HOUSING AND DEVELOPMENT BOARD FLATS (Cancellation of applications to purchase)

Mr Ong Kian Min asked the Minister for National Development (a) from July to December 2000, how many applications for new Housing and Development (HDB) flats have been cancelled by the HDB due to the applicants declining to proceed with their applications; (b) whether there has been any increase in such cases compared to that for January to June 2000; and (c) what are the main reasons for the applicants' decision not to proceed with the purchase.

The Minister of State for National Development (Dr John Chen Seow Phun) (for the Minister for National Development): Sir, under the Registration for Flats System (RFS), applicants for new flats are queued based on a first-come-first-served basis to select flats. RFS applicants may request HDB to cancel their applications at any time from application to before taking possession of the flat. The reasons for not proceeding with the flat purchase are varied. It could be that some are now not in urgent need of a flat or that some may have chosen to buy resale flats. The HDB does not require RFS applicants to give the reasons for cancellation of their applications.

Between July and December 2000, there was an average of 1,100 cancellations of RFS applications per month. This represents a fall of 45% when compared to the average of 2,000 cancellations per month for the period between January and June 2000.

Dr Teo Ho Pin (Sembawang): Sir, may I ask the Minister of State whether it is fair for HDB to force applicants to either select or cancel the flat at the time of selection? Also, can HDB allow applicants to keep their queue number for subsequent selection of flats?

Dr John Chen Seow Phun: Sir, under the RFS, applicants who have been shortlisted to select a flat are not allowed to stay on the queue. If they do not book a flat, when invited to do so, their applications will be cancelled. This is because HDB has committed the flat supply to them since the building contracts have already been awarded. Moreover, if we allow shortlisted applicants to hold on to their queue positions, many may do so in order that their queue positions will be ahead when good units in better locations are offered. So that is the reason why we require them to cancel their applications. And if they want to purchase a flat later, they would have to re-queue again.

Dr Teo Ho Pin: Since the number mentioned by the Minister is 1,100, it is not really a big number. Why can the HDB not allow more flexibility because it is not fair for applicants to queue for three or five years because the number of flats offered at that time could be very few and might not be suitable, and if you cancel their queue positions, they have to go all the way back of the queue again?

Dr John Chen Seow Phun: Sir, for first timers, the waiting time is about one year to 11/2 years. The reason why we have so many dropouts, so to speak, is because during the boom period, 1996-1997, a lot of people queued up by paying a few hundred dollars and, because of the recession, they found that they really did not need a flat and they felt that the prices might not go up, so they dropped out of the queue. It is not fair to allow them to stay on the queue and deprive those who have genuine needs because these people simply, as I said, want to just wait until there are good units available before they select a flat. If there is none, they do not want to select a flat, but they want to retain their positions in the queue. I do not think that is fair.

Mr Goh Choon Kang (Marine Parade): Sir, the Minister of State mentioned good units. Does he mean there are bad units? And if so, are they cheaper?

Dr John Chen Seow Phun: Sir, choosing a unit is a very subjective matter. People choose according to floor level, location, maybe even feng shui, I do not know.