More turn to sub-letting HDB flats
SINGAPORE: Some were in financial hardship, and an increasing
number were Singaporeans working overseas or who simply saw their
flats as investments.
They made up the growing number of households that are
sub—letting their entire flats — a figure that jumped 21 per cent
in the course of the last financial year.
Between April last year and March this year, the Housing and
Development Board (HDB) approved 22,754 such applications, or 4,019
units more than in the previous year.
Despite the recent recession, this trend is not necessarily due
to flat—owners having problems meeting their mortgage repayments,
said property analysts.
"The downturn happened in the middle of HDB’s financial year,
toward the end of last year. And while some households may have
been affected, it’s not enough to say they contributed to the
increase — it’s a variety of factors," said Ngee Ann Polytechnic
real estate lecturer Nicholas Mak.
One of which is more Singaporeans heading overseas for work.
Property agent Liz Choo told MediaCorp that the number of such
flat—owners approaching her to sub—let their flats has gone up by
as much as 20 per cent from six years ago.
They are mostly headed to China and Vietnam, "followed by
Australia and the United Kingdom", she added.
Depending on the location, rents for a three—room flat range
from $1,500 to $1,800, while four—room, five—room and executive
maisonettes can command $1,800 to $2,500 a month. A five—room flat
in the central area could fetch $3,000, said property agents.
The relaxation of public housing policy in March 2007 sparked
the first increase in the number of Singaporeans sub—letting their
housing board flats.
Home owners can now rent out their entire flats after living in
it for three years, if the flat was bought without a housing grant
from the resale market; or five years if the flat was bought from
the HDB or the open market with a CPF Housing Grant.
Previously, they had to wait 10 years if they had an outstanding
HDB loan or five years if they did not.
"It used to be a lot tougher in the past, you could only let out
your flat if you were studying or working overseas and you must
have documentary proof, or if you’re very sick and need to live
with your relative — there were so many conditions attached," said
property agent of 15 years, Mr G Rajan.
HDB relaxed its policy to allow flat owners greater flexibility
to monetise their flats during retirement or times of financial
difficulty, and also to enlarge the rental market for HDB
flats.
And some, it seems, have taken advantage of the situation. "I’ve
a client who, after living in his flat for seven years, moved into
his newly completed condo and is now renting out his flat," said Mr
Daniel Lim, a property agent. Other agents also told MediaCorp the
HDB flat is increasingly seen as an investment.
Still, there are some who sub—let because they cannot afford the
repayments.
Finance graduate Ms Sumathi (not her real name) told MediaCorp
she has been unemployed for three years since returning from her
studies in Australia. Her three—room flat in Serangoon, which she
bought with her father, is being rented out for $1,500.
"Though we took an HDB loan, I couldn’t afford to pay $404
monthly," she said. The 35—year—old is staying with a friend. Her
father, who works overseas, does not earn enough to pay the
mortgage. "The income from the rental helps, but I have to pay
property tax and conservancy charges, too," she added.
— TODAY/so