Oh, that elusive HDB flat

Board should do more to weed out insincere applicants

My fiancee and I are young executives who are looking for a place to live after we get married.

We have applied for a Housing and Development Board (HDB) flat under the Design, Build and Sell Scheme (DBSS) and the Build-To-Order (BTO) schemes several times, but have repeatedly drawn very high queue numbers.

The application fee of $10 should be raised to help filter out people who apply “just for fun”, as well as fence-sitters whose final decision on purchasing a flat depends on a favourable queue number.

Even though they were over-subscribed, the take-up rates for recent BTO projects in Sengkang and DBSS projects – Premiere@Tampines and City View@Boon Keng – were eventually low.

Some applicants were also turned down because their combined monthly family income exceeded the $8,000 limit.

This is precisely the point: Discounting the cash-rich, affordable public housing should be just that – affordable.

DBSS flats are far from affordable – many 4-room flats at City View@Boon Keng were priced between $500,000 to $700,000.

The HDB should step in with pricing guidelines for future DBSS and Executive Condominium (EC) projects. There also seems to be little differentiation between EC and DBSS units.

I also understand that there are plans to privatise both Premiere and City View in 10 years. Why the need to wait so long?

My fiancee and I have been eagerly anticipating the launch of the DBSS site in Simei since it was announced late last year.

The tender of land for this site was slated for last month, and from past trends for the earlier two projects, it should have taken place at the end of February. But there is still no sign of of the tender being called.

Is the HDB delaying it in view of cooling property prices?

There has been no official statement on this, but a simple explanation on the HDB website explaining the delay would be a nice gesture.

The HDB should bear in mind their objective of providing affordable, subsidised public housing and not ride on market trends like a corporate entity.

Back to the issue of the $10 application fee: Many Singaporeans are kiasu – when they read of developments being over-subscribed, they perpetuate the vicious cycle of over-subscription by “applying for fun” for every project, since the application fee is low.

It does not take a rocket scientist to figure out how much money is then collected from these fees, given the number of applications for each project.

How does the HDB justify this?

The Board should consider alternatives such as charging a $100 application fee that is fully or partially refundable upon successful booking of a unit in the development.

Another option could be an upfront application deposit of 1 per cent of the average selling price of a unit in the project.

This amount could later be converted to part of the option fee.

Such steps would help weed out non-genuine “buyers”, especially for developments in attractive locations.

Letter from Samuel Lee

Source : Today – 28 Mar 2008

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