BUY BACK SCHEME OF 3-ROOM HDB FLATS (Stepping up of purchase)

Dr S. Vasoo asked the Minister for National Development if the Housing and Development Board (HDB) will step up the purchase of 3-room HDB flats under the Buy Back Scheme.

Mr Koo Tsai Kee (for the Minister for National Development): Mr Speaker, Sir, the Selective Buy-Back of 3-room Flats Scheme was introduced on 19th May as one of the four measures taken by the Government to help low-income families own HDB flats. Eligible low-income families with household income not exceeding $1,500 per month can purchase the 3-room buy-back flats at heavily subsidised prices.

In addition, some of these flats bought under the scheme are also offered for sale to lessees affected by SERS and tenants affected by Relocation Exercises, and for letting to rental applicants under the Transitional Rental Housing Scheme.

HDB will continue to buy 3-room flats from the open market under the buy back scheme to cater to the demand from the low-income families and the housing needs under the other various schemes. Based on the current demand, there is no need to step up the purchase of such 3-room flats.

Mr Low Thia Khiang: Sir, is it true that the HDB purposely refuses to buy back 3-room flats in opposition wards?

Mr Koo Tsai Kee: Mr Speaker, Sir, there is no truth in the allegation, as HDB actively buys back all good 3-room flats because we recognise that there is always a group of people who need 3-room flats even though their aspirations may be 4- or 5-room flats. So there is no truth in that statement.

Mr Low Thia Khiang: Sir, what are the criteria for the HDB to decide whether to buy back a particular unit of 3-room flat from a particular area?

Mr Koo Tsai Kee: The first criterion will be price. If Mr Low Thia Khiang's residents are selling a 3-room flat for $250,000, then the answer is no straightaway. But if the price is reasonable, then the next criterion is whether the 3-room HDB flat would be of use to somebody else, because we cannot keep empty stocks of 3-room flats around. These are taxpayers' monies. So we must buy a flat which is reasonably in demand. But we give the benefit of the doubt to the future buyers. In other words, we think that there will be a demand for this particular unit bought back from the market.

Dr Vasoo: Sir, is the Parliamentary Secretary willing to consider under the buy back scheme, particularly those cases that are upgrading, to enable them to move up to a 4-room flat?

Mr Koo Tsai Kee: There is a huge demand in the resale market. Members must have read in the newspapers that the resale demand for this year has shot up to about 50,000 units. So there is no shortage of demand. The cases that we hear of people having difficulty in selling their 3-room flats boils down to price and location. For location, we can always discount it and sell it at the right price. There is always a clearing price for everything. Does he not agree?

Dr Vasoo: I do not think I can agree because it depends on what price you set. It depends on whether there is a willing buyer and willing seller. May I ask, if there are upgraders who are, in fact, stuck for more than a year and they need to upgrade to bigger flats, could HDB consider such cases?

Mr Koo Tsai Kee: Mr Speaker, Sir, if Dr Vasoo knows of such cases, could he please write to the Ministry and we will look at them carefully.