Adjusting Minimum Occupation Periods for New and Resale Flats to Release More Housing Supply to Market
Ministry of National DevelopmentSpeakers
Summary
This question concerns the suggestion by Mr Vikram Nair to reduce the Minimum Occupation Period (MOP) for flats to address housing supply shortages and BTO construction delays. Minister for National Development Desmond Lee stated that MOP safeguards HDB flats for long-term owner-occupation and deters speculative flipping, which helps maintain affordability. He explained that reducing MOP would not significantly increase net supply because sellers would still require alternative housing, potentially driving up resale prices through increased demand. Instead, Minister for National Development Desmond Lee highlighted that HDB will launch about 17,000 BTO flats in 2021 and plans to exceed this supply in 2022. The Ministry will continue to monitor the market and calibrate public housing supply to ensure it stays responsive to the population’s housing needs.
Transcript
51 Mr Vikram Nair asked the Minister for National Development given the current delays in the completion of several HDB BTO projects and the related crunch on public housing supply, whether the Ministry will consider reducing the minimum occupation periods for new and resale flats in order to provide more housing supply in the market.
Mr Desmond Lee: HDB flats are meant for long-term owner occupation. The minimum occupation period, or MOP, for new and resale HDB flats ensures that flat buyers purchase HDB flats with the intent of living in the flat, instead of quickly reselling the flats for profit. This safeguards HDB flats for households with genuine housing needs and deters speculative purchases, thereby helping to keep HDB flats affordable.
While reducing the MOP may temporarily increase the number of flats available on the resale market, it is unlikely to significantly increase the overall housing supply as flat sellers will need alternative housing and will add to the demand for resale flats. It would also compromise the intent of the MOP and could encourage short-term, speculative churning of HDB flats. This would then result in buyers paying higher prices for resale flats.
To ensure that flat supply remains responsive to the housing needs of our population, we will continue to monitor the market and demand situation and calibrate the supply of public housing accordingly. HDB remains on track to launch about 17,000 BTO flats in 2021 and we plan for next year’s BTO supply to exceed this. This year’s supply is already higher than the 14,600 and 16,800 flats launched in 2019 and 2020 respectively. Given the current strong housing demand, we will continue on this trajectory going forward to ensure that housing supply keeps up with demand. We will announce more details when ready.