Any potential measure to reduce EIP’s economic impact should apply to all races

Cheryl Chiew27 Jul 2021

HDB flats in Ghim Moh

With more HDB flat sellers from minority groups coming forward to appeal the EIP, the Ministry of National Development is carefully studying the situation.

More flat sellers from the minority races have appealed the Ethnic Integration Policy (EIP), which caps the proportion of flats that can be owned by households of each ethnic group within an HDB block and neighbourhood, said the Ministry of National Development (MND) in Parliament on Monday (26 July).

This comes as Chinese buyers form a bigger proportion of the market; hence, the impact on non-Chinese sellers is larger once the Chinese EIP limits are reached.

With a smaller pool of eligible buyers, affected sellers may have to cut their asking price or face a longer time to dispose of their flat.

The ministry, however, said that it is difficult to size the exact impact of the EIP on financial outcomes.

“The selling price of a flat could be affected by many factors, including the location, storey height, and the physical condition of the flat,” it said.

“Timing also matters, as market sentiments change over time.”

Moreover, the price of a flat at the point of acquisition also depends on multiple factors.

“If a flat had been purchased on the resale market and was affected by the EIP limits at the point of purchase, the current seller could have bought the flat at a lower price, a positive financial impact from the EIP at that point,” it explained.

The financial gains vary for every transaction, “for reasons other than and even due to the EIP”.

With this, the ministry reiterated that it is carefully studying the situation, including what more can be done to help affected sellers.

It revealed that it will consider the suggestions put forward by some Members of Parliament (MPs) in their review. 

Notably, several MPs had suggested various measures to reduce the economic impact of the EIP on minorities. These include introducing a discount on fixed resale levy payable by non-Chinese sellers and providing additional subsidies to attract potential buyers of a particular race.

MND, however, underscored that any potential measure should apply to all races and be targeted at addressing EIP’s unintended effects.

“For example, it might not be appropriate to tie the resale levy to the EIP as they serve different policy objectives. The resale levy is intended to reduce the size of the second housing subsidy from HDB, and hence applies to those who buy a second subsidised flat from HDB,” it said.

“Not all EIP-constrained flat sellers will buy a second subsidised flat and be liable for a resale levy in the first place.”

Looking ahead, it assured that HDB will continue to exercise flexibility for EIP-constrained sellers on a case-by-case basis.

“We will keep working to smoothen the rough edges of the policy, and seek Singaporeans’ continued support for the EIP and the vital role it plays in fostering racial harmony and understanding,” said MND.

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Cheryl Chiew, Digital Content Specialist at PropertyGuru, edited this story. To contact her about this story, email: 


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