HDB revises application rules for flats

http://www.businesstimes.com.sg/sub/...80373,00.html?

Published May 23, 2008

BUILD-TO-ORDER PROJECTS

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.

http://www.straitstimes.com/Prime%2B...ry_240023.html

May 23, 2008

HDB targets frivolous applicants

First-timers who reject two offers to buy a flat lose priority status for a year

By Jessica Cheam


THINK hard before you apply to buy a new Housing Board flat: Lodging frivolous applications will now get you sent to the back of the queue.

New HDB rules unveiled yesterday target flighty first-time buyers who have been hedging their bets by applying for flats when they often have no intention of closing the deal.

The HDB said the move 'will encourage applicants to consider their options carefully'. It also addresses concerns that the thousands of applications that pour in for HDB projects bear little relation to the actual take-up rate.

Look at Punggol Lodge, launched in October. There were 464 four-roomers on offer, attracting 1,484 applications, but when offers went out, 1,069 'buyers' eventually said no thanks.

And when 60 three-room flats were offered in November's launch of Segar Meadows in Bukit Panjang, 98 per cent of first-timers - those who applied to purchase a flat for the very first time - who were offered a flat, rejected the chance to buy.

The HDB hears all sorts of excuses. Some applicants said they wanted to also consider flats under other HDB sales or that the unit they really wanted had already been selected. Others indicated that they weren't cashed up.

The demand for new flats shot up last year after young couples, who were priced out of the resale market, tried for new HDB homes, which are often cheaper.

The rush - and problem with frivolous applicants - prompted National Development Minister Mah Bow Tan to call for a review of the rules last month.

The new rules, which apply immediately, have a 'two strikes and you're out' approach. A first-time buyer who rejects an offer to buy a flat twice or more at any HDB sales exercise, loses his first-timer priorities for a year. That effectively puts him at the back of the queue with the second-timers.

First-timers get two chances in a ballot. If they live near their parents, they get two more, under the Married Child Priority Scheme.

Last August, the HDB also began setting aside 90 per cent of the flats in a sales exercise for first-timers. The rest were earmarked for second-timers.

These are the first-time privileges a person could lose for a year if they get too picky.

But the HDB is also helping genuine first-timers who repeatedly miss out in ballots. If you apply twice and miss chances to buy, you can have another shot on your third try and your name goes into the ballot once more. For your fourth try, you get entered two more times, and so on.

This applies only to build-to-order projects in newer estates like Punggol. The old rules gave first-timers extra chances only on the fifth try, but at all estates.

First-time hopefuls like administrative officer Chen Xiuling, 26, said the new rules would help weed out those with a 'just apply and see how' attitude.

But 26-year-old insurance agent Sarah Teo thought the 'two strikes' rule was a bit strict: 'What if both times you were left only with undesirable flats on a low floor, at bad locations?'

[email protected]

http://www.straitstimes.com/Singapor...ry_240116.html

May 23, 2008

Scrapped: Extra chances in mature estates


THE Housing Board yesterday scrapped an earlier initiative to give additional chances to unsuccessful first-time buyers looking for a flat in a mature estate.

This was part of an overhaul of HDB's application processes, which aims to discourage buyers with no genuine interest.

It was also part of the board's move to make build- to-order (BTO) flats its main source of new housing stock.

Previously, first-time buyers who were unsuccessful at securing a flat were given additional chances from their fifth try onwards in all estates.

This included popular ones in established towns such as Toa Payoh and Queenstown.

Under the new rules, a buyer gets extra chances earlier - after two unsuccessful attempts.

This means on his third try, his name goes into the ballot one more time. On his fourth try, he gets entered two more times, and so on.

But the catch is that the extra chances apply only to BTO projects in non-mature estates such as Punggol.

BTO flats typically take three years to be constructed and are built only if certain demand is reached.

HDB said yesterday that the rationale for the change was that sales exercises in mature estates are often oversubscribed.

It is 'not HDB's intention to satisfy all such demand, since the mainstay of new flat supply is BTO flats in non-mature estates', said HDB's director of estate administration and property Yap Chin Beng.

HDB's decision comes after recent reports that some first-timers could be exploiting the system to improve their chances by accelerating their failure rate, so as to enjoy a higher chance of success by the time flats in a desirable location become available.

JESSICA CHEAM

http://www.straitstimes.com/Singapor...ry_240587.html

May 24, 2008

HDB to be flexible on new rules for first-timers

It assures those at the back of queue with good reasons for rejecting flats

By Jessica Cheam


FIRST-TIME buyers can be assured that they will get to select new flats from a reasonable pool before they are sent to the back of the queue, said National Development Minister Mah Bow Tan yesterday.

And, in a separate assurance, the Housing Board said it may exercise flexibility if applicants at the back of the queue have good reasons for rejecting available flats.

The comments came after HDB changed application rules on Thursday, leaving some first-timers worried that buyers offered leftover flats by the HDB will effectively be penalised.

Speaking to reporters yesterday, Mr Mah said that for first-timers, a new home is a 'big investment, so you don't want HDB to say take it or leave it...This is also why HDB will make sure there's a reasonable number of flats for couples to select, and it's not the last flat in the whole development'.

The new rules are aimed at tightening HDB's application process to deter first-timers from applying frivolously.

A first-time buyer who rejects an offer to buy a flat twice at HDB's build-to-order or balloting sales exercises will now lose his first-timer priorities for a year.

That effectively puts him at the back of the queue with the second-timers.

HDB's move came after recent reports highlighted the relatively low take-up rate of new flats despite thousands of applications.

The problem is that more serious buyers in the queue are being pushed further back. For the HDB, a lot of time and effort is wasted on administering and managing these people, said Mr Mah.

'We're trying to move those with urgent needs to the front of the queue,' he said.

Some first-time home buyers whom The Straits Times spoke to, however, were concerned that the rules were too strict.

Technical support engineer Sharlina Mohd Sahak, 28, said it was unfair if only leftover flats were on offer or if they were in an undesirable location. 'There are pros and cons to this new rule as it sieves out insincere buyers, but overall I find it a bit harsh,' she said.

When contacted, the HDB said it expects genuine buyers to book a flat if there is still a unit available.

Even if they do not, they are given a second chance to buy before stringent measures are applied, said HDB. 'For applicants at the bottom of the queue, HDB may exercise flexibility if they have very good reasons why they did not select any of the last few available flats.'

Housing experts, such as PropNex chief executive Mohamed Ismail, said the latest changes were 'timely, given the increasing number of unsuccessful take-ups'.

But others, such as Chesterton International head(research and consultancy) Colin Tan, said there could be other reasons such as higher prices to explain higher dropout rates.

Mr Mah said there was 'no evidence' to support this argument. It was not likely, he said, because prices are publicised before buyers make their applications.

[email protected]

http://www.straitstimes.com/ST%2BFor...ry_240611.html

May 24, 2008

FINE-TUNING HDB FLAT APPLICATIONS

System should be based on preferences, not luck


I REFER to yesterday's front-page report about the refined application process for buying new Housing and Development Board (HDB) flats.

While the refinement of the balloting system is overdue, it does not address the fundamental problem. The problem is that the system is based largely on luck when it should be based on expectations or preferences.

Let me illustrate: Whenever there is a new build-to-order (BTO) project, I would check out the sales brochure, and appraise the layout of the different blocks and units, the surrounding amenities and future development of the area.

In the case of Jade @ Yishun Phase I, I had envisioned myself living in a unit on a high floor - that is, eighth floor and above - sipping a cuppa and enjoying the view of the reservoir or Yishun park.

But I was never given a chance at the ballot as my queue number exceeded twice the number of flats available. Subsequently, I was invited to select a flat from among the ones that were rejected. But all the units were on the second floor.

It is true that many applicants are choosy. But it is also a fact that the system can be fine-tuned to accommodate the genuine preferences of applicants.

After all, we are choosing a home, not a shelter.

The HDB should allow applicants to state their preferences for floor levels and block or unit numbers.

The system can then categorise applicants into groups with different balloting numbers. This is not only fairer but also more practical and accurate.

The current balloting system penalises many.

For instance, an applicant who has no preferences and whose sole desire is to obtain a flat as soon as possible, may repeatedly obtain a ballot number that puts him at the tail end. His chances of obtaining a flat anywhere will not improve appreciably despite repeated attempts.

On the other hand, another applicant who has specific preferences may fail in his objective as well. His queue number for flat selection may put him so far back that when his turn comes, he is left with flats in blocks or on floors that are not worth his while shelling out so much money for.

Tan Ai Li (Miss)