HDB revises application rules for flats

HDB revises application rules for flats

Move to weed out less serious buyers and give genuine ones better chances

 

By LYNETTE KHOO

 

(SINGAPORE) In a move to deter less serious buyers from jamming the queue for build-to-order (BTO) projects, the Housing Development Board (HDB) has refined the application process for them.

 

The tweaking came in response to the recent oversubscription for new flats which did not translate to actual bookings as some applicants walked away from flat selection when their turn was due.

 

HDB director of estate administration and property Yap Chin Beng noted that this created the false impression that there was overwhelming demand and HDB flats were running out – causing anxiety among home buyers.

 

The new changes, which will take effect from the May BTO exercise, are intended to encourage applicants to consider their options carefully before hopping onto an HDB sale exercise.

 

First-timer applicants who reject two chances to select a flat will have their priority position suspended for a one-year period in HDB’s sales exercises.

 

This means they will be treated like second-timer applicants – with only one chance in the ballot instead of two and vying for just 10 per cent of the public flat supply. If they are applying under the Married Child Priority Scheme, they will have only two chances, like second-timers, instead of four.

 

To give first-timer applicants a greater chance of securing BTO units, additional chances – limited to non-mature estates – will also be accorded to those who had been unsuccessful twice instead of the current practice of giving additional chances only after the fifth try. There will be no additional chance accorded if they participate in the balloting exercise or quarterly/half-yearly sales exercise where supply of flats is limited.

 

Mr Yap noted that this trend of applicants rejecting their chance to select flats has been compounded since the second half of last year, when the surge in cash-over-valuation for resale flats priced out potential buyers, who flocked to the BTO scheme for its low barrier to entry.

 

This led to a four to five times oversubscription in some cases, especially for BTO projects in mature estates where supply is limited. But despite the high number of BTO applications, a review at the recent BTO exercises showed a significant number of applicants tried repeatedly but did not select a unit when given the chance at successive sales exercises.

 

In the last four BTO exercises between last September and November where selection has been completed, about 50-70 per cent of the applicants did not select a flat. At Coral Spring, for instance, some 30 per cent of the 698 four-room units were not selected after all the applicants had been called up for selection.

 

HDB said it has considered other options, including the proposal to raise the current administration fee of $10 and reverting to the queue system. The fee hike was not adopted after public feedback, saying it would penalise genuine buyers and HDB could be seen as profiteering. The previous queue system itself, also has the flipside of overbuilding based on queue length.

 

Property agencies applauded HDB’s decision to revise its BTO application process.

 

‘This programme is trying to make first-timers more serious about booking their flats,’ said ERA assistant vice-president Eugene Lim. ‘It’s addressing a very targeted group of people who are abusing the system.’

 

PropNex chief executive Mohamed Ismail said that the new moves would be a strong deterrent for people who do not take the purchase of new flats seriously.

 

Both of them do not think that the poor actual take-up in BTO homes signal weakness in the public housing demand.

 

‘Public housing is expected to continue to do well this year,’ Mr Ismail said. ‘Even the take-up rate is expected to be strong particularly now that the supply of unsold flats has already dried up.’

 

Yesterday, HDB launched two new BTO housing projects in Punggol and Sengkang comprising a total of 1,485 premium 4- to 5-room flats. Including these two projects, the total BTO supply planned for this year will be about 8,400 units, which will surpass the total 6,000 BTO units launched in the whole of 2007.

 

The housing board said that flat buyers can look forward to more BTO projects from June to December this year in towns such as Punggol, Sengkang, Bukit Panjang and Woodlands.

 

Source: Business Times

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