IMPACT OF ANTI-CASHBACK MEASURES ON HDB RESALE MARKET

Abstract

This study focused on the illegal cashback arrangement which have been rampaging in the Housing & Development Board (HDB) resale market. On 1st April 2005, government announced a series of anti-cashback measures to curb such activities. In this study, the author studies the impact of anti-cashback measures on the HDB resale market at the macro and micro level. The author found that the sellers and buyers are willing to engage in such an illegal activities because of the extra cash allowed for them to renovate their new flat. The study found that the bank does not owe a duty of care to the client in such an arrangement as the bank approves the loan based on the valuation report of the valuers. The valuers will owe a duty of care to a third party and will be charged for tort (act of negligence) if found guilty of not having due diligence. The buyer and seller are fully responsible for an illegal cashback arrangement and no recourse is allowed. Results from the analysis show that prices, values and volume of HDB properties transactions have not been affected significantly by the anti-cashback measures. In addition, the average valuation of the HDB resale market did not fluctuate as what was reported in the newspaper. The author found that the implementation of anti-cashback measures has instilled a degree of fear to the buyers and sellers.