HDB Dwellers Concurrently Owning Private Residential and Commercial Properties
Ministry of National DevelopmentSpeakers
Summary
This question concerns Mr Gan Thiam Poh’s inquiry into the number of HDB dwellers owning private properties, their loan obligations, and potential restrictions on those still servicing HDB housing loans. Minister for National Development Lawrence Wong reported that approximately 54,300 HDB households concurrently own private properties, mostly residential, and about 7,100 of these households are currently servicing HDB loans. The Minister detailed existing safeguards against over-leveraging, such as tighter loan-to-value limits, higher cash downpayments, and the Additional Buyer’s Stamp Duty for those purchasing additional private residential units. Additionally, the Total Debt Servicing Ratio framework is applied to ensure that a borrower’s total monthly debt repayment obligations do not exceed 60% of their monthly income. Minister for National Development Lawrence Wong affirmed that the Ministry will continue monitoring the market and reviewing these measures to ensure financial prudence remains a priority.
Transcript
25 Mr Gan Thiam Poh asked the Minister for National Development (a) how many current HDB dwellers concurrently own one and more than one private property respectively with a breakdown into residential and commercial private properties; (b) of these HDB dwellers, how many of them are servicing both the HDB housing loan and private bank loans; and (c) whether the Ministry will consider allowing only those who have completed paying the HDB housing loan fully to invest in private residential properties.
Mr Lawrence Wong: As at 30 April 2017, about 54,300 Housing and Development Board (HDB) households, or less than 6% of all HDB households, concurrently own private properties. Of these, the vast majority (about 80%) own only one private property. By property type, close to 80% of these households own just residential properties, while the remainder own commercial properties (such as shop houses, hawker stalls and warehouse spaces) or a combination of both.
Among HDB households which concurrently own private properties, about 7,100, or 13%, are servicing their HDB housing loans. HDB does not have data on whether these households have outstanding bank loans on their private properties.
Nonetheless, there are existing measures to safeguard financial prudence and prevent individuals from over-leveraging when they purchase properties. For instance, an individual with an outstanding HDB loan will be subject to a higher cash downpayment and a tighter loan-to-value limit when he borrows to purchase a private residential property. Additional Buyer’s Stamp Duty will also apply to his second and subsequent property purchases. In addition, he will be subject to the Total Debt Servicing Ratio framework, which requires a financial institution to take into consideration his total outstanding debt obligations when assessing his loan application. This ensures that the borrower’s total monthly debt repayment obligations do not exceed 60% of his monthly income.
We will continue monitoring the market closely and will review the necessary measures as conditions evolve.