FLATS FOR NEWLY MARRIED COUPLES

FLATS FOR NEWLY MARRIED COUPLES:

(Waiting time): 6.

Mdm Cynthia Phua asked the Minister for National Development (a) how long does it take for newly married couples to get their new flats; (b)

Column:215

what is the waiting time for these newly married couples to apply for flats in the new estates in Punggol and Sengkang; (c) what is the waiting time if they were to apply for a three-room interim rental flat; and (d) what are the other alternatives for these couples.

The Minister of State for National Development (Ms Grace Fu Hai Yien) (for the Minister for National Development): Under HDB's current Build-To-Order (BTO) system, new housing projects will proceed for construction once a good majority of the units have been sold. Interested buyers can book a new HDB flat when a project is launched, say, in the new estates in Punggol and Sengkang, and collect the keys when the flats are ready about three years later. This is an improvement over the previous queue-based system (Registration for Flats System) where the length of the queue meant that time between application and collection of keys was as long as 7-8 years at the peak.

Alternatively, flat buyers today can also book a new flat under HDB's Balloting Exercises or Combined Balloting and Walk-in Sales Exercises for unsold flats. The exercises offer new flats that are already under construction or ready for immediate occupation.

First time flat buyers buying a new HDB flat are given priority under HDB's BTO and Balloting exercises. This is in recognition of their more pressing need to set up home and start a family. Their priority was further enhanced in August 2007 to ensure that at least 90% of the flat supply for public applicants is allocated to them. First-Timers and applicants buying a new flat to stay near their parents or married children, what we call the Married Child Priority Scheme (MCPS), are also given higher chances in the ballot vis-a-vis other public applicants. In addition, First-Timers who are unsuccessful for four or more times previously will be given additional chances in the ballot for new flats.

Column:216

HDB no longer leases out three-room flats for interim rental since the suspension of the Transitional Rental Housing Scheme (TRHS) in January 2002. With the abolition of the previous queue system and reduction in the waiting time for new flats to about three years, there is no longer a need for HDB to provide interim rental flats to young couples. HDB's subletting rules have also been progressively relaxed to make it easier for those who need interim rental housing, to rent a flat or a room from other HDB lessees.

Eligible First-Timers who need housing on a more immediate basis can also buy a resale HDB flat that meets their needs and affordability, with a housing subsidy provided by the Government in the form of a $30,000 or $40,000 CPF Housing Grant. First-Timer households in continuous employment for the last 24 months with an average monthly household income of $4,000 or less, can also apply for the Additional CPF Housing Grant of up to $30,000, when they buy a new or resale HDB flat.

Mdm Cynthia Phua (Aljunied): Would the Minister not agree that there is still a need to review the planning parameters by HDB? HDB seems to end up in excesses either way in the property cycle - 10,000 excess flats three years ago and now, 27,000 applicants for 4,764 flats available currently in HDB website. That is 5.6 times over-subscribed.

My second question: will the Minister also consider providing three-year data on the potential supply of flats and its location so that young people who are going to get married are able to plan and be assured of the potential supply of flats? This is similar to private developments because once they apply for planning approval, the data is available in the URA website.

Ms Grace Fu Hai Yien: Mr Speaker, I would like to clarify what Mdm Cynthia

Column:217

Phua has brought up. On the first point about planning parameters, HDB would look at the long-term demand for HDB flats when it comes to planning, building and supply of HDB flats. But I think Members of the House would know that it is difficult to predict with precision what is the actual demand in a three-year timeframe. Mdm Cynthia Phua has rightly pointed out that three years ago, we had excess flats. And now, in some cases, there is over-subscription of our projects. It is not because there are more couples getting married. I think our rate of marriage has not increased dramatically. But I think that there are certain market forces that affect supply and demand of public housing vis-a-vis private housing, for example, that it is not possible to predict with accuracy. It is for this reason that we have also moved into a scheme like a Build-To-Order Scheme where we will construct the flats only after a good proportion of the flats have been confirmed for booking. And that, in a way, avoid situations where we end up with excess flats.

With regard to under-supplying, as Mdm Cynthia Phua has suggested by way of referring to the subscription rate, I would just like to clarify that what Mdm Cynthia Phua could have referred to is really a very macro number, 5.6 times. Any one going to the HDB website can actually look at the subscription rate by project. I would like to highlight some of them for the information of the House.

For example, one particular project that is often highlighted by applicants on the slim chances that they get is Telok Blangah Towers, a very popular area in a good location, probably a stone's throw away from Sentosa Cove. For that particular project, where 400 flats are offered for sale, 7,800 applicants applied for it. Very roughly, that is one in 20 chances. If you look at over-subscription

Column:218

rate, that is a huge number - 2,000%. For First-Timers, in that project, we received 5,000 applications. And of that 5,000 applications, 1,000 applications come under the MCPS, in other words, they have parents living in that vicinity. So even if we were to have a project that is totally exclusively allocated to First-Timers with parents in the neighbourhood, we will still have a balloting system because there is just not enough supply for such a unique project in a central location to meet the demand. Does that mean that this is the situation in other projects? The answer is no.

If you look at other projects offered at the same time in October, in Punggol Lodge, a BTO project, for 516 flats, we received 1,600 applications. The chances are one in three. For First-Timers, they almost have a one in two chance of getting a project like this. Similarly, in September, in Sengkang, also a BTO, for 698 flats, 1,300 applications were put in. Again, the chance is one in two. So the chances vary with location. And because we have published such information on the website, I think, for First-Timers who are buying their flat, making their decision, we suggest that they look carefully - looking at the chances, considering their budget, considering the time that they are prepared to spend waiting and make a decision that is appropriate for them.

Having said that, coming back to the point about showing planned numbers. It is really not possible for us to predict demand accurately three years down the road. Let me explain that HDB and the Ministry have actually adjusted our building plans according to what we see as demand. I will just give an example. In 2006, our sales programme has actually sold 5,700 flats for the entire year. For 2007, the sales programme offered 13,000 flats, more than two times of what we have offered in 2006. And in 2008, for this first half, we expect to

Column:219

offer about 6,000 flats on sale, pegging it at about the same level as 2007. So if we have used 2006 as the planning norm, which was the average that we have seen in the last few years, we would not have adjusted the numbers. So the actual numbers have shown that our building plans have flexibility and where we see there is high subscription rate in certain areas, we would increase the supply of HDB flats.