New HDB Team to Help Rental-Flat Owners Buy Their Homes

HDB now has a dedicated team to help families in rental-flats. The aim is to help 1,000 of these families own their flats, by 2023 or 2024. Here is what’s in store:

New Home Ownership Support Team (HST) to help families in rental units

The HST consists of five to seven members, and will be set up in the later half of 2019. Senior Parliamentary Secretary for National Development, Sun Xueling, says HDB has learned it’s important to have someone to consult, and provide a human touch for tenants.

The new team will help tenants through the flat-buying process, and provide budgeting advice. It will also ensure tenants are on track to collect the keys for their flat.

The team will also provide more consistent and holistic aid – at present, families in rental-flats are only visited or consulted on an ad-hoc basis. The new approach is a more interventionist, hand-holding approach, where families have close guidance each step of the way.

Promoting home ownership for stability

The new initiative is part of an overall drive to maintaining home ownership rates. The intent to give families in rental flats an asset instead, as cash used to pay rent is little more than a continued depletion of their savings.

Singapore’s overall standpoint has always been that, for locals, rental should only be temporary for tenants who can work.

Between 2012 to 2018, around 3,500 families have upgraded from rental-flats to becoming home buyers. This is an average of about 600 families per year. Also, 74 families joined the Fresh Start Housing Scheme last month – this is for second-timer families, who are looking to move from a rental unit to their own flat for the second time. About five of the families who joined last month have already collected their house keys.

However, HDB acknowledges that home ownership may not be an immediate priority for some families in rental-flat situations. Other factors, such as family conflicts, will have to be resolved before they can consider buying a flat.

For these families, the Ministry of Social and Family Development will be setting up social service hubs near rental flats. The Ministry aims to help stabilise these families, before HDB can step in to assist them in home ownership.

Will it be a big help to these families?

It helps that these families have access to expert advice; in fact we’re sure any average Singaporean would appreciate closer guidance. But what we’ve always felt would be more useful is a tweak to the HDB loan rates – rather than being fixed at 0.1 per cent above the prevailing CPF rate for everyone, we could instead peg it to each home owner’s income.

A 2.6 per cent HDB loan is affordable to most Singaporeans. But for lower income families, such as those living in rental flats, every dollar counts. There’s no point for them to spend all their CPF on paying off a home loan, only to have too little to retire on afterward. A different, lower interest rate should apply; at least to lower income families.

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