With the backlog of first-time buyers of HDB flats largely cleared, Singapore’s Minister for National Development Khaw Boon Wan has set his sights on helping second-timers get their homes faster in the new year.
Experts said this could be in the form of increasing the percentage of Build-To-Order (BTO) flats allocated to second-timers currently set at five per cent.
2011 has been about answering the needs of first-time HDB buyers.
From ramping up supply to 25,000 units, to building ahead of demand, Mr Khaw made it clear that helping newly weds get their first home was his top priority.
Government Parliamentary Committee for National Development Deputy Chairman Liang Eng Hwa said: “I think we have seen the worst of this housing imbalances and I think now the minister can then focus on other home buyers, for example the second-time home buyers, and the other aspiring home buyers.
“I think since (Mr Khaw) came on board, they have moved at a very fast pace and come up with many launches.”
PropNex CEO Mohd Ismail said: “As of the last BTO, the average overall subscription for the 4,200 units that was available was less than two times.
“So this is a very clear signal that the government’s initiative and the move of increasing the BTO flats is showing some results, that lesser number of people are disappointed and also the other tweak of releasing at one go many houses.”
The sense of relief by the minister is palpable.
While his earlier blog posts expressed frustration and contained “health alerts” about the housing market, Mr Khaw’s latest entry spoke about his Christmas wish coming true – having a more manageable application rate.
The housing board plans to release another 25,000 BTO flats in 2012 — well above the 15,000 first marriages among Singaporeans.
This means there will also be more scope to help second-timers.
Market watchers say it’s about time.
Dennis Wee Group director Chris Koh said: “In the past, most upgraders or second timers would not even go near BTO flats because of the stigma of having to pay the levy.
“In those old days, you would recall that levies were a percentage of the sale price, so selling a five-room flat or executive flat whereby the levies are at one time close to 25 per cent.
“But since 2006, when they adjusted the resale levies, the levies are now a fixed figure, ranging from S$30,000 to S$45,000. So to one, I guess he must have thought, instead of paying a premium for a resale flat, which is an old flat, he doesn’t mind lining up for a second flat, a brand new BTO, and pay the government that S$30,000 to S$45,000 levy.”
Mr Ismail said: “Some of them will have bought a (house directly) before and that would have been more than eight years ago – because it takes three years to construct and five years’ minimum occupation period.
In eight years, when they selected a house compared to today, a lot of things would have changed.
“They may have got something based on their then-income, within their affordability, a three-room flat. And today, they may be with two children, and as well as the family shifting in or parents staying together and that doesn’t suit their need.”
The BTO exercise in November saw the housing board separating the application rate for first- and second-timers to better reflect the demands of each group.
While the application rate for first-timers was below two, second timers faced keen competition, with 26 applicants for each flat offered.
Experts said the government can afford to tweak the allocation weightage.
First-time home owners will and should continue to be the main target group for BTO flats which are sold at a subsidised rate and aimed at helping newly weds settle down in their first homes.
But experts said the time is right for the needs of second-timers to be addressed.
They said increasing the allocation of BTO flats to this group from the current five per cent to 10 or 20 per cent would cater to their needs, but not at the expense of first-timers.
Source : Channel NewsAsia – 26 Dec 2011