Monday, July 28, 2008
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In Mar 2005, HDB again reduced the minimum occupation period (MOP) for subletting of whole flat from 15 years to 10 years for all HDB flat owners even if they have an outstanding HDB loan; and from 10 years to 5 years for owners without an outstanding HDB loan. The relaxation is aimed at giving flat owners greater flexibility to monetise their flat. It will also enlarge the rental market for HDB flats and provide more rental housing options for those who are not ready to buy a property yet. With this relaxation, about 537,000 flats can potentially be sublet.
In 2007, when the influx of foreign workers began to cause an acute shortage in housing, HDB again relaxed the sublet policy. HDB flat owners can now sublet their whole flats after meeting the Minimum Occupation Period of 5 years for flats bought from HDB or 3 years for flats bought from the open market.
With each sublet policy relaxation, more and more HDB flats were made available for subletting; yet the HDB rental demand remains strong. While rental growth in private property has started to moderate, HDB flat sublets continue to see eye-popping increase in rental yield. In effect, the HDB rental market has taken away a substantial number of would-be tenants for private properties. This has effectively depreciated the rental value of private properties for private property investors making them a lot less attractive than in the 90s.
May also want to read:
History of Singapore Property 1960 to 2008
Buy or Not Buy: How to decide amid mixed market signals
When to Buy, When Not to by
Property Price Index Graph Plotter & Online Property Valuation
Your Property Investment Determines Your Financial Success in Your Life
HDB Resales: West Sees Highest Price Increase
HDB Sublet Of Whole HDB Flats has appreciated HDB flat value & depreciated value of Mass Market Private Properties esp. Condos
In the 1990s, the rental market was largely exclusive to the private property market, mainly private condos. Proud condo owners could fetch as much as 10% rental yield during those prime years. But today, this has changed dramatically with the entry of the HDB flats into the rental market.HDB Sublet of Whole HDB Flats effected on Jan 1 2003
Prior to this, the subletting of whole HDB flats was generally not allowed, except under certain circumstances, e.g. when the lessees are working or studying abroad. Starting from 1 Jan 2003, owners of all HDB flats who have occupied their flats for 15 years or more will be able to sublet their whole flat provided the flat owners have no outstanding loan from HDB. This is relaxed further in the later part of the year to include flat owners who have an outstanding loan from HDB provided they've occupied the flats for more than 15 years, and for HDB flat owners who do not have an outstanding HDB loan, they can sublet their whole flat after occupying it for at least 10 years. Those with an outstanding HDB loan can qualify by either fully redeeming their loan or refinancing their loan with the banks.In Mar 2005, HDB again reduced the minimum occupation period (MOP) for subletting of whole flat from 15 years to 10 years for all HDB flat owners even if they have an outstanding HDB loan; and from 10 years to 5 years for owners without an outstanding HDB loan. The relaxation is aimed at giving flat owners greater flexibility to monetise their flat. It will also enlarge the rental market for HDB flats and provide more rental housing options for those who are not ready to buy a property yet. With this relaxation, about 537,000 flats can potentially be sublet.
In 2007, when the influx of foreign workers began to cause an acute shortage in housing, HDB again relaxed the sublet policy. HDB flat owners can now sublet their whole flats after meeting the Minimum Occupation Period of 5 years for flats bought from HDB or 3 years for flats bought from the open market.
With each sublet policy relaxation, more and more HDB flats were made available for subletting; yet the HDB rental demand remains strong. While rental growth in private property has started to moderate, HDB flat sublets continue to see eye-popping increase in rental yield. In effect, the HDB rental market has taken away a substantial number of would-be tenants for private properties. This has effectively depreciated the rental value of private properties for private property investors making them a lot less attractive than in the 90s.
May also want to read:
History of Singapore Property 1960 to 2008
Buy or Not Buy: How to decide amid mixed market signals
When to Buy, When Not to by
Property Price Index Graph Plotter & Online Property Valuation
Your Property Investment Determines Your Financial Success in Your Life
HDB Resales: West Sees Highest Price Increase
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The blogger here has been affectionately named by close allies as "Smart Buyer" but really, he's not smart. Smart Buyer just believes that being prudent is smart. That's the essence of the message of this blog and Smart Buyer hopes it'll benefit other property buyers.
Smart Buyer :)