The Singapore Democratic Party (SDP) is proposing a new class of public housing, referred to as ‘non-open market’ (NOM) flats which could fetch prices of as low as S$70,000, The Straits Times reported.
Introduced in a housing policy paper, flats will be priced by the Housing and Development Board (HDB) to recover construction and administrative costs. Buyers will not need to pay for the land.
SDP estimates that these flats could be priced at S$70,000 for a two-room unit, going up to S$240,000 for a five-roomer. At such prices, a family would be able to pay off a nine- to 15-year loan with not more than 20 percent of their gross monthly income.
Currently, the 30-year loan for a five-room unit at an average price of S$380,000 can be paid off using about 25 percent of a median monthly household income of S$5,600, SDP noted.
Moreover, NOM flats can be sold back to the housing board with zero capital gains.
However, flats on the open market will still be built and their selling price will include the land cost. Unlike the proposed flats, open market units will enjoy capital gains and after the five-year moratorium period, can be sold on the open market.
SDP said that NOM flats would be introduced slowly so that it will not affect the current market. Existing flat owners will also be given the option to convert their homes into such units. In turn, they will receive cash and CPF reimbursements from the HDB.
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