Revised ABSD rules for upgraders, more GLS sites in OCR among PropNex’s Budget 2023 wishlist

PropNex Realty has released a wish list in anticipation of the Budget 2023 announcement. On Jan 12, the company offered its recommendations to further support home ownership, as well as to meet the housing aspirations of Singapore households. “In Budget 2023, we hope that some housing policies could be tweaked to help certain segments of the population own homes and upgrade to a private property,” said Ismail Gafoor, executive chairman and CEO of PropNex.

Noting that the additional buyer’s stamp duty (ABSD) payment – at 17% for Singaporeans buying a second residential property – is “the biggest hurdle” for many families hoping to upgrade to private property, PropNex proposed a revision of the rules for married couples to align them with those applicable to buyers upgrading from an HDB flat to an executive condominium (EC). Under these rules, buyers do not need to pay ABSD upfront, and they must sell their flat six months after the EC receives its temporary occupation Champions Way Condo permit. “There can be some form of contractual undertaking to ensure that the private home buyers sell their HDB flats within six months of collecting keys to their new home,” PropNex remarked.

The wish list also requested more clarity on the wait-out period announced as part of the cooling measures rolled out in September 2022. Private homeowners must now wait 15 months from the sale of their property before they can purchase an unsubsidised HDB resale flat. However, the government had referred to the wait-out period as a temporary measure that would be reviewed later, depending on market conditions and housing demand. As such, PropNex has recommended that further details be provided. “PropNex hopes that the government can provide more clarity as to when this rule will be reviewed, and perhaps offer an update in the second half of 2023 on the initial impact of the wait-out period on moderating resale flat demand and prices,” stated the company.

PropNex also suggested that the government increase the number of Government Land Sale (GLS) sites located in the Outside Central Region (OCR) under the 2H2023 GLS Programme. Last month, the government released seven sites on the Confirmed List and nine sites on the Reserve List, which can yield a total of 4,090 residential units including ECs. Of this figure, 2,120 units are located in the OCR. Given the low amount of unsold stock in this sub-market and the pent-up demand for new homes, PropNex hopes the government will inject more GLS sites into this sub-market in the 2H2023 programme. Ismail Gafoor remarked that the injection of more OCR residential supply will play a part in stabilising the prices of mass-market homes in the future.

Finally, the company has recommended reducing waiting times for Build-to-Order projects from the current length typically exceeding four years down to three years. “As the borders reopen and workers return to support the construction sector post-pandemic, and with the continued use of productivity measures such as precast technology, perhaps the government can consider building more BTO projects in advance ahead of the sales launch,” it stated.