HDB'S PURCHASE OF 3-ROOM FLATS FROM OPEN MARKET

Mr Low Thia Khiang asked the Minister for National Development whether the Housing and Development Board's purchases of 3-room flats from the open market are based on the demand for units in preferred estates by lower-income applicants.

Mr Lim Hng Kiang: Mr Speaker, Sir, the 3-room buy-back scheme from the open market for sale to low-income families is part of Government's efforts to help the low-income families own their flats.

HDB buys back from the open market a wide range of 3-room flats at varying prices and at varying locations. These flats are then offered for sale to the 3-room flat applicants on the waiting list. The take-up rate is about 58%. Applicants are given a second opportunity to choose the flat of their choice. Those who are very particular about location can buy a resale flat directly, with the help of the $40,000 CPF grant given to first-time purchasers.

Mr Low Thia Khiang (Hougang): Sir, what is the stock of such 3-room flats that HDB has for sale to the applicants? Would the Minister consider buying back these flats based on the demand of applicants rather than buying them in, say, Woodlands or Chua Chua Kang, when most applicants would prefer Hougang or Toa Payoh?

Mr Lim Hng Kiang: Sir, the HDB officers dealing with this scheme have a fairly good idea of where the demand lies and they would direct the housing agents to source for those flats where there is a demand. Most of the flats would be in the central area, like Queenstown, Bukit Merah, Toa Payoh, Bedok and Geylang. Not many flats can be sourced from the Woodlands area. The sourcing of such flats is quite responsive to the demand.

Mr Low Thia Khiang: Sir, so far, how many applicants have rejected the flats because they are not in the location of their choice?

Mr Lim Hng Kiang: As I explained earlier, the take-up rate is about 58%. So 58% would choose the flats when they are offered to them. The remaining 42% will reject the flats. But we give them a second chance to choose again. Many of these flats are sourced from the open market. So there is no guarantee that we can match accurately the supply with the demand. We roughly know the locations where the applicants prefer and we try to source the flats in those locations. But again it depends on the availability of such flats in the open market.

When they are offered the flat in the same location they may not choose it because of facing, floor height, and other reasons. But they have a second alternative. They can go out to the open market, buy the resale flat on their own in the location which they want, and the Government will help them with the $40,000 CPF housing grant or $50,000 CPF housing grant if they are staying close to their parents.