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Homebuyers who reject BTO offer to face tighter curbs for a year, as HDB moves to boost chances for first-timers

SINGAPORE — In a move to reduce the rejection rates for Build-to-Order (BTO) flats, first-timer applicants who are invited to book a flat but fail to do so will have a slimmer chance of securing a different BTO flat for a year.

Homebuyers who reject BTO offer to face tighter curbs for a year, as HDB moves to boost chances for first-timers
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  • The Government will tighten rules for the non-selection of flats to bring down the rate of rejections by applicants invited by HDB to book a new flat
  • Over the past few years, about 40 per cent of applicants who were invited to book a BTO flat ended up declining the offer
  • First-timer applicants who turn down an offer from HDB to book a flat will be considered second-timer applicants for a year
  • However, HDB will waive the non-selection count for certain applicants if there are limited flats left to choose
  • A new priority category of first-timer applicants who are families with children, as well as married couples aged 40 and below, will also be introduced

SINGAPORE — In a move to reduce the rejection rates for Build-to-Order (BTO) flats, first-timer applicants who are invited to book a flat but fail to do so will have a slimmer chance of securing a different BTO flat for a year.

To kick in from the August BTO exercise this year, these applicants will be considered as second-timers when they chalk up their first "non-selection count", which are issued to applicants if they reject HDB's offer to book a flat.

For now, first-timer applicants face such a restriction if they reject HDB's offer twice, the Ministry of National Development (MND) said in a joint statement on Thursday (March 2) with the Housing and Development Board (HDB).

In addition, second-timer applicants — generally BTO flay buyers who have benefitted from HDB subsidies in the past and plan to buy another subsidised flat again — will also face tighter conditions should they turn down the invitation, MND and HDB said.

Right now, these applicants who reject HDB's offer twice will have to wait for a year to pass before they can apply for another BTO flat. From August, a single rejection will set in motion this condition.

The moves came after National Development Minister Desmond Lee said last month that the Government is looking to reduce the high rejection rate for BTO flat applications so that new flats are prioritised for those with “genuine and urgent housing needs”.

Speaking during the debate on MND's budget on Thursday, Mr Lee said that the move was to ensure that flats "go to those who need them, as quickly as possible".

HDB said that over the past few years, about 40 per cent of applicants who were invited to book a BTO flat ended up declining the offer.

Mr Lee said that there were a range of reasons that people gave when declining the offer. 

"For some, the remaining flats may be out of their budget. For others, they might be considering other housing options, or prefer flats with specific attributes. Understandably, some would rather give up the opportunity to select a flat now and wait longer for a better flat.

"But whatever the reason, such applicants do crowd out other homebuyers who may have more pressing needs." 

Tightening of non-selection rules.

He added that the Government was announcing the changes early to give everyone some time to understand how the changes may affect them.

WAIVERS FOR APPLICANTS WITH 'LIMITED CHOICES'

However, the tightened rules will not apply under certain circumstances.

MND and HDB said they recognised that there are incidences where flat applicants are left with very limited choices when they are invited to book their flats and so, they reject the invitation to book their flats.

Therefore, HDB will not issue applicants with a "non-selection count" if there are 10 or fewer BTO flats, or five or fewer Sale of Balance Flats, for applicants to choose.

Mr Lee said during the debate that HDB may also waive the non-selection count when there are extenuating circumstances, such as if applicants turn down the offer to select a flat when their circumstances have changed unexpectedly.

MND and HDB said that the new rules aim to “strike a balance between considering the interests of flat applicants with urgent housing needs, and being fair to applicants who have been successful in their flat balloting process”.

In general, second-timer applicants have a lower priority when it comes to securing a new BTO flat.

For example, first-timer applicants get at least two ballot chances when they apply for BTO flats or Sale of Balance Flats, while second-timer applicants have a single ballot chance.

A higher proportion of flat supply is also set aside for first-timer families, as compared with second-timers.

MORE FLATS ALLOCATED TO FIRST-TIMER FAMILIES

Flat supply under the Parenthood Priority Scheme, which helps first-timer married couples with children get their flats more easily, will also be expanded to include a new priority category of first-timer applicants.

Currently, the scheme is eligible for first-timer applicants who are married with at least one Singaporean child aged 18 and below, or who are expecting a child. Up to 30 per cent of the flat supply in BTO exercises, and up to half of the flat supply in Sale of Balance Flats exercises, are allocated to these applicants.

From August, a new first-timer (parents and married couples) category will be introduced to the scheme, comprising families with children and married couples aged 40 and below.

To be considered in this category of home applicants, couples must have no prior ownership or sale of residential property here, and must not have had a chance to book BTO flats or Sale of Balance Flats by HDB in the past five years.

HDB will exercise flexibility and consider allowing some people to qualify for this priority category in certain cases, such as adult children who have added themselves as co-owners to their parent's flat to help their parents pay the property loan or mortgage. 

"When they apply for a new flat and set up their own families, HDB may consider allowing them to qualify for this priority category," Mr Lee said.

The category was first announced by Deputy Prime Minister Lawrence Wong during his Budget speech last month, and constitutes about 10 per cent of all first-timer family applicants.

This means that up to 40 per cent of the public flat supply in each BTO exercise, and up to 60 per cent of flats in each Sale of Balance Flats exercise, will be set aside for those who qualify for the scheme.

The scheme will also be renamed as the Family and Parenthood Priority Scheme to reflect its expansion, MND and HDB said.

Applicants in the new category will also be shortlisted ahead of all other first-timer applicants under this scheme if they apply for BTO flats that are four-room or smaller in non-mature public housing estates. 

OTHER ANNOUNCEMENTS BY HDB AND MND

  • The Government will launch a third community care apartment project comprising 200 units in Bedok later this year. These apartments cater to seniors and provide customisable care services
  • The Government expects close to 100,000 private and public homes to be completed by 2025, with almost 40,000 homes completed this year. This will be the highest number of home completions in the last five years
  • The rental discount for eligible shops that have inclusive-hiring practices, such as employing those with disabilities or special needs, will be increased from 20 per cent to 30 per cent for three-year terms. The rental discount will be extended if the tenancy is renewed for another three years
  • The Government will launch an enhanced entrepreneur scheme that provides a 10 per cent rental discount to start-ups or existing businesses with innovative business models. This is to encourage them to set up shop in the heartlands
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The First-Timer (Parents and Married Couples) or FT(PMC) is a new priority category.

Related topics

Desmond Lee MND BTO HDB Budget 2023

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