New limits on sale of flats to PRs

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