New HDB Buyers will be the ones mainly affected by new measures

2012-09-10 18.25.04Finally coming out to clarify after a week of rumors and a jittery stock market causing property counters to tumble, Minster of Ministry and National Development (MND), Khaw Boon Wan, said that if they have new measures it will mainly affect new HDB Buyers who purchase New HDB Flats. The likelihood is that they will prolong the Minimum Occupation Period or MOP for these New HDB Flat owners. It is common that new HDB Flats are sold for a premium at the end of their 5 year MOP in the resale HDB Market. There is often hot interest in such flats because they are fairly new, and those that do not qualify to buy direct from HDB, may still enjoy a fairly “New HDB Flat” when they purchase it 5 years down the road.

Some call this premium the “pre-BTO-premium”, which refers to the wait these New HDB FLat owners had to endure, which may sometimes be up to 4 years for the Build-t0-order HDB Flats to be built.

We cannot say that this is a loophole for HDB Flat owners, because during the waiting time of the BTO and finally getting the flat and at the end of 5 years, the family direction or options or financial condition may have changed in that 8 to 9 years. Some cry foul that if such new measures were to be put in place they would rather not buy new HDB Flats. Some new HDB Flat buyers that I spoke to who were waiting for their turn to choose HDB Flats at HDB Hub in Toa Payoh, they said that it wouldn’t be fair. One Mr Teh who spoke to me, a new citizen from Penang, Malaysia, said that if he has a 3rd child, the 4 room flat they have applied for may be too small for his family, 3 kids and his 2 parents. He will have to upgrade to a bigger flat for all to live more comfortably. If they are forced to keep the flat for an extended period, he hopes it won’t be too long and says not more than 2 years seems reasonable, any longer will cause hardship as he may have to rent a room/flat for his parents to stay. Mr Teh’s parents help to look after the kids while he and his wife work full time, so they may do without a domestic helper.

As this new measure is not official, I guess Minister Khaw is just testing the water, and that they basically want to bring down the prices of resale HDB, which are seeing million-dollar HDB Flats being transacted.

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