By Janice Heng, The Straits Times, 17 Jan 2014
QUOTAS have been placed on the proportion of public flats which can be rented out to foreigners and permanent residents (PRs).
These caps were announced yesterday by the HDB, a month after Minister for National Development Khaw Boon Wan said they were in the works.
The quotas are "to prevent the formation of foreigner enclaves in HDB estates, and maintain the Singaporean character of our HDB heartland", said the Housing Board.
Malaysians, however, are exempt as they "can better integrate" because of their close links with Singaporeans.
The quotas apply to whole flats only, and will not affect those who sublet rooms.
This is to reduce the impact on those who rely on subletting income, "especially the elderly and low-income households".
Less than 4 per cent of flats across Singapore are wholly rented out to foreigners. But the figure can rise to as high as 9 per cent in some areas, and 18 per cent in certain blocks.
As of last month, about 1 per cent of neighbourhoods and blocks had reached the quotas, the HDB told The Straits Times.
These affected areas contained 1,840 sublet units - 270 of which were in excess of the quotas - in towns such as Central, Clementi, Jurong West, Queenstown and Sengkang.
But existing tenants will not be affected immediately.
Flat owners who are now subletting their flats can continue doing so, for the remaining rental period which was approved by the HDB.
Although a small number of flats are directly affected now, Century21 chief executive officer Ku Swee Yong believes the quotas will still bite in the long run, especially in neighbourhoods where many foreigners work, such as around Changi General Hospital or business parks like Fusionopolis in Buona Vista.
Although a small number of flats are directly affected now, Century21 chief executive officer Ku Swee Yong believes the quotas will still bite in the long run, especially in neighbourhoods where many foreigners work, such as around Changi General Hospital or business parks like Fusionopolis in Buona Vista.
"For certain neighbourhoods, the quotas will be very difficult to comply with," he said.
A new e-service on the HDB's website will allow people to check whether a unit can be sublet to Singaporeans and Malaysians only, or to other non-citizens too. The information, to be updated on the first day of each month, will be valid for the whole month.
'Rents may drop' with foreign tenant quotas
Agents say this will result from rush to secure tenants before caps are hit
By Janice Heng And Rachel Au-yong, The Straits Times, 18 Jan 2014
Agents say this will result from rush to secure tenants before caps are hit
By Janice Heng And Rachel Au-yong, The Straits Times, 18 Jan 2014
RENTS in areas popular with foreigners could fall significantly because of new quotas which cap how many public flats can be sublet to non-citizens, according to property agents.
"If your price is too high, then others who are renting out might get in there first," said Dennis Wee Realty's Mr Jimmy Chua, pointing out that landlords may scramble to secure tenants before the quotas are reached by cutting rents.
On Thursday, it was announced that no more than 11 per cent of units in any single block can be rented out to foreigners to prevent enclaves forming. The limit is 8 per cent for each Housing Board (HDB) neighbourhood.
Only 1 per cent of such neighbourhoods and blocks have so far hit the caps. These areas are in central, Jurong West, Queenstown, Sengkang and Clementi, where rents are some of the highest among Singapore's neighbourhoods. According to Singapore
Real Estate Exchange figures last month, median rents ranged from $2,600 in Jurong West - the highest rent after Bishan - to $2,350 in Sengkang. The lowest was Clementi at $2,300, equal to the islandwide average.
Property agents put the higher rents down in part to the demand from foreigners.
According to Mr Chua, Clementi, an area he focuses on, is popular with IT professionals from India who work nearby.
Vestor Realty agent Florence Tiong said most of her rental clients in Clementi range from foreign nurses and engineers to students from the National University of Singapore. "It will be quite hard to get tenants once the quota is hit," she said.
Dennis Wee Realty agent Chris Tan expects rents to drop even in areas below the caps. But more worrying is what happens when the quotas do bite. "The demand from the market will drop a lot. It's quite a big issue for us because most of the demand in Jurong is from foreigners."
In three years focusing on Jurong, he has had only three Singaporean clients renting HDB flats.
And Vestor Realty agent Henry Tan worries that central towns, such as Toa Payoh and Ang Mo Kio, will eventually reach the quota limits too.
PropNex chief executive officer Mohamed Ismail Gafoor estimates rents may fall by 10 to 15 per cent in areas which have reached their quotas. Century21 chief executive officer Ku Swee Yong meanwhile expects a 5 to 10 per cent drop in affected areas.
Once caps are reached, foreigners may turn to other neighbourhoods or to private property, "especially older apartments which tend to have lower rents than new condominiums", said R'ST Research director Ong Kah Seng.
But those who want to stay in the same area may still do so as the quota applies only to the rental of an entire flat.
Said Mr Ong: "As subletting of spare rooms is not affected by this rule, it will mean more foreigners will eventually 'split up' to rent rooms, instead of jointly renting an entire flat."
Said Mr Ong: "As subletting of spare rooms is not affected by this rule, it will mean more foreigners will eventually 'split up' to rent rooms, instead of jointly renting an entire flat."
* Market largely unaffected by subletting caps
Only about 1% of HDB areas have reached foreign tenant quota limits
By Janice Heng, The Straits Times, 16 Jun 2014
Only about 1% of HDB areas have reached foreign tenant quota limits
By Janice Heng, The Straits Times, 16 Jun 2014
SIX months after the start of quotas on subletting public flats to foreigners, the fear that they would hurt the rental market does not seem to have come true.
As of June, only about 1 per cent of Housing Board neighbourhoods and blocks have reached the quota limits, the HDB told The Straits Times.
This is about the same proportion initially affected when the quota kicked in this January.
Since then, only 8 per cent of the flats in a neighbourhood or 11 per cent of the flats in a block can be wholly sublet to permanent residents or foreigners. This does not apply to subletting of rooms.
HDB said the measure "is to prevent the formation of foreigner enclaves in HDB estates, and maintain the Singaporean character of our HDB heartland".
Malaysians, however, are exempt from this restriction because of their cultural similarities.
Agents said the overall rental market has been cool, but is largely unaffected by the change.
More than 46,000 HDB flats have approval to be rented out wholly.
HDB rental prices fell from August, edging up in February and March but sliding thereafter. The median monthly rent for HDB flats was $2,300 last month.
"(The change) hasn't really affected things much," said Prop-Nex agent Calvin Ng, who has rented out several flats in the west since then. "So far, the cases I've handled are still within the quota."
Dennis Wee Realty agent Aaron Lin said the bigger challenges in the rental market are the stricter foreign labour policy and excess supply of flats for rent.
He has come up against the quota only near MRT stations in the west, such as Clementi.
Property agents who focus on such plum areas - near MRT stations in the western part of Singapore - such as Dennis Wee Realty agent Jimmy Chua, have been hit. "Most of the blocks that are more popular near the MRT are affected," he said.
He added that many flat-hunters are foreign students or fresh graduates from the nearby universities, some of whom had to settle for "second-choice" units.
Century21 chief executive officer Ku Swee Yong expects the quotas to bite in Jurong East, where two hospitals - with more than 4,000 health-care workers - will be completed in the next 12 months.
SLP Realty agent Jordan Lim, who specialises in renting, has shifted his focus away from Clementi as a result of the change.
The quotas are not an issue in areas such as the east, he said.
But landlords such as Mr James Tan, who is in his 40s, do not have that option. Since February, his flat in West Coast Road has been subject to the quota and can be sublet only to Singaporeans or Malaysians. But no such prospective tenants have contacted him.
"I'm totally unable to rent out my flat. I just have to wait and check every month," he said.
The quota information, available on the HDB's website, is updated on the first of every month and is valid for the whole month.
The quota information, available on the HDB's website, is updated on the first of every month and is valid for the whole month.
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