Why condo units are shrinking

Why condo units are shrinking

Private developers are only meeting the growing demand for smaller condominium units ("Condo units shrinking: Report"; April 28).

I know of people who are holding on to their HDB flats and buying small private condo units either to rent out, or to live in while renting out their HDB units, hence turning the subsidised flats into "long-term cash cows".

As they are not selling their flats, they cannot pay a large quantum for the condo units, which leads to growing demand for "downsized" apartments.

Letting HDB flat owners rent out their units for profit, when they can afford private property, goes against the HDB's mission of providing affordable homes for the masses.

A subsidised flat that is being used to generate long-term profits is not really a home.

The HDB should relook its policies in this regard.

A flat owner who buys private property should be subjected to an income assessment.

If his income is above a certain cap set by the HDB, he should be made to sell his flat on the open market within a certain period of taking possession of the private property.

When owners have to dispose of their HDB flats upon upgrading to private property, they will have more cash and Central Provident Fund savings to purchase larger condo units, which in turn encourages developers to build them.

Another way would be to limit the timeframe that an HDB flat can be rented out, if the owner has a private property under his name and does not have a valid reason, such as being stationed overseas, for renting out the unit.

Current rules forbid a private property owner from purchasing even a resale HDB flat. The same rule should apply to HDB flat owners looking to buy private property.

This is a loophole many are exploiting, resulting in fewer resale HDB flats on the market. This deprives people who genuinely need public housing from owning such units, and encourages developers to build smaller condo units for HDB flat owners who want the best of both worlds.

Letter by Chan Suan Yen (Ms)

This article was published on May 7 in The Straits Times.

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