By Kenny Chee

THE Housing Board will be releasing, "in a couple of months", results of a review of housing rules to determine if any of them allow speculation in HDB flats, said National Development Minister Mah Bow Tan on Wednesday.

The review could result in the tightening of rules to prevent Singaporeans from buying an HDB flat only to sell it later to make money or to rent it out, without actually living in it.

Depending on factors like flat type, owners cannot sell or rent out their flat until they have lived in it for up to seven and five years respectively.

Mr Mah said that he did not know the extent of speculation, but said it is worth looking into because "anecdotally, you do hear of one or two cases, so we have to make sure this is not happening".

Speaking to reporters on the sidelines of the International Housing Conference, which ends today, Mr Mah said HDB flats are primarily for owner occupation, and not speculation or rental investment.

He said: "I want to make sure (speculation) is not inflating the market artificially."

He asked the HDB to step up enforcement, too, so that "people don't flout the rules and get away with it".

HDB statistics last week showed that resale-flat prices rose by 3.9 per cent in the final three months of last year to take the full-year increase to 8.2 per cent.

The median cash-over-valuation (COV) paid for resale HDB flats also doubled in the last quarter from $12,000 in the third quarter last year. COV is the cash paid over and above the valuation of a flat.

Prices of new HDB flats are set at a discount from the market prices of nearby resale flats.

On concerns over new-flat prices rising as resale-flat prices grow on the back of a booming economy, Mr Mah said that wages would also be high in such a scenario.

He said that it should not be assumed that flat prices would go up continuously, adding that a year ago, the median COV was almost zero.

Nevertheless, Mr Mah assured Singaporeans that when HDB prices its flats, it always takes into account the incomes of the people applying for flats.

He added that HDB flats were well within the means of most Singaporeans, as eight out of 10 do not pay cash to service their mortgage loans, but use funds from their Central Provident Fund contributions.

kennyc@sph.com.sg

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