Singles can't buy 'Prime Location' HDB flats not a 'step backwards': Desmond Lee

He said the authorities will make adjustments and improvements along the way.

Jane Zhang | October 30, 2021, 04:01 AM

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Under the new Prime Location Public Housing (PLH) model announced on Wednesday (Oct. 27), Housing and Development Board (HDB) flats will be built in prime locations in order to keep public housing "inclusive and diverse".

However, one group that is noticeably excluded from the model are singles, as only eligible family nuclei — such as a married couple — are allowed to buy new or resale PLH flats.

In a speech at Singapore Economic Policy Forum 2021 on Friday (Oct. 29), National Development Minister Desmond Lee reiterated his explanation that PLH flats are meant to keep public housing in prime locations inclusive, and explained why some groups are excluded by the eligibility conditions.

Exclusions of some groups of people

Lee stated that more than 7,500 people had shared their opinions on the model, through feedback after the announcement of the PLH model, as well as prior public consultations.

One of the deepest points of contention, he said, has been about the additional eligibility conditions for resale buyers of PLH flats.

"They questioned: why are we excluding some groups of people from the PLH flats, even upon resale, if our aim is to keep these prime locations inclusive?"

Lee responded by saying that it is "not our intention to exclude anyone from these prime locations".

"If land and resources were not a constraint, one would seek to provide for all."

However, he said that because resale prices in the prime locations would likely rise too high for many Singaporeans without some intervention, there is a need for some "calibrated restrictions" in order to keep PLH flats accessible to a wider group.

He added that there are also other housing options in prime central areas, which can help cater to those who don't meet the PLH eligibility conditions.

Singles not allowed to buy PLH flats

Singles are only allowed to buy new 2-room flats in non-mature estates under the current BTO criteria. They will not be allowed to buy PLH flats.

Singles are also allowed to buy typical HDB resale flats, but they will not be allowed to buy resale PLH flats.

Lee acknowledged that some Singaporeans remain single for a variety of reasons — including obligation to family and parents, choice, or life course — and may still want or need their own living space.

They may wonder if the government cares about their housing needs, he added:

"To these Singaporeans, let me assure you: we do. We recognise your needs, your aspirations, and your sacrifices.

That’s why we’ve in fact been expanding housing options and grants for singles over the years. And we’re not taking a step backward in this regard."

Will make adjustments and improvements along the way

Lee said the PLH model is brand new and untested in the market, and there won't be many launched initially.

Thus, they are being prioritised, for the time being, for larger households who may need more space for more people in their families.

In the meantime, he said, singles can continue to buy existing resale flats, "including many in prime central areas".

"Let us launch this new policy, assess the impact of the current suite of measures in achieving our objectives, and gain experience operating the model, as we make adjustments and improvements along the way, bearing in mind the evolving demographics of Singapore and changing aspirations of Singaporeans."

Other eligibility conditions

In addition to the current exclusion of singles from purchasing PLH flats, there are also several other eligibility criteria under the PLH model.

While non-citizens can buy typical resale flats as long as only one applicant is either a Singapore citizen or permanent resident (PR) and a household can comprise only PRs, for purchasing PLH flats, at least one applicant must be a citizen and the household must comprise at least one citizen and one PR.

In addition, the prevailing income ceiling — currently S$14,000 — applies to PLH flats bought from HDB and the resale market, whereas there is currently no applicable income ceiling for buying typical resale flats.

Better-off households who do not qualify under the PLH model should be better placed to afford other housing options in prime central areas, like existing resale HDB flats or private housing, Lee said.

Another way of testing for wealth or serving as some form of proxy for wealth is by disallowing private property owners from buying a PLH flat until 30 months after they have sold off their private property, according to Lee.

For typical resale flats, private property owners are allowed to purchase them as long as they dispose of their private property within six months of buying the resale flat.

Increased Minimum Occupancy Period

Additionally, there is an increased Minimum Occupancy Period (MOP) for PLH flats, as well as additional restrictions on rentals.

The MOP for non-PLH flats purchased from HDB is five years; the MOP for PLH flats is 10 years.

This means that PLH flat owners will need to own their flats for at least 10 years before they can sell them in the open market or invest in a private residential property.

MND and HDB said this is because of the need to safeguard these flats for Singaporeans with "genuine housing needs", and to strengthen the owner-occupation intent.

Lee stated that some people were concerned that the 10-year MOP is too long and not practical, while others feel that it is too short.

He said the government will consider the appeals of people facing extenuating circumstances during their MOP, on a case-by-case basis, in deciding whether to take back their flats or to allow them to sell in the resale market.

Owners of PLH flats will not be able to rent out the whole flat, even after the MOP, although they may still rent out spare bedrooms. This is because PLH flats will likely fetch higher rents, so should be prioritised for those who are buying a long-term home, Lee said.

He closed his speech by reiterating that "the PLH model is about keeping our housing estates inclusive and accessible, so that we can build strong, united, and enduring communities", and added that the government will review the model over time.

Top photo via MND. 

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