New measures cool PR hunt for resale flats

NEW measures that prevent people from owning both public and private properties appear to have discouraged some permanent residents from buying resale flats here for now.

Agents have seen PRs delaying house hunting, and they expect PRs to account for fewer sales.

Behind the change in sentiment are rules introduced by the government this week to cool the residential property sector.

From Aug 30, a private property owner who buys a non-subsidised HDB flat will have to sell his private property here or abroad within six months of the flat purchase.

Also, a person who buys a non-subsidised flat can only buy a private property here or overseas after fulfilling a minimum occupation period of five years.

PRs whom already own or intend to buy properties back home, are caught by the new rules.

‘We have got instances where PRs who were looking for properties have postponed the intention or the decision,’ PropNex chief executive Mohamed Ismail said. ‘They said that they want to have a clearer understanding.’

C&H Realty managing director Albert Lu also said a PR had decided not to go ahead with a resale flat purchase. The client not only has a home in Malaysia but also wants to buy another private property without having to wait five years.

The two industry experts are among those who believe PRs’ demand for resale flats will weaken. PRs currently account for about 20 per cent of all resale flat transactions.

Mr Ismail expects 30-40% of the pool of PR buyers to have second thoughts on buying a flat in the short term. They may return after they have had time to rethink their plans.

Mr Lu thinks the impact will be slight with some 10 per cent of prospective PR buyers withdrawing from the market.

But there are also agents who do not expect the new rules to affect PRs’ appetite for resale flats much.

A senior agent who declined to be named suggested the Housing & Development Board may rely on PRs to declare whether they own properties overseas. Some PRs may declare otherwise so that they can still buy resale flats here, according to him.

Enforcing the new rules is one concern that several market watchers voiced. HDB has yet to say how it will keep track of foreign property ownership or what penalties it will impose on those who flout the rules.

HSR executive director (agency) Jeffrey Hong said there will always be PRs who can buy resale flats because they do not have properties back home. High net worth PRs are usually not interested in buying flats in the first place, he said.

While some buyers have got cold feet, one group of private property hunters has gone full steam ahead, snapping up all 68 units at the newly launched Dorsett Residences above Outram Park MRT station.

The 99-year leasehold project was previewed and sold out in a day with average selling price at $1,800 psf.

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