Additional BTO ballot chance for 'prioritised first-timers' a fairer move than reserving more flats for them: Analysts

SINGAPORE — It is better to give Built-to-Order (BTO) flat applicants who are "prioritised first-timers" another ballot chance rather than allocating more units in such public housing developments to them, property analysts said.

This is because the size of this group of applicants may not be very big and the demography of those who apply for BTO flats under the Housing and Development Board (HDB) may differ across precincts, the analysts added.

They spoke to TODAY on Wednesday (Feb 15), in response to the greater support for such applicants that was announced in Budget 2023 the previous day.

Families with children as well as married couples aged 40 and below looking to secure their first home will receive more support in the form of an extra ballot chance for their BTO flat applications, Deputy Prime Minister Lawrence Wong said on Tuesday.

Right now, first-timers receive two ballot chances when vying for a queue number to choose a BTO flat, whereas second-time applicants get one ballot chance. The new sub-category of first-timers comprising families with children and young married couples aged 40 and below will thus have three ballot chances.  

Making these announcements during his Budget speech, Mr Wong, who is also Finance Minister, said that this added support is intended to help such families and couples get their first home “in a timely manner”.

Responding to this change, property analysts said that it is "relevant" for the targeted group.

Mr Wong noted that the "first-timer" category covered a wide range of applicants such as people who already have their own homes, but have not received housing subsidies before. 

Therefore, more support should be given to specific groups such as first-timer families with children as well as young married couples.

Echoing Mr Wong's sentiments, Dr Tan Tee Khoon, the Singapore country manager at property website PropertyGuru, said: "Given this wide range of first-time applicants and the current tightness in the BTO flat supply, specific groups such as families with children and young married couples aged 40 and below are being further prioritised."

In August last year, the Government announced that it would increase the ratio of flats in BTO launches for first-timer families.

In particular, at least 85 per cent of the three-room BTO flat supply and 95 per cent of the four-room and larger flat supply in non-mature estates will be set aside for them. 

Asked if setting aside a specific ratio of BTO flats for "prioritised first-timers" would be a better way of supporting these families, the property analysts said no. 

Ms Christine Sun, senior vice-president of research & analytics at OrangeTee & Tie, said that the feasibility of such a policy will depend on the number of people in that demographic group. 

"I suspect that the number of families with children or couples by the age of 40 who have not bought a flat may not be too big," she said. 

Mr Lee Sze Teck, senior director of research at property agency Huttons Asia, said that it is difficult to allocate a percentage of BTO flats for this sub-group of first-timer applicants because their numbers will vary from one BTO sales exercise to another. 

"In a BTO exercise, there may be more applications for flats in a location and less for another," he said. "It is more straightforward to give (them) more (ballot) chances."

TOO MANY PEOPLE GIVEN PRIORITY? 

Before Tuesday's announcement of the extra ballot for prioritised first-timers, HDB already has a gamut of priority schemes to enhance the chances for eligible persons who ballot for BTO flats.

Other than priority for first-timers, there are also some of the following:

• Third Child Priority Scheme, which helps families with more than two children get an extra ballot chance
• Multi-Generation Priority Scheme, which allows parents and their married children to make a joint application for two flats in certain BTO projects
• Senior Priority Scheme, which helps eligible seniors looking to secure a two-room flexi flat improve their chances of doing so

Mr Lee of Huttons Asia said that although the aim of each scheme is to ensure that the target group has a higher chance of securing a flat, this inevitably comes at a cost to other groups. 

"A policy change will benefit one group and may disadvantage another," he added.

"Singles may want to buy a BTO flat and hope to get one faster... However, this time, the policy is geared towards helping first-timers." 

That said, the Budget did provide more grants to people looking to buy resale HDB flats, so that singles are not overlooked completely, he noted.

Mr Wong said in his speech on Tuesday that the existing Central Provident Fund Housing Grant will also be increased by up to S$30,000 for people looking to buy a resale flat as their first home. This will also apply to singles, who could see this grant being topped up by up to S$15,000 depending on the size of their unit. 

Dr Tan from PropertyGuru said that the added ballot chances for prioritised first-timer BTO applicants do not necessarily mean that others have a lower chance of getting a flat.

"The extra ballot chances would work in tandem with existing priority schemes as these (schemes) have not been set aside." 

This means that the new priority schemes do not replace the existing ones. 

Agreeing, Ms Sun from Orange Tee & Tie said that the intention of the new measure is likely to give priority to people who need to get flats the most. 

“Therefore, those with more urgent needs are now given more chances of balloting.”