{"id":123358,"date":"2021-11-22T00:29:28","date_gmt":"2021-11-21T17:29:28","guid":{"rendered":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/analysts-divided-on-whether-6-subsidy-clawback-for-rochor-flats-is-adequate\/"},"modified":"2021-11-22T09:03:10","modified_gmt":"2021-11-22T02:03:10","slug":"analysts-divided-on-whether-6-subsidy-clawback-for-rochor-flats-is-adequate","status":"publish","type":"post","link":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/analysts-divided-on-whether-6-subsidy-clawback-for-rochor-flats-is-adequate\/","title":{"rendered":"Analysts divided on whether 6% subsidy clawback for Rochor flats is adequate"},"content":{"rendered":"


\nWhen\u00a0River Peaks I & II flats go onto the resale market for the first time, future residents of the Nov 2021 BTO launch will have to pay a 6% of the resale price or the unit\u2019s valuation, whichever is higher. Source: HDB
\nProperty analysts are divided on whether the 6% subsidy clawback imposed on the resale of flats at an upcoming Rochor Build-to-Order (BTO) project, which is the first housing project under the new Prime Land Housing (PLH) model, reported Channel News Asia (CNA).
\nSome of the analysts believe the 6% subsidy recovery is \u201creasonable\u201d, while others say it is not high enough.
\nThe Housing and Development Board (HDB) on Wednesday (17 November) announced that the clawback percentage \u2013 which is a much-anticipated detail in the PLH model \u2013 would apply to an upcoming project in Rochor.
\nThis means owners of upcoming flats in such a project would have to pay 6% of the resale price or the unit\u2019s valuation, whichever is higher, to HDB once they sell their flats.
\nThe clawback was introduced to address concerns on additional subsidies which could lead to \u201cexcessive windfall gains\u201d. It will only apply to the first resale of the flats.
\nSet to be completed in 2028, the Rochor project forms part of the Housing Board\u2019s BTO exercise for this month.
\nExcluding conventional housing grants, units at this project are priced from $409,000 for three-room flats and $582,000 for four-room flats. The 960-unit project only features three- and four-room units.
\nOrangeTee & Tie Senior Vice-President of Research Christine Sun described the 6% recovery rate as reasonable, considering that prices of HDB resale flats have increased across the board over the last decade.\u00a0
\nIn fact, prices have risen 9.1% year-to-date.
\nWith the flats expected to enter the open market by around 2038, following a longer construction period as well as a minimum occupation period (MOP) of 10 years, Sun sees a high possibility for such flats to achieve over 6% price growth in 17 years.
\nBreaking down the 6% recovery rate, she pointed that a four-room PLH flat sold for $1.2 million in the future would have a clawback amount of around $72,000.
\n\u201cThe owner will still be able to enjoy a gross profit of at least $500,000,\u201d she said as quoted by CNA.
\nShe added that the percentage \u201ccannot be too high as the buyers face more stringent selling criteria and longer MOP, when compared to other BTO owners\u201d.
\nPropNex CEO Ismail Gafoor said the 6% recovery rate is \u201ca modest sum considering the benefits arising from the location and the potential capital appreciation that the flats stand to gain\u201d. Nonetheless, he feels that it is adequate.
\nHowever, not all analysts agree. ERA Realty Head of Research and Consultancy Nicholas Mak believes the percentage \u201cseems a bit on the low side\u201d.
\nAlthough the subsidy recovery has no direct equivalent in the private property market, Mak noted that the closest tax would be the Seller\u2019s Stamp Duty, which ranges from 4% to 12%, intended to deter speculative buying.
\nWith this, he had expected the authorities to set the recovery rate at a \u201cmid-point\u201d at around 8%.
\nMak added that while the subsidy recovery may deflate the \u201clottery effect\u201d of PLH flats, estimates, however, showed that the buyers of such flats \u201ccan still stand to make significant profit from their flats in the future\u201d.
\nMeanwhile, Huttons Research Head Lee Sze Teck said it is \u201cdifficult to say whether the clawback is fair\u201d given the absence of precedents.
\n\u201cWe need to know how much the additional subsidy is. If it\u2019s a six-figure amount, and the clawback is only 6%, then we can make that judgment, but right now \u2026 one part of the equation is opaque,\u201d he added as quoted by CNA.
\nLast month, authorities said the subsidy recovery rate would \u201creflect the extent of additional subsidies provided at launch\u201d, adding that the same rate would apply regardless of when the owner resold the flat in the future.
\nNational Development Minister Desmond Lee has also said the percentage rate may be adjusted for other future projects, depending on the subsidies needed and the market conditions.
\nLooking for a property in Singapore? Visit PropertyGuru\u2019s\u00a0Listings,\u00a0Project Reviews\u00a0and\u00a0Guides.
\nCheryl Chiew, Digital Content Specialist at PropertyGuru, edited this story. To contact her about this story, email:\u00a0cheryl@propertyguru.com.sg.\u00a0
\n
\nSource : proppertyguru.com.sg\/Property Market
\nRead more…Analysts divided on whether 6% subsidy clawback for Rochor flats is adequate<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

When\u00a0River Peaks I & II flats go onto the resale market for the first time,...<\/p>\n","protected":false},"author":1,"featured_media":123359,"comment_status":"false","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"spay_email":"","footnotes":"","jetpack_publicize_message":"","jetpack_is_tweetstorm":false,"jetpack_publicize_feature_enabled":true},"categories":[1],"tags":[],"class_list":["post-123358","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-property-news"],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/www.siamlandbank.com\/propertynews\/wp-content\/uploads\/2021\/11\/NOV-2021-HDB-BTO-ROCHOR-RIVER-PEAKS.jpg?fit=820%2C410&ssl=1","jetpack_publicize_connections":[],"jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p75ss1-w5E","jetpack-related-posts":[{"id":122853,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/first-bto-project-under-new-prime-housing-model-to-be-built-in-rochor\/","url_meta":{"origin":123358,"position":0},"title":"First BTO project under new prime housing model to be built in Rochor","date":"October 27, 2021","format":false,"excerpt":"\r The Rochor BTO project will have 960 units of\u00a0three-room and four-room flats, and 40 units of two-room rental flats. 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