgage payments. Now, they will find it more difficult to find tenants and rental income may be affected too.

A Jurong West condo owner reacts
to the latest news from HDB.

7 comments:

geekgeek said...

Perhaps if HDB got rid of their stupid ethnic quota they might not have that much of an oversupply problem.

Kevin said...

geekgeek: Hmm, is there really ethnic discrimination when trying to get HDB housing? I might have to get myself a flat if I go back to Singapore and I'm really out of touch. :P

Merv said...

Question:

Does the racial quota apply to prospective tenants?

charles said...

The racial quotas are one of the great ideas from PAP; maybe implemenation could be better in roder to allow familiy memebers to stay together if they wish to, but otherwise it is better to make sure that the local Singapore looks like the global Singapore.

Note to those who believe in buying flats in Singapore for investment: don't. It's a bigger whiter elephant.

geekgeek said...

kevin:
You call it discrimination, the gahmen calls it a "quota" ;P

AFAIK, for new flats that HDB puts up for sale, there is a restriction on the number of Chinese, Malay and Indian/Other families that may occupy that particular block of flats.

To be honest, I have no idea how HDB arrives at these figures, or why they are even there in the first place.

My own suspicion is that these block of flats could be unsold due to the fact that the only races eligible to buy them are unwilling for whatever reason, and since HDB is steadfast in their "quota" policy, they are faced with a surplus.

I have no idea if rentals will have the same quota applied to them. If it does, then it would seem to defeat the purpose; on the other hand, if it doesn't, then it will show that HDB's quota is a farce.

mrdarren said...

Kevin,

I believe the ethnic housing quota applies to purchase of new HDB flats and resale HDB flats (2nd hand market). See http://www.hdb.gov.sg/fi10/fi10203p.nsf/WPDis/Selling%20Your%20FlatEthnic%20Group%20Eligibility?OpenDocument&SubMenu=Policies

No mention of ethnic quota applicable to HDB rentals, I think there is a legislative gap. Oh wait, we don't wanna make it more difficult for HDB to profit from unsellable flats!

klimmer said...

does the ethnic quota really affect the over supply of HDB flats? I thought it was merely an over ambitious HDB reading the market wrong. One thing's for sure - the gloves are off and we can be sure the HDB is in it only for the money. So much for the rubbish regarding 'subsidies' for the HDB flats. I recall someone actually got sued for talking about it.

Making money comes first for this gahmen.