3 years before you can sell resale flats

BUYERS of non-subsidised HDB resale flats must now occupy their flats for at least three years before they can sell, under new rules unveiled yesterday.

This is up from 2-1/2 years for buyers with HDB loans and one year for buyers with bank loans or no loan.

The move, effective yesterday, is seen as a government effort to curb speculative buying and selling of public housing.

Home hunters have expressed dismay in recent months that speculators may be pushing up HDB resale flat prices.

Property consultants said the move is set to nip speculation in the bud but is not likely to result in lower flat prices.

The move comes after an HDB study found that a growing number of flat owners were selling flats within three years.

In late January, National Development Minister Mah Bow Tan flagged a review by HDB of its rules, with a view to stamping out possible speculation.

In Parliament yesterday, Mr Mah said said more flat owners had been selling flats as soon as the minimum period was up, although the numbers were not large.

He added: ‘However, if the trend continues, buyers who genuinely need housing could be crowded out.’

He was responding to MP Ang Mong Seng’s request for a review of the one-year minimum period applying to those with bank loans or no loan.

‘HDB flats are provided primarily for owner-occupation and not speculative profit or rental return,’ said Mr Mah.

HDB said in a statement that the change meant demand would more accurately reflect interest from buyers who wish to occupy flats.

Different rules apply to subsidised buyers who receive HDB grants.

Home hunter Sofian Buang, 33, a loading officer, said: ‘My biggest concern is getting a roof for my family, now that I have a daughter. I am looking for a resale flat to settle in, not to sell or to rent out.’

ERA Asia-Pacific associate director Eugene Lim said the change would remove buyers who wanted to flip HDB flats after a year. ‘With a smaller group chasing after HDB resale flats, price increases will slow down,’ he said.

Demand for resale flats outweighs supply so prices will still rise, but perhaps at a slower pace, said C&H Realty managing director Albert Lu.

Mr Steven Tan, executive director of OrangeTee’s residential division, said the change would cut speculation but that the Government should look at private property owners buying HDB flats to rent out right away.

If demand is growing and fewer people choose to sell because they want to lease their flats out, prices will rise, he said.

Mr Mah said that of the 682,000 flats that are eligible for subletting, only 3 per cent are sublet, suggesting that most flat owners are buying their flats for occupation, and not rental.

Amid concerns of runaway HDB prices, other MPs yesterday raised questions, including a possible ban on some buyers.

‘There is a populist suggestion that we should ban private property owners from buying HDB flats,’ said Mr Mah. But if the Government did so, what about HDB owners buying private property, he said.

Most resale flat buyers are citizens who do not own any private property, he said, adding that there was no evidence that specific buyer groups, like PRs and private property owners, were driving up prices.

He said buyers who did not want to pay very high prices could walk away.

Some other key changes unveiled yesterday include allowing upgraders and those who downsize to apply for a second concessionary HDB loan. This could push up resale activity for smaller flats in the resale market, said PropNex chief executive Mohamed Ismail.

The HDB study found that last year, 9 per cent or nearly one in 10 resale flats sold had been owned for under three years. Between 2005 and 2007, the figure was just 6 per cent of sales.

Source: Straits Times, 6 Mar 2010

THE Lease Buyback Scheme will be expanded to include an additional 3,800 households of elderly folk.

It will now include people who have owned four-room or bigger flats. Previously, the scheme was restricted to those who own three-room or smaller units.

The HDB said in a statement yesterday that although these homeowners would have received substantial proceeds from the sale of their earlier flats, some could still be in need of help. They include those who may have downsized many years ago.

The second group added into the scheme are households with an outstanding mortgage exceeding $5,000 but who would be able to buy an immediate annuity under CPF Life for at least $60,000 with the HDB payout. Previously, the household had to have less than $5,000 outstanding on a home loan.

The changes, which were outlined in Parliament yesterday, kick in on April 1.

They will make 3,800 more elderly households living in three-room or smaller flats eligible for the scheme, said HDB.

This will bring the total number of eligible households to 34,800 – which is 82 per cent of elderly households in three-room and smaller flats.

The Lease Buyback Scheme started in March last year and helps the elderly sell their HDB flats to the Government for cash. HDB buys back the tail-end of a flat lease at market valuation, leaving a 30-year lease for the household.

For example, if a flat has 70 years left on the lease, HDB buys 40 years of the lease from the owner at market rate with the cash going into a CPF Life annuity in the owner’s name. He receives a monthly income stream for life.

To be eligible, a home owner must be 62 or over, own a three-room or smaller flat, have enjoyed only one housing subsidy and must have lived in the flat for at least five years. The household must also not have owned or currently own a private home and must not have a monthly household income exceeding $3,000.

Ang Mo Kio GRC MP Lee Bee Wah hopes to see the scheme extended to elderly households currently living in four-room flats.

Source: Straits Times, 6 Mar 2010

SECOND concessionary loans from the Housing Development Board (HDB) – once reserved for the most part for upgraders – will be far more widely available from today.

Homebuyers will also be made to dip into their own pockets first before reaching for a loan, with HDB reducing the amount of the second concessionary loans it grants.

Under changes announced yesterday, buyers who move down to smaller flats or to the same type of flat will find it much easier to get the loan.

In the past, second concessionary loans were granted to downgraders only on a case-by-case basis.

The more liberal policy announced by National Development Minister Mah Bow Tan yesterday will help Singaporeans right-size to a home they can sustain over the long-term, to encourage financial prudence.

Mr Mah added that restricting the loan for upgrading might drive households to upgrade even if it were not a prudent move.

‘With greater economic volatility, the flexibility to right-size will be more important… But I hope residents will take that second loan carefully and cautiously,’ he said.

HDB buyers who have sold private properties will remain ineligible for a second concessionary loan.

Many Members of Parliament have been calling for this change for some years.

The HDB said that the change will benefit families which need to right-size to smaller flats but which lack sufficient proceeds from the sale of their existing flats.

It will also be less generous with the way second concessionary loan amounts are awarded.

The loan will be reduced by a homebuyer’s full CPF balance and part of the cash proceeds from the sale of the first flat in an effort to further ensure financial prudence.

But the household can retain at least half of the cash proceeds, or $25,000 in cash, whichever is greater.

The right-sizing of loan amounts will ensure that flat buyers do not take a larger than necessary concessionary loan, reducing the likelihood of subsequent mortgage arrears, the HDB said.

‘(These changes) will help homebuyers manage their finances for their flat purchase upstream, and avoid financial difficulties downstream,’ Mr Mah added.

PropNex chief executive Mohamed Ismail said the changes would allow homeowners to unlock the capital appreciation of their homes over the past three years and to reorganise their finances.

Source: Straits Times, 6 Mar 2010

SINGAPORE’S policymakers have imposed limits on the number of public flats in each block and neighbourhood that can be sold to permanent residents (PRs) to prevent enclaves of foreigners developing in the heartlands.

The new quotas announced yesterday will be set at 5 per cent of flats for Housing Board (HDB) neighbourhoods and 8 per cent for blocks.

Malaysian PRs are excluded from the curbs because of their close historical and cultural ties to Singapore.

The Government has also sharpened the differentiation in housing benefits enjoyed by citizens and PRs.

Under existing rules, all Singaporean couples and couples where a citizen is married to a PR can buy new flats at subsidised prices or apply for housing grants for resale flats.

With immediate effect, a citizen-PR couple will have to pay a $10,000 premium for new flats launched by the HDB.

Citizenship incentive

They will also get $10,000 less in housing grants if they buy a resale home.

But the amount will be restored if the PR family member becomes a citizen or the couple has a child who is a citizen.

National Development Minister Mah Bow Tan, who unveiled the measures yesterday, told Parliament that the changes were to ‘provide an incentive for PRs to take up citizenship… and also reinforce the principle that Singaporeans are our priority’.

Several MPs also raised concerns yesterday about the presence of foreigners in HDB estates.

West Coast GRC MP Cedric Foo noted that property agents have already observed trends that show PRs from Myanmar favouring Jurong West while Filipino PRs are buying at Bukit Panjang.

Mr Mah said the new quota policy will contribute to integrating locals and migrants: ‘Even though PR enclaves are not a problem today, we should put precautionary measures in place early. Otherwise, it might be difficult to unravel problems later.’

PRs comprise about 14 per cent of the population living in HDB flats, according to 2009 figures.

PR families own only 5 per cent of HDB flats; however, there are western and northern towns where this proportion is slightly higher than the 5 per cent average, said Mr Mah.

The HDB said yesterday that 13 out of 162 neighbourhoods islandwide, in towns such as Choa Chu Kang, Bukit Batok, Jurong West and Sengkang, are likely to be affected by the new quota.

The new limits for PRs will apply in addition to the existing Ethnic Integration Policy (EIP), which sets ratios for ethnic groups to ensure a balanced mix in housing estates.

In line with demographic shifts, Mr Mah said the HDB will raise the limit for the category of ‘Indian and Others’ under the EIP from the current 10 and 13 per cent for neighbourhood and blocks, to 12 and 15 per cent respectively.

The Government’s move comes amid rising anxiety among local residents about the impact that PRs have on the public housing market and social environment.

This was reflected in comments made by MPs yesterday in the Budget debate.

Mr Mah explained that ‘there is no evidence that specific buyer groups, like PRs and private property owners, are driving up prices’.

As a proportion of buyers, the number of such buyers remains small, he said.

Mr Colin Tan, director of property consultancy Chesterton International, said that PRs have a slight impact but are not the real reason why HDB resale flat prices are rising.

‘This is due to shortage in supply amid higher-than-expected demand,’ he said.

The impact of the new quota could see demand for HDB flats spread more evenly throughout estates and so moderate price rises, he added.

Residents told The Straits Times that they had mixed reactions to the move.

Mr Khoo Sze Wee, 25, of Jurong West said ‘the PR’s loss in ability to get housing will definitely be our gain. But they shouldn’t be entirely denied housing opportunities’.

PR Lim Bee Lian, 49, felt the new move would restrict housing choices: ‘PRs who have the ability to buy their own flats should be allowed to buy.’

Source: Straits Times, 6 Mar 2010

THE Housing & Development Board (HDB) yesterday unveiled policy changes designed to hurt speculators and make it more expensive for non-Singaporeans to buy government-subsidised flats.

The Board also agreed to make a much campaigned-for change: it will now allow buyers to take a second concessionary loan from HDB even if they downsize to a smaller flat or move to a flat of the same size. Previously, only upgraders qualified for a second concessionary loan.

Announcing these and other measures in Parliament yesterday, National Development Minister Mah Bow Tan noted that public housing is an especially hot issue this year.

‘Someone asked me recently if I was feeling the heat and I don’t think he was talking about the weather,’ Mr Mah quipped, beginning his reply after a slew of questions from Members of Parliament (MPs).

Many MPs were concerned that some buyers were using HDB flats to speculate in the property market and driving up prices in the process. HDB resale prices hit a new high in Q4 2009, with prices climbing 3.9 per cent from the previous quarter. The median cash-over-valuation (COV) for all resale transactions doubled to $24,000 in Q4 from $12,000 in Q3.

Data from HDB shows that the proportion of flat owners who sell their units within three years of purchase rose to 8.9 per cent for the first 10 months of last year. And in 2008, 7.9 per cent of buyers sold their units within three years. In comparison, less than 7 per cent of buyers sold their flats within three years from 2005 to 2007.

To reduce the number of people using HDB flats to speculate in the property market, the time that buyers are required to stay in their flats before reselling them (minimum occupation period or MOP) will be increased to three years for all flats bought in the resale market. Currently, the MOP is 2.5 years for buyers who choose to take up an HDB concessionary loan and just one year for buyers who either take a commercial bank loan or do not take any loan.

‘I want to emphasise that HDB flats are provided primarily for owner-occupation and not speculative profit or rental return,’ said Mr Mah.

The decision to remove the upgrading condition for the second concessionary loan, in comparison, is to encourage greater financial prudence and flexibility among homeowners. Feedback from MPs said that by providing the second concessionary loan only to upgraders, some might inadvertently be driven to upgrade even though it may not be prudent to do so.

‘Since we are now seeing a situation of greater economic volatility, the flexibility to right-size will become more important,’ said Mr Mah.

But the new policy comes with strings attached. Currently, cash sales proceeds from the sale of a flat need not be used for the purchase of the next one. But with the change, sellers can only keep the greater of $25,000 or half of the cash proceeds. The remaining cash and CPF balance has to be used to finance the purchase of the next flat if they take up a HDB concessionary loan.

The lifting of the upgrading condition is expected to benefit about 1,000 households a year. Currently, HDB grants about 4,000 second concessionary loans each year, mostly to households upgrading to bigger flats.

Social impacts

HDB also said that 3,800 more elderly lessees will now benefit from its lease buyback scheme which has been revised. The scheme allows the elderly to monetise their flats by selling the tail end of the flat’s lease back to HDB.

Other measures are calculated to have social impacts. To encourage permanent residents (PRs) to take up citizenship, HDB will withhold $10,000 of the subsidies for a household made up of one citizen and one PR when they buy a HDB flat. Once the PR converts to citizenship, or when the couple has a Singapore citizen child, the Board will return the withheld subsidy.

‘These measures will give greater assurance to citizens that they are our priority, and at the same time, encourage our PRs to view citizenship more favourably,’ Mr Mah said.

A quota cap for PR households of 8 per cent in each block and 5 per cent within each neighbourhood was also announced. It will be applied on top of the ethnic integration policy (EIP) but will not apply to Malaysian PRs. The EIP was also tweaked slightly. In line with demographic shifts, the Indian/Others limit was raised from 10 per cent and 13 per cent at the neighbourhood and block levels to 12 per cent and 15 per cent respectively.

Property analysts said that the revision of the MOP to three years and the removal of the upgrading condition will affect the HDB market.

‘By standardising the MOP at three years, the ‘turnover’ rate is slowed down from one year to three years. This has the effect of preventing ‘flippers’ from pushing up resale prices with their short-term objectives,’ said Eugene Lim, associate director for ERA Asia Pacific.

But PropNex chief executive Mohamed Ismail said that there will be little impact from this policy which will, at most, just encourage buyers to adopt a mid-to-long term view when buying their flat. He feels that the most notable measure was the extension of the second HDB concessionary loan to downgraders.

‘We may see an increase in market activity due to an increase in downgraders,’ Mr Mohamed said. But he declined to predict if there will be an increase in resale flat prices as it is ‘too soon’ to assess the impact.

Noted Mr Lim: ‘With this change in policy, Singapore citizen households are likely to be attracted to take loans from HDB, leaving only PR households to take bank loans. Banks may now have to re-package their loans more attractively as they battle for market share.’

ERA has a 41 per cent share of the resale HDB market and based on its transactions, some 50 per cent of buyers use bank loans, another 40 per cent get loans from HDB and 10 per cent pay for their flats using cash.

Source: Business Times, 6 Mar 2010

TOWN councils can look forward to government help in paying for lift upgrading.

Senior Minister of State for National Development Grace Fu said it is considering a one-off subsidy for town councils, estimated at $130 million in total.

The amount each will receive will depend partly on the complexity and scale of the lift upgrading project, she said yesterday.

Town councils will be given the details later this year.

They now co-pay the cost of the Lift Upgrading Programme (LUP) to make it more affordable for residents.

While this is well-intended and should be upheld, it must be ensured that this co-payment ‘does not overstrain the town councils’ ability to meet other cyclical works, which are also for the benefit of residents’, said Ms Fu.

She added that even though the Government bears the bulk of the cost of the LUP, at $5.5 billion, town councils still have to co-pay about $360 million in total – not a small sum.

This can pose a ’significant burden’ for some town councils, especially those with a high concentration of flats built in the 1980s, when homes were built to allow greater privacy. These flats will require costlier lift projects.

Ms Fu was answering questions from MPs, such as Mr Ahmad Magad (Pasir-Ris Punggol GRC) and Mr Masagos Zulkifli (Tampines GRC), on the lift upgrading burden on town councils.

She also provided an update on the LUP, saying it was ‘on track’.

The Government has identified more than 90 per cent of the blocks eligible for lift upgrading, and 50 per cent have works completed or ongoing, she said.

The HDB will select the remaining blocks for upgrading over the next two years or so and the whole programme will be completed by 2014, as earlier announced.

Source: Straits Times, 6 Mar 2010

NATIONAL Development Minister Mah Bow Tan yesterday addressed the issue of flat owners up in arms over the fact that new rental flats will be built in their neighbourhoods.

Appealing for their understanding, he said: ‘In land-scarce Singapore, give and take is often necessary to make space for the different groups in our society.’

He was replying to Madam Ho Geok Choo (West Coast GRC) during the debate on his ministry’s budget estimates.

She brought up residents’ grievances that they had not been consulted about the move to build rental flats in their neighbourhoods.

Mr Mah said residents were informed of construction works before these started.

‘As far as possible, HDB will minimise blockage and inconvenience from the rental blocks. As for concerns about resale prices, HDB’s data suggests that rental blocks alone do not affect prices,’ he added.

Responding to demand from Singaporeans, the Housing Board recently decided to build 7,000 more rental flats in various parts of Singapore over the next three years.

This will increase the supply of rental flats to 50,000 units.

Combined with changes to eligibility rules, the increased supply will halve waiting time for such flats – from 21 months a year ago to 12 months now.

This way, the Government ensures that the truly needy get rental flats faster, Mr Mah noted in response to Mr Teo Ser Luck (Pasir Ris-Punggol GRC) and Madam Ho.

Mr Teo recounted the story of a couple with two young children – aged two and four – who appealed to him for help. They lived in a room in a friend’s house, but because their friend needed the room back, they ‘were extremely anxious and helpless’ while waiting for a rental flat to be allocated to them.

Said Mr Teo, who is also Senior Parliamentary Secretary at the Ministry of Community Development, Youth and Sports: ‘Time is of the essence… While they are waiting, they can’t afford to live anywhere else, (so) they end up living outdoors.’

Mr Mah assured MPs that the HDB ‘has a heart’ and will help those in genuine need.

But he also pointed out: ‘The problem is that sometimes people take advantage of HDB’s kindness.’

He cited the case of a resident who did not pay his loan instalments for three years, resulting in the HDB having to acquire the flat back from him.

‘There is a limit to compassion. Decisive action is needed to prevent households from spiralling further into debt, but HDB will always ensure that they have viable housing options,’ said Mr Mah.

Source: Straits Times, 6 Mar 2010

MND draws over 40 queries from MPs, more than any other ministry

THE suggestions flew fast and furious yesterday as MP after MP rose in Parliament to speak on the hottest topic of the day: How to make housing more affordable and better for Singaporeans.

Proposals ranged from ideas already much-discussed – such as extending the minimum occupation period for HDB flat buyers to discourage speculation – to the new and extreme, including disallowing private property owners from buying HDB flats altogether.

A total of 15 MPs took turns to question the Ministry of National Development (MND) about its policies yesterday as Parliament kicked off the Committee of Supply debate, in which each ministry has to defend its spending plans for the coming financial year.

Another seven MPs are scheduled to query the MND on Monday when the debate resumes.

In all, the ministry, which covers housing and land-related matters, attracted more than 40 queries from MPs – more than any other ministry in the entire Committee of Supply debate.

Some of the most radical recommendations yesterday came from Mr Hri Kumar Nair (Bishan-Toa Payoh GRC), who proposed removing the income ceiling for HDB flat buyers so that any Singaporean who wants to buy a flat can do so.

However, private property owners should be forbidden from buying any HDB flats at all, he added.

To prevent speculation in the private property market, Mr Nair also suggested that foreigners who resell their property within three years of buying it should pay a tax on any profit they make.

Buying and selling the option to purchase a property should also be discouraged by making these options non-transferable or taxing gains made from these transactions, he said.

Mr Nair and Mr Cedric Foo (West Coast GRC) also mooted the idea of building a ready supply of new flats for buyers with urgent needs, rather than allocating units only under the Build-To-Order (BTO) scheme.

Alternatively, Mr Foo added, HDB could start building BTO flats sooner: after 50 per cent of the units had been booked, rather than the current 60 to 70 per cent of bookings required.

In response, Minister for National Development Mah Bow Tan said it is better to build flats based on real demand as demonstrated by actual bookings.

‘If we built ahead of demand, we could end up with a large stock of unsold flats, as in the early 2000s,’ he said.

He added that the waiting time of ‘three years plus’ for a BTO flat is no different from that of private developments. ‘For those who cannot wait, they can buy from the resale market immediately, but at a premium for speed and choice.’

Mr Mah also addressed Mr Liang Eng Hwa’s (Holland-Bukit Timah GRC) query about the BTO system needing to be tweaked as many applicants drop out of the queue when they cannot get their ‘choice’ flats.

While the system may not be ideal, it is a fair one, he said. ‘There will be some flats which are not ‘ideal’… We cannot promise everybody a flat of their choice.’

MPs including Dr Lim Wee Kiak (Sembawang GRC), Madam Ho Geok Choo (West Coast GRC) and Mr Masagos Zulkifli (Tampines GRC) had also raised concerns about speculation in the HDB market and high cash-over-valuation (COV) levels.

To this, Mr Mah stressed that ‘the HDB resale market is a free market, and we should keep it that way’.

He said the COV is the result of negotiation between willing parties and reluctant buyers can always walk away.

In any case, Mr Mah added, the bulk of resale flat buyers are citizens who do not own private property, and ‘there is no evidence’ that specific buyer groups such as permanent residents or private property owners are driving up prices.

Source: Straits Times, 6 Mar 2010

NATIONAL Development Minister Mah Bow Tan spent some time in Parliament yesterday addressing popular misconceptions about Singapore’s public housing market.

MYTH: There are not enough HDB flats to meet demand.

HIS RESPONSE:

# The HDB released 13,500 new flats last year and will release another 12,000 or more this year. This is more than the total number of flats in Clementi or Jurong East (about 23,000 flats each).

# The massive oversubscription rates for new flats are misleading. That is because half the number of flat applicants choose not to book a flat when invited to do so. Many say this is because they could not get a flat of their choice, yet in recent selection exercises, one-third rejected flats on the first day of selection, when all the flats were available.

# Some first-time buyers have complained that they have tried repeatedly to get a flat to no avail. But when the HDB reviewed 477 such cases in the last six months, it found only 29 appeals (6 per cent) were genuine.

CASE STUDY: Mr C complained about his lack of success in getting a flat. The HDB’s checks found that he had submitted four applications, three of which were in highly popular mature estates. In six months, he consecutively rejected three offers of flats: one offer of 121 flats in Punggol/Sengkang because he had been ‘targeting a unit in Buangkok’; another offer of 143 flats in Punggol because ‘the units left are facing the mosque’; and a third offer of 14 flats in Serangoon, Yishun, Ang Mo Kio, Tampines and Woodlands because these were not his ‘choice’ flats.

MYTH: HDB flats are unaffordable.

HIS RESPONSE:

# On top of the CPF Housing Grant of $30,000 or $40,000, there is an Additional Housing Grant (AHG) for lower-income families of up to $40,000. As of Jan 31, the Government disbursed more than $330 million in AHG to more than 20,000 families.

# The median house price is 5.8 times the median household income in Singapore. In comparison, the ratio is 7.1 in London and 19.8 in Hong Kong.

# The average mortgage payment for new flats in non-mature estates sold in 2009 was 22 per cent of monthly household income. This is well below the affordability benchmark of 30 per cent to 35 per cent.

# Four out of five Singaporean new flat buyers service their housing loans from CPF savings, without any cash payment.

CASE STUDY: Mr and Mrs S, with a $4,500 monthly income, bought a four-room flat in Punggol for $297,900. They received $10,000 in grants and took a concessionary loan of $268,100 (90 per cent of the price) from the HDB. The couple’s monthly instalment is $1,073, or 24 per cent of their income. They can use $1,035 from the CPF to service the mortgage and end up paying only $38 monthly in cash.

MYTH: PRs push up prices.

HIS RESPONSE:

# The median cash-over-valuation (COV) paid by permanent residents have been the same as the median COV nationwide for the last two quarters.

# Cases of PRs paying high COV are the exception. Of 37,205 resale transactions in 2009, 58 cases had COV exceeding $70,000. Of this, only eight (14 per cent) involved PRs.

MYTH: Private property owners push up prices.

HIS RESPONSE:

# Their number is not large enough to push up prices. Of the 58 resale transactions last year with COV exceeding $70,000, only 11 cases (19 per cent) involved private property owners.

MYTH: Subletting of HDB flats is rampant.

HIS RESPONSE:

# Of the 682,000 flats that have fulfilled current Minimum Occupation Period requirements, only 3 per cent are sublet. This suggests most flat owners are buying their flats for occupation, and not rental.

Source: Straits Times, 6 Mar 2010

To prevent foreign enclaves from forming in HDB estates, the Housing and Development Board (HDB) will introduce a new quota for permanent resident (PR) families buying resale flats, Mah Bow Tan, Minister for National Development said on Friday.

Mr Mah said even though PR enclaves are not a problem today, precautionary measures should be put in place early.

PRs will be subject to quotas of 5 per cent and 8 per cent at the neighbourhood and block levels respectively.

A PR family cannot buy a flat if the neighbourhood or block already has 5 per cent or 8 per cent of flats owned by other PR-PR families.

The quota will only apply to non-Malaysian PRs. Malaysians are excluded, because of Singapore’s close historical and cultural links.

In 2009, PRs make up 14 per cent of Singapore’s resident population. But PR families own only 5 per cent of HDB flats.

Source: Business Times, 5 Mar 2010