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Cooling HDB resale market calls for review of wait-out period policy, says PropNex

It also urged realignment of ABSD remission treatment for HDB upgraders.

As part of its Singapore budget wish list 2024, property agency PropNex has urged the government to review its 15-month wait-out period policy after the HDB resale market markedly slowed down in 2023.

It said the measure was meant to be a temporary rule to moderate demand and promote inclusivity for public housing at a time the HDB resale market was heating up in 2021 and 2022.

Currently, it said prices of secondhand HDB flats have eased to a 4.8% growth last year from the 10.4% increase in 2022 and the 12.7% spike in 2021.

“It could perhaps assess if the measure is still necessary, particularly since the residential collective sale market has been more downbeat in the past year with few successful sales,” PropNex said. 

Transaction volume also moderated last year with the trades of five-room flats or executive condos (EC) – widely favoured among former private homeowners – dropping dramatically following the policy’s implementation around 15 months ago.

Included in a package of cooling measures in September 2022, the government mandated homeowners who just sold their private properties to wait for 15 months before purchasing an unsubsidised HDB flat in the resale market.

“In addition, private home owners who have sold their residential property could have rented HDB flats as their interim accommodation until they serve out the 15-month wait-out period. This could also have inadvertently driven up the leasing demand and rentals for HDB flats,” the property consultancy said.

READ MORE: HDB rental prices to grow moderately in 2024 as demand stabilises

PropNex also reiterated its recommendation for the government to impose the same additional buyer’s stamp duty (ABSD) remission treatment for married couples upgrading from HDB to private housing with that of new EC buyers.

It said the upfront ABSD payment is a “hurdle” for family upgraders and may even force some to sell their HDB flats first before buying a private house to avoid paying hefty fees – a move that puts further pressure on the HDB leasing market.

“Perhaps the government can make such buyers undertake a mandatory requirement to sell their HDB flat within six months from taking possession of their private home, and failure to do so would result in the ABSD payment then, plus a penalty fee for not adhering to the requirement,” it said.

Lastly, PropNex also asked the state to include more EC sites in its government land sale programme to help meet the strong demand for public-private housing.
 

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