HDB FLAT ALLOCATIONS (Policy to assist young couples)

Dr S. Vasoo asked the Minister for National Development whether there will be further policy changes to assist young couples to be allocated new flats earlier and to reduce financial outlay of those buying resale flats.

Mr Lim Hng Kiang: Mr Speaker, Sir, the Registration for Flat System introduced in October 1994 recognises that first-timer applicants have more urgent need over upgrader applicants in getting a flat. Hence, 60% of the flat supply in non-mature estates are apportioned to first-timers and 40% to upgraders.

With about equal numbers of first-timers and upgraders currently in the queue, the allocation of HDB flats already favours the first-timers as they will get their flats earlier than the upgraders. HDB is monitoring the situation and will adjust the allocation proportions, if necessary, in future.

In addition, rather than queue for new flats, first-timers can also choose to buy resale flats, with the help of the CPF Housing Grant. The grant quantum is $40,000. It is $50,000 for those who purchase a resale flat near their parents' home. This scheme is very much more attractive than before. HDB will also continue to monitor the scheme and will refine it, if required.

Dr S. Vasoo (Tanjong Pagar GRC): Sir, would the Minister review particularly the waiting time for first-time young couples applying for flats? The second supplementary question is whether the Ministry would actively review the burden of cash outlay, particularly for young couples who are purchasing resale flats, so that we could encourage more young couples to live nearer their parents.

Mr Lim Hng Kiang: We are monitoring the waiting time for all categories, whether they are first-timers or upgraders, and we will have to adjust if the situation calls for it.

As regards the need for cash upfront, since 1995 my Ministry has made many modifications to the procedures so as to minimise the need for cash upfront, particularly for first-timers who are buying resale flats. For example, we have brought our valuation closer to market. We have allowed back-to-back transactions for upgraders. We have allowed 10% downpayment for certain categories. We have allowed 5% downpayment for those with very low income. So there are many measures to help first-timers, particularly the low-income families, to buy their flats.

But I must stress that buying a property is a major investment decision of any family and therefore they should build up their savings resources for this very big investment decision. Young couples should not expect to be able to buy a property without setting aside cash savings for this very major investment decision.