The price gap between HDB flats and mass market private homes has widened to a new record — making it more difficult for hopeful HDB upgraders to acquire a private home, according to Goldman Sachs’ latest report.
It added that the price difference between a five-room HDB flat and a 99-year leasehold unit in a suburban area grew to approximately S$490 psf in Q1 2011.
When translated into overall prices, a 1,200 sq ft five-room flat costs around S$600,000 less than a mass market leasehold unit.
The last recorded price gap to near this level was during the property boom in 2007.
The increasing price gap between HDB flats and private homes is becoming an “insurmountable hurdle to upgrading aspirations,” said Goldman analysts June Zhu and Paul Lian, in their report.
They also noted that the government has “little choice but to ensure more affordable housing for all through the HDB and also moderate prices of private mass-end homes.”
Ms. Zhu and Mr. Lian proposed that new cooling measures should include lower loans for home buyers with existing mortgages. Such home buyers can now borrow 60 percent of a home’s price, although this might be reduced to 50 percent.
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