Tuesday, February 15, 2011

HDB scraps scheme for siblings to buy flats

THE Government has moved quickly to scrap a scheme that allows siblings whose parents live overseas to buy HDB flats, after unhappiness surfaced online recently over how it seemed to favour permanent residents over citizens.

Senior Minister of State for National Development Grace Fu yesterday told Parliament that the Housing Board would discontinue the scheme with immediate effect as it "is no longer necessary".

It was introduced in 1990 to enable unmarried Singaporean and PR siblings to buy an HDB flat. To qualify, their parents cannot own another HDB flat and must reside overseas.

"This was necessary then because the sublet market for HDB flats and rooms was limited, and there were few viable housing options for these siblings," Ms Fu said in response to Marine Parade GRC MP Lim Biow Chuan's question.

Under the scheme, Singaporean siblings could buy a new or resale flat while PR siblings could buy only a resale flat.

Ms Fu also revealed that only about 300 such cases got the go-ahead each year. That is less than 1 per cent of total flat transactions.

But there was no longer a need for the scheme, she said, because "with the liberalisation of the subletting market for HDB flats over the years, unmarried Singaporean or PR siblings whose parents are residing overseas can now rent a room or a small flat from the open market".

The HDB first announced a review of the scheme last month, after The Straits Times sent in questions about netizens' perception that the scheme enabled unmarried PR siblings above the age of 21 to buy HDB resale flats, whereas Singapore citizen siblings could not.

The HDB later clarified that citizen siblings whose parents live abroad can also apply to buy resale flats and that all such applications will be considered on a case-by-case basis.

But now, the Government has decided to do away with that scheme altogether.

Citizens who are single and aged 35 or older can buy a resale flat under the Single Singapore Citizen Scheme. Unmarried siblings whose parents are dead can also buy flats under the Orphans Scheme.

When contacted, Forum letter writer Tony Tan Keng Hong, 33, who raised this issue previously, said he was glad that the scheme has been discontinued.

"I think it's a fair policy. HDB flats are meant for families primarily," he said.

During yesterday's Parliament sitting, National Development Minister Mah Bow Tan also fielded questions on the property cooling measures introduced last month. He said they were "pre-emptive in nature" as the Government wanted to act before a property bubble formed.

It was too early to say how effective the measures have been. The Government "will continue to monitor the property market closely", he added.

Mr Mah revealed last Sunday that the median cash-over-valuation for HDB resale transactions in January has dipped to $20,000, from $23,000 in the fourth quarter of last year.

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