HDB to review flat conversion scheme after concerns raised over Telok Blangah resale listing

SINGAPORE: The Housing and Development Board (HDB) said on Friday (Sep 25) that it is reviewing its Conversion Scheme after receiving public feedback on the recent resale listing of a combined flat in Telok Blangah.

The flat with a remaining lease of 91 years was created by merging two adjoining three-room units at Block 93B Telok Blangah Street 31.

Its initial resale listing on the PropertyGuru website for S$2.18 million (US$1.7 million), alongside a marketing video posted on Sep 19, has sparked public discussion over the pricing of such "jumbo" flats. 

In response to CNA's queries, HDB noted that it had received concerns from members of the public over the flat listing.

"The government remains committed to keeping public housing affordable and accessible," it said, adding that it will do a review of the scheme. 

The Telok Blangah flat's remaining lease period has also raised questions online whether the Minimum Occupation Period (MOP) for the initial units had been completed before they were combined.

HDB said that the flat owners purchased the first 3-room flat from HDB in December 2017. 

"They subsequently decided to purchase the adjoining unit in August 2021, when their neighbour had put it up for sale after obtaining HDB’s approval to sell the flat during the MOP due to the family’s circumstances," it added. 

HDB said that the listing price of S$2.18 million was "significantly higher than what comparable transactions in the area would suggest". 

According to the public housing authority, transactions for individual comparable 3-room flats have ranged from around S$673,000 to S$771,000 over the past six months.

Based on the upper end of this range, the total price of two such flats would amount to around S$1.54 million, it said. 

HDB added that the S$2.18 million price tag was over 40 per cent or more than S$600,000 above the estimated value of two similar three-room flats.

"Should a transaction proceed at this price on a willing buyer-willing seller basis, it will likely entail a substantial Cash-Over-Valuation, which must be paid fully in cash upfront," it said. 

As of Friday, HDB said it has not received a resale application for the flat, which has a floor area of 1,465 sq ft.

Checks by CNA on Friday showed its listing price on PropertyGuru had dipped to about S$2 million. 

HDB advised prospective buyers to do thorough research, evaluate their housing options carefully and plan their finances prudently so they do not end up over-paying.

"We urge buyers to refer to resale transaction data on HDB InfoWEB and available housing options on the HDB Flat Portal," it added.

CNA has contacted PropNex, whose agent is marketing the unit, for more information on the listing.

CONVERSION SCHEME

Introduced in 1993, the Conversion Scheme provides an avenue for flat owners facing space constraints. 

Under it, eligible owners may purchase an adjoining 3-room or smaller flat on the open market, subject to prevailing citizenship and household nucleus requirements. 

They must also seek HDB’s assessment on the structural feasibility of combining the units before submitting their purchase application. 

If approved, they can proceed to complete the purchase and combine the two units into a single flat under one lease. 

The combined flat can subsequently be sold on the open market after meeting the new MOP.