It sparked discussion and panic among existing HDB property owners thinking that HDB might totally curb COV and buy back their HDB at valuation.
Subsequently Mr Khaw issued another statement to address more depth on the related measure under consideration. The content stated that the "no resale in the open market" proposal was simply one of the suggested restrictions on possible new housing options that are cheaper than today's BTO.
Although this new measure has not been officially released, I am writing this post to analyse the possible impacts of this measure.
Likely, HDB will separate this class of cheaper BTO from the existing batches of BTO. The target class will probably be young couples with limited combined income resources. How much cheaper would these BTO be from the existing BTO?
Well, probably the officials might launch these BTO cheaper at a rate of the average resale COV in the market.
The reason is because upon fulfillment of MOP, these properties can only be resold back to HDB at valuation pricing without COV. Therefore it might only seem fair that there is this trade off.
With this clear segregation, a new entity will be created which is clearly separated from the Resale Market and not impacting the Resale Market. And by creating this entity, HDB might also instill lower tenures tagged to the housing so that initial pricing can be pushed down even lower, say 60 years instead of the normal 99 years.
Bottomline, the reason for this new class of housing is to help young couples who are priced out of the market to at least purchase a new house comfortably and build their family. Buyers should not come in with a mentality on profit after MOP as I seriously do not think its worthwhile with all the restrictions built in.
