Friday, April 10, 2009

Relook eligibility criteria for renting out HDB flats

PRICES of HDB resale flats have been high for some time and there are no clear signs of them falling, despite the poor economy.

One reason for these high prices is that HDB flats are rented out. Many people, especially young couples, apply for flats with the sole intention of renting them out.

The idea is simple. Convert illiquid Central Provident Fund savings to liquid cash. Most of the time, the rental income is not only undeclared, but is also used to finance a lifestyle people could not otherwise afford. This includes cars, maids, overseas holidays and frivolous purchases of branded goods.

The underlying philosophy of HDB is to make basic housing available to all Singaporeans at a subsidised price. When people abuse this privilege, many genuine buyers, whose sole intention is to put a roof over their heads, are priced out.

People who want to rent out their properties should look at private properties, where prices reflect supply and demand. Otherwise, this is akin to misuse of public funds.

Other than allowing retirees to rent out their flats and rooms, I see no reason to allow rental of HDB flats.

HDB should relook its rules on eligibility to rent out its flats, and come down hard on those who make illegal and undeclared income from doing so without approval.

Ng Kwong Yee

Source: Straits Times, 10 Apr 2009

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