News: Should new policies be introduced to curb the ‘lottery effect’ of Greater Southern Waterfront flats?

Aug 22, 2019

Experts believe the “lottery effect” of public housing at the Greater Southern Waterfront (GSW) could be mitigated by measures such as longer minimum occupancy periods (MOP) and shorter leases.

Prime Minister Lee Hsien Loong announced in his National Day Rally speech plans to build 9,000 public and private homes on the site of Keppel Club as part of the mega waterfront development.

Stretching 30km along the southern coastline, the GSW is set to become part of the central business district (CBD), featuring commercial, residential and recreational components.

In 2016, National Development Minister Lawrence Wong said the government wants to preserve HDB living within the CBD since it is mindful of the rich-poor divide.

However, the government would explore ways to tighten resale conditions for said units, he explained then.

“The main purpose of the exciting range of HDB flats is that the fruits of the prime Greater Southern Waterfront will be for everyone – not just for the super wealthy,” said property analyst Ong Kah Seng.

“If it is purely private and residential and commercial use… it wouldn’t be ideal because it will edge out HDB dwellers or owners from having a chance to live in the Greater Southern Waterfront, an upmarket place.”

The “lottery effect” was brought under the limelight after Pinnacle@Duxton’s launch in 2004, reported CNA.

The development received overwhelming response for the 1,848 units, with prices ranging from $343,100 to $451,500 for the five-room units then.

Some of the five-room units at Pinnacle were sold for more than $1 million, after the five year MOP, with one snapped for $1.12 million in 2016 – the highest resale price for an HDB flat at the time.

With this, property experts offered ideas on how the government could dampen the “lottery effect” of GSW flats.

“The government may have to introduce new policies that will deter speculative activities, such as the resale restrictions through longer MOPs, higher resale levies, and sale rights,” said Associate Professor Sing Tien Foo, director of the NUS Institute of Real Estate.

Cushman & Wakefield research head Christine Li also suggested selling the flats at a 60- or 30-year lease, instead of 99 years.

“When the leases are shorter, there is limited capital upside and will deter investors from purchasing these flats.”

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Fiona Ho, Digital Content Manager at PropertyGuru, edited this story. To contact her about this or other stories, email fiona@propertyguru.com.sg

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