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HDB to buy back flats from owners who face ‘genuine difficulties’ selling due to ethnic quotas

HDB to buy back flats from owners who face ‘genuine difficulties’ selling due to ethnic quotas

HDB flats in Singapore. (Photo: CNA/Gaya Chandramohan)

SINGAPORE: Flat owners constrained by the Ethnic Integration Policy (EIP) who face “genuine difficulties” selling their homes will be able to sell them back to the Housing and Development Board (HDB) at “a fair price”, said authorities on Tuesday (Mar 8).

Under the EIP, introduced in 1989, quotas are set for flats owned by each racial group in an HDB block or neighbourhood to avoid concentrations of any ethnic group.

When a limit is reached, there can be no further sale of flats to the affected group, unless the seller and buyer are from the same ethnic group.

Speaking in Parliament, National Development Minister Desmond Lee reiterated the importance of the policy, while noting that some owners may face difficulties selling their flats with these limits.

Current assistance includes giving them more time to sell their flat, or waiving the EIP limits in “exceptional circumstances”. But it would not be sustainable to keep doing so as it would "erode the very objectives the EIP seeks to achieve", he said.

After studying various ideas, including giving grants to households who have to sell their flats at significantly lower prices, he said the "most feasible" option would be to buy back the flats.

"This is not a decision that we make lightly, because it requires significant government resources. But we believe it is the right thing to do, because the EIP benefits all of us, and helps to foster a more cohesive society," Mr Lee added.


From Mar 8, HDB will buy back flats from eligible EIP-constrained flat owners who are unable to sell their homes at a reasonable price.

This includes owners who bought their flats from HDB and the resale market, regardless of whether the flat was EIP-constrained at the time of purchase.

Requests will be assessed on a case-by-case basis, considering criteria such as whether they have fulfilled the Minimum Occupation Period and owned the flat for at least 10 years, said HDB and the Ministry of National Development.

Owners should also have made “regular genuine attempts over a continuous period to sell the flat at a reasonable asking price while constrained by one or more EIP limits”.

This period should be comparable to the time taken by most owners to sell their flats – and in HDB’s experience, six months is presently sufficient for this, said the release. But the authorities noted this may change depending on market conditions.

To set a “reasonable asking price”, sellers can take reference from recent transaction prices for flats located within 200m of theirs, and make adjustments to account for attributes such as storey height and orientation.

In addition, owners should keep monthly records of their marketing attempts throughout this period and submit them to HDB when seeking assistance. These records include online or print property listings detailing the asking price and listing date, and records of flat viewings.

“EIP-constrained flat owners who do not fulfil these criteria, but who face extenuating circumstances, may seek special consideration from HDB,” said the release.


For owners who are assessed to be eligible, HDB will appoint a professional licensed valuer to value their flat.

The valuer will then make their assessment based on “established valuation principles”.

“HDB will then determine the buyback price and make an offer for the flat at a fair price,” said the authorities.

Flat owners have up to three months to decide if they want to accept the buyback offer. If they reject it, they will not be eligible for the assistance for 12 months after the offer lapses.

The flats bought back by HDB will become part of its housing stock and be offered for public sale again through the Sale of Balance Flats exercises or open booking.

“As with all flats sold through these modes, HDB will apply a significant subsidy to the assessed market value of the flat to determine the sale price,” they added.

After that, a household’s eligibility to book the flat will depend on the prevailing ethnic proportions in the block and neighbourhood when they are invited to select a flat.

Source: CNA/cl(cy/gs)


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