HDB revises flat application rules

The Housing & Development Board (HDB) has revised the application process for its Build-to-Order (BTO) and Balloting Exercise (BE) modes of sale to address recent increases in non-selection of new HDB flats. The changes will take effect from the May 2008 BTO exercise.

Under the revision, first-timer applicants who reject two chances to select a flat will have their first-timer priorities removed for a one-year period in HDB’s sales exercises.

This means that they will be treated like second-timer applicants, and will no longer be able to ballot for the 90% of publicly available flats which HDB safeguards for first-timers. They will also not be eligible for the Married Child Priority Scheme which gives them two additional tries.

Additional chances for repeatedly unsuccessful first-timers – that is those not invited to select a flat – will be limited to only BTO exercises in non-mature estates. No additional chance will be accorded if they participate in the BE or the Quarterly/Half-Yearly Sales Exercise, where the supply of flats is limited.

The additional chances will be accorded to first-timer applicants who had been unsuccessful twice (that is, starting from the third try), instead of the existing practice where additional chances are only given starting from the fifth try.

HDB said the above measures will encourage applicants to consider their options carefully before participating in an HDB sale exercise. The measures will also help to minimize non-selection of HDB flats by applicants who repeatedly participate in sales exercises and thus divert HDB’s time and resources from those with urgent housing needs.

Recent launches of Build-to-Order flats have seen an overwhelming number of applications, especially those in mature estates, leading to speculation that there is a shortage of new flats. But HDB said, on the contrary, the bulk of applicants often do not end up making a purchase.

The recent Coral Spring project, for instance, saw about 30% of flats not taken up even after all applicants had been invited to book a flat.

HDB said in the last four Build-to-Order exercises, about 50 to 70 percent of applicants rejected their chance to book a flat, citing reasons like location and cost. However, HDB said such information was readily available to applicants when the projects were first announced.

It said it had considered other options – such as raising the administration fee and reverting to the old queue system. However, these measures are not necessarily effective deterrents, and in the case of the latter, may in fact lead to an over-supply.

Reactions to the changes were mixed, with most first-timers cheering the increased priority.

“For a first-time buyer, to get a flat is very important. For second-time buyers, maybe they already have a flat… but (for first-time buyers like us), we are just starting to build a family, so we should have more priority,” said a flat applicant.

For those who have rejected the allocated flats, some said the HDB should consider such applicants on a case-by-case basis.

Eric Chong, a first-time flat buyer, said: “There must be a reason why people want to reject, because they might not like a second-floor flat, or other reasons. I must purchase the one that I like most, because it’s a big investment.”

The new rules kick in with HDB’s latest BTO projects – Compassvale Pearl in Sengkang, and Punggol Sapphire. These will add another 1,485 new flats to the market.

Including upcoming projects in Punggol, Sengkang, Woodlands and Bukit Panjang, to be launched in the second half of this year, the total planned supply for 2008 is 8,000 flats. The number is more than the 6,000 in 2007 and 2,400 in 2006. – CNA/ir

Source : Channel NewsAsia – 22 May 2008

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