EIP-constrained HDB flat buyback long overdue: experts
The board said it will buy back flats at a 'reasonable' price.
National Development Minister Desmond Lee announced the Housing and Development Board (HDB) will be buying back flats affected by the Ethnic Integration Policy (EIP) at "a fair price." Introduced in 1989, the EIP set quotas for flats owned by each ethnic group in an HDB block or neighbourhood to avoid concentrations.
OrangeTee said the policy change was a good initiative to level the playing field for EIP-constrained flat owners in the property market, as well as give them a higher chance of enjoying an equitable capital appreciation like other flat sellers.
Moreover, PropNex Realty CEO Ismail Gafoor commented, "We are heartened by the announcement on the HDB buyback of eligible EIP-constrained flats. We believe it is long overdue, and we are delighted that EIP-affected flat owners who have difficulties selling their flat will now have another option to turn to. EIP-affected sellers tend to take a much longer time to sell their flat, at least a year and may sell their units at a big discount compared to their neighbours who are not affected by EIP limits. Sometimes, the price difference could amount to more than $50,000. This policy change will help to ensure that certain groups of flat owners, such as minority sellers will not be unfairly burdened by the EIP limits, one of the tools to promote racial harmony in Singapore."
After studying various ideas, including giving grants to households who have to sell their flats at significantly lower prices, Lee said the 'most feasible' option would be to buy back the flats.
"This is not a decision that we make lightly because it requires significant government resources. But we believe it is the right thing to do because the EIP benefits all of us and helps to foster a more cohesive society," he added.
The HDB said it will buy back flats from eligible EIP-constrained flat owners unable to sell their homes at a reasonable price. Requests will be assessed on a case-by-case basis, considering criteria such as whether they have fulfilled the minimum occupation period and owned the flat for at least ten years.
Owners should also have made regular genuine attempts over a continuous period to sell the flat at a reasonable asking price while constrained by one or more EIP limits. This period should be comparable to the time taken by most owners to sell their flats, six months according to HDB's experience. But the authorities noted this may change depending on market conditions.