Raise MOP to 10 years for first-timers

The slew of measures introduced by the Government yesterday appears aimed at the property market speculator and should provide some relief to the genuine home-buyer from sky-high prices.

Developers, while openly welcoming the measures, will surely be cursing under their breath. Also rumbling will be those holding property stocks which will take a little beating, especially initially. True, the measures come at a time when residential property prices, especially at the very high end, already appear to be softening. So some will feel the timing somewhat inappropriate, even a little late.

Nonetheless, prices of private homes did rise 11 per cent in the first half, while the HDB Resale Price Index recorded a high of 4.1 per cent in the second quarter, after rising by 3 per cent per quarter since a year ago.

With more than four-fifths of the population in Housing Board flats, the question for many will be whether plans to ramp up supply are adequate to meet the demand, especially from newly-weds. The HDB says “if demand remains strong”, it is prepared to launch up to 22,000 new flats next year.

Why not go ahead to build these flats anyway, even if they are ahead of demand?

Surely the HDB knows exactly how many people are on the waiting list and should not be caught by surprise, as has happened in recent years leading to the current high prices of resale flats.

While raising the minimum occupation period (MOP) for non-subsidised flats from three to five years should help in dampening HDB prices, the board should reconsider the five-year MOP for first-time buyers too and increase that to 10 years, as it stood some years back.

Exceptions could be made on a case by case basis, for those who need more space as their family unit increases, or those who find they can no longer afford the bigger units now.

HDB flats are meant for long-term owner-occupation. Moreover they are considered subsidised (they are not sold at market prices, hence the high prices in the resale market) and therefore, occupiers must bear with stricter restrictions in trading their flats.

However, the move to prevent HDB buyers from owning private property within the MOP period could be harsh on senior citizens who depend on rental income from such properties.

Under the new rules, those who own private property must dispose of it within six months of buying a non-subsidised flat. Perhaps an exception could be made for senior citizens, at least for one private property.

Source : Today – 31 Aug 2010

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