SDP Proposes Non-Open Market Flats to Address HDB’s 99-Year Lease Crisis

Non-Open Market, or NOM, flats that do not include land costs in their price should be introduced into the public housing system in Singapore.

This idea was raised at the SDP’s launch of its housing policy Housing A Nation: Holistic Policies For Affordable Homes. Party Vice-Chairman, Mr John Tan, and Treasurer Mr Bryan Lim presented the landmark policy paper this afternoon.

Such a scheme would resolve the problem over the depreciating value of HDB flats due to the 99-year lease of the land.

National Development Minister Lawrence Wong caused a stir in 2017 when he said that “As the leases run down, especially towards the tail-end, the flat prices will come down correspondingly.”

Singaporeans have expressed much concern over the matter as many hope to sell their flats at a profit that they can use for retirement.

“But depreciating values, especially of ageing flats, mean that owners cannot depend on their flats as a nest-egg,” Mr John Tan said during the launch. “The problem is compounded by the fact many Singaporeans have depleted their CPF savings to pay for their flats.”

The NOM scheme will price new HDB flats to include administrative, material, labour costs only but without land “cost” that is currently the practice.

As a result, prices of flats will be substantially lower, ranging from $70,000 for 2-room flats to $240,000 for 5-room flats or even less.

“As the name implies, however, flats bought under this scheme will not be allowed to be re-sold in the open market,” co-presenter Mr Bryan Lim said.

Owners wishing to dispose of their NOM flats will have to sell them back to the HDB, he added.

Singaporeans who purchase these flats can expect to take 9 to 15 years to pay off their housing loans (based on an interest rate of 3 percent) using no more than 20 percent of their gross income.

This further reduces the financial burden of home-buyers many of whom currently service their loans on a 30-year basis.

The lowered housing expenditure will free up capital for homeowners to save for their retirement.

The rationale for NOM flats, Mr Lim pointed out, is that the government should not profit from Singaporeans when it comes to public housing and Singaporeans should not use it as a means of investment for capital gain.

Public housing is a social good and should be used to meet the housing needs of the population, not profit-making for the government or citizens.

Current homeowners

Existing HDB owners can continue to sell their flats in the open market (OM). Of course, they are subjected to the vagaries of the prevailing market.

However, those who wish to take advantage of the NOM scheme can convert the status of their existing flats.

In such a case, the government will return the difference between the original price of their flats (as purchased from the HDB) and price of an equivalent NOM flat subject to a cap. This money will be credited back to the owner’s CPF account or used to pay any outstanding housing loan that one may have taken.

The converted flats will then be subjected to rules governing NOM flats.

The NOM scheme essentially gives Singaporeans an added option of buying a home at a greatly reduced price. First-time HDB buyers can choose to buy an OM or NOM flat.

Ensuring a stable housing market

The NOM system will be introduced in a gradual manner to prevent a shock to the existing system and a sudden market correction.

This will provide stability to the OM prices while making NOM flats affordable for those who want it. The market correction of prices will take place in a gradual and measured way that will not cause financial distress to current homeowners.

Other policy initiatives presented by the SDP include:

1. Implementing the Young Families Priority Scheme (YFPS), a targeted priority scheme that grants balloting priority for first-timer families with children or couples who are expectant for Balance Flats or new Built-To-Order Flats in non-mature estates.

2. Increasing the inclusiveness of public housing by enabling single-parent families with children as well as singles to purchase and own their flats. The SDP plan will also increase the range of lower-income Singaporeans for housing rental.

3. Enhancing the Lease Buy-Back Scheme to more effectively assist needy senior citizens to have a secure retirement.

4. Barring Permanent Residents and non-citizens from buying or renting NOM flats.

Collectively, these SDP policies can contribute towards resolving some of the major problems affecting public housing in Singapore today and ensuring that our public housing system is compassionate and inclusive.

To read the full policy paper Housing A Nation: Holistic Policies For Affordable Homes, click here.

 

Singapore Democrats

 

 

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14 Responses to “SDP Proposes Non-Open Market Flats to Address HDB’s 99-Year Lease Crisis”

  • SDP should keep quiet:

    SDP should quiet and not to give ideas to those idiots who are highly paid but dun know how to work. They have been stealing your ideas and knowledge. Let the 70% supporters suffer under their bashing. You will not still be voted in and win the election. This is because locals are very self-centered and stupid! They are waiting for a solution from SDP. For heavens’ sake stop giving solutions to problems they created.

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  • RDB:

    Haven’t the peeing and pooing farty been bragging all these decades that they know best. And their late leekaryew got his relative gct to implement his darn policies on his behalf. So now their long tails have been shortened to a stump.

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  • LIONS:

    GOOD SUGGESTION,I SUPPORT!

    in addition,may i oso suggest the state builds RETIREMENT VILLAGES TO ACCOMMODATE THE INCREASED AGEING POPULACE.
    Such villages can also operate on NOM units n be sold at very affordable prices so that older sgs,jobless or retired,can sell their current houses and buy such RETIREMENT HOMES.
    may i oso propose such units be non-transferable and once the occupants,either couples or singles,pass away,the unit will be returned to HDB/GOVT.

    SUCH VILLAGES CAN BE OPERATED WITH LARGE SCALE ECONOMY with clinics,pyhsio centres,R N R FACILITIES,minimarts,pharmacy etc and be marked GST-FREE to help our nation-builders live out more economically their remaining years.

    one good example would be to link a RETIREMENT VILLAGE TO SENGKANG GEN HOSPITAL,for instance,and it could be located at CONEY ISLAND?

    WELL,I HOPE THE SDP WINS BIG AND LEAD SG INTO THE FUTURE.
    THAT WAY,i am assured sgs will be properly taken care of.

    as for GREEDY PAPigs,waitLOONG,lOONG…till the cows come home.

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  • LIONS:

    KEEP CALM AND VOTE SDP.
    its way better than getting Pee And Pee.

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  • Vote SDP for a fairer future:

    this format should have been so from the beginning.. but they got greedy and went about ‘the huge profits way’ !
    hdb peasants became the big losers!

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  • Alamak!:

    Ho Jinx: Alamak! You want to cut my gambling chips by more than half with the stroke of a pen? How can?

    I oredi lost so many billions. We need more land sales to replenish my lost chips. Must double my bets to win them back.

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  • never voted pap:

    there is never any doubt pap shall be toppled, one day.

    the question is when. never never.

    like Qing dynasty peasants, although extremely kiasi and kiasu, they toppled Qing dynasty when the then naysayers were all saying, impossible.

    when did Qing dynasrt peasants turn against Qing empress? when she tried to squeeze more blood from Qing peasant stones.

    so the same here with 70% sheep. until 70% sheep feels no more blood to give to pap, they ain’t going to change.

    the natural move is, let the 70% sheep suffer more. after all, they shall suffer, since they do NOT belong to the S$m clan and so most of them do NOT have the S$ to withstand all the money sucking moves by pap.

    the 70% sheep who probably can withstand a little longer is the small shopkeeper, the small hawker stall holder, the small one man operator mechanic technician. even then, as soon as the limit is reached, they shall revolt.

    pap clown and wife and S$m clan of parleeement approved thieves shall be indicted. make no mistake. they are guilty and shall face the music. we hope it is GE2019. if not, ffff the 70% sheep.

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  • Of course not:

    the more PAP copy SDP, the more credible SDP becomes. The more people see SDP policy becomes PAP policy, the more people will know that SDP can take over from PAP.

    People will have no problem with a SDP government, after all even PAP is not doing anything differently from SDP.

    SDP should keep quiet:
    SDP should quiet and not to give ideas to those idiots who are highly paid but dun know how to work. They have been stealing your ideas and knowledge.

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  • Harder Truths:

    OWNERSHIP – this is the basis for everything – without that nothing else will be resolved.

    If there is no ownership then what happens to all the money invested? Gone? Why? Where? No answers? If you ask you may get arrested for fake news?

    The real questions never get answered because we all know where the money goes and the whole thing is a stinking scam.

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  • Regime change is the problem:

    SDP should keep quiet:
    SDP should quiet and not to give ideas to those idiots who are highly paid but dun know how to work. They have been stealing your ideas and knowledge. Let the 70% supporters suffer under their bashing. You will not still be voted in and win the election. This is because locals are very self-centered and stupid! They are waiting for a solution from SDP. For heavens’ sake stop giving solutions to problems they created.

    No, you are wrong. SDP should come up with even more good ideas even if PAP copies them. Why? It proves that SDP is better than PAP. Also, PAP cannot really brag about it because they just copied it.

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  • Regime change is the problem:

    LIONS:
    KEEP CALM AND VOTE SDP.
    its way better than getting Pee And Pee.

    Also, tell your family members and friends to do the same.

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  • KNN:

    This was the policy until 1980 when PAPies became greedy. And then sinkies also kena infected by the greed virus.

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  • guru:

    Wonderful!. GOOD IDEAS. Wee are with you SDP

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  • Change We Must:

    Very good idea, at least Singaporean have an option whether they want an expensive flat or a simple shelter. Bear in mind that HDB flat is not an asset, so choose wisely.

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