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."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.
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."