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HDB to launch 2,000 more BTO flats with shorter waiting times

SINGAPORE — Two thousand more built-to-order (BTO) flats will be launched next year with shorter waiting times, announced Minister for National Development Lawrence Wong in Parliament on Tuesday (March 6).

People looking at models of BTO flats at HDB Hub. TODAY file photo

People looking at models of BTO flats at HDB Hub. TODAY file photo

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SINGAPORE — Two thousand more built-to-order (BTO) flats will be launched next year with shorter waiting times, announced Minister for National Development Lawrence Wong in Parliament on Tuesday (March 6).

The move will be made to "help young couples with their first home", said Mr Wong. "This is why we launched BTO flats with a shorter waiting time (by bringing forward construction)."

Mr Wong also announced during the Ministry for National Development (MND)'s Committee of Supply debate that it will be exercising "some flexibility" and allow young couples to apply for their flats first, with the assessment of income for housing loans and grants deferred till just before key collection.

He said: "Buying a flat is a serious commitment. But for young couples who have considered it carefully, I think we can exercise some flexibility to support them in their marriage and parenthood journey".

This deferred assessment of income will apply from the May 2018 sales exercise onwards. More details for both announcements will be shared when ready, the MND and Housing and Development Board (HDB) said in a joint press release.

The addition of 2,000 BTO units will bring the total number of flats with a shorter waiting time to more than 3,000. In the second half of 2018, 1,100 flats will be launched for sale, spread across three projects in Sembawang, Sengkang and Yishun.

Minister Wong had said previously the shorter wait will be achieved by bringing forward construction and building ahead of BTO launches. But this will not apply across the entire housing stock, to provide "a range of BTO flats with different waiting times... so people can pick and choose," he had said.

The statement from the MND and HDB also said that couples buying their first flats will be given flexibility to allow the deferment of income assessment if they are full-time students or National Servicemen (NSF), or have recently completed their studies or National Service (NS), and are ready to settle down and buy their first flat.

The couples will be allowed "to apply for their flats first, and defer the assessment of their income for housing grants and loan till just before the key collection for their new flat," said MND and HDB. This will help reduce the time required for them to secure a new flat by at least a year, they added.

Currently, first-timer couples buying a new flat have to be continuously employed for 12 months prior to their flat application if they wish to apply for the Additional CPF Housing Grant (AHG) and/or Special CPF Housing Grant (SHG).

Prior to the implementation of this deferred assessment of income, the young couples who do not meet the 12 months income criteria would not be eligible for the AHG or SHG.

They also need to remain employed at the time of their flat application. In addition, those who intend to take up an HDB housing loan must have a valid HDB Loan Eligibility (HLE) letter when they book a flat.

The HDB's announcement was welcomed by young couples looking to buy their first flat.

Undergraduate Klinsmann Ng, 23, told TODAY that he and his girlfriend are not eligible for the AHG or the SHG as he has one more year of schooling left, while his partner has only worked for five months as an external auditor. The couple recently applied for a BTO in the Ubi area during the February exercise.

"(If we fail and have to re-apply), this will allow us to apply for the grants which will help in paying the down payments for the BTO," added Mr Ng.

Experts noted that the announcements were positive for homebuyers, but added that applicants would likely apply earlier rather than defer for too long as a lower income allows them to qualify for more housing grants.

Mr Nicholas Mak, executive director of real estate investment firm ZACD Group, said the shorter waiting times for BTO flats was "good news for the buyers".

Other experts like Mr Eugene Lim, key executive officer at ERA Realty said that the shorter waiting time will cater to a group of buyers with more urgent housing needs, and who are not too picky about the location of the flats.

Mr Colin Tan, director of research and consultancy at Suntec Real Estate Consultants said: "This should have been in force much earlier, but better late than never. Later delivery translates to higher financial burden if they want to get hitched quickly, such as facing a need to rent a home before the flat is ready."

Mr Tan felt that giving young couples applying for flats the option of deferring their income assessment was a good move. He added: "This can be a huge hurdle and may delay marriage and procreation. Let us remove any obstacles to their 'National Service' to procreate."

However, Mr Mak noted that some first-time applicants may prefer to have their income level assessed for eligibility and housing grants earlier rather than later, as households with lower income levels are generally eligible for more housing grants.

Undergraduate Gabrielle Goh and her boyfriend, who works as a financial consultant, were one of those who would not have chosen to defer declaring his income. The couple secured a BTO in Bidadari last July.

"He expected his income to increase every year, which would mean less grants for us, especially when I start working and earning money," said Ms Goh, 23. ADDITIONAL REPORTING BY LOUISA TANG

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