from the ground Up

by Jessica Cheam, The Straits Times, May 23 2008

First-timers who reject two offers to buy a flat lose priority status for a year

THINK hard before you apply to buy a new Housing Board flat: Lodging frivolous applications will now get you sent to the back of the queue.
New HDB rules unveiled yesterday target flighty first-time buyers who have been hedging their bets by applying for flats when they often have no intention of closing the deal.
The HDB said the move “will encourage applicants to consider their options carefully”. It also addresses concerns that the thousands of applications that pour in for HDB projects bear little relation to the actual take-up rate.
Look at Punggol Lodge, launched in October. There were 464 four-roomers on offer, attracting 1,484 applications, but when offers went out, 1,069 “buyers” eventually said no thanks.
And when 60 three-room flats were offered in November’s launch of Segar Meadows in Bukit Panjang, 98 per cent of first-timers – those who applied to purchase a flat for the very first time – who were offered a flat, rejected the chance to buy.
The HDB hears all sorts of excuses. Some applicants said they wanted to also consider flats under other HDB sales or that the unit they really wanted had already been selected. Others indicated that they weren’t cashed up.
The demand for new flats shot up last year after young couples, who were priced out of the resale market, tried for new HDB homes, which are often cheaper.
The rush – and problem with frivolous applicants – prompted National Development Minister Mah Bow Tan to call for a review of the rules last month.
The new rules, which apply immediately, have a “two strikes and you’re out” approach. A first-time buyer who rejects an offer to buy a flat twice or more at any HDB sales exercise, loses his first-timer priorities for a year. That effectively puts him at the back of the queue with the second-timers.
First-timers get two chances in a ballot. If they live near their parents, they get two more, under the Married Child Priority Scheme.
Last August, the HDB also began setting aside 90 per cent of the flats in a sales exercise for first-timers. The rest were earmarked for second-timers.
These are the first-time privileges a person could lose for a year if they get too picky.
But the HDB is also helping genuine first-timers who repeatedly miss out in ballots. If you apply twice and miss chances to buy, you can have another shot on your third try and your name goes into the ballot once more. For your fourth try, you get entered two more times, and so on.
This applies only to build-to-order projects in newer estates like Punggol. The old rules gave first-timers extra chances only on the fifth try, but at all estates.
First-time hopefuls like administrative officer Chen Xiuling, 26, said the new rules would help weed out those with a “just apply and see how” attitude.
But 26-year-old insurance agent Sarah Teo thought the “two strikes” rule was a bit strict: “What if both times you were left only with undesirable flats on a low floor, at bad locations?”

(related story)

Extra chances in mature estates

THE Housing Board yesterday scrapped an earlier initiative to give additional chances to unsuccessful first-time buyers looking for a flat in a mature estate.
This was part of an overhaul of HDB’s application processes, which aims to discourage buyers with no genuine interest.
It was also part of the board’s move to make build- to-order (BTO) flats its main source of new housing stock.
Previously, first-time buyers who were unsuccessful at securing a flat were given additional chances from their fifth try onwards in all estates.
This included popular ones in established towns such as Toa Payoh and Queenstown.
Under the new rules, a buyer gets extra chances earlier – after two unsuccessful attempts.
This means on his third try, his name goes into the ballot one more time. On his fourth try, he gets entered two more times, and so on.
But the catch is that the extra chances apply only to BTO projects in non-mature estates such as Punggol.
BTO flats typically take three years to be constructed and are built only if certain demand is reached.
HDB said yesterday that the rationale for the change was that sales exercises in mature estates are often oversubscribed.
It is “not HDB’s intention to satisfy all such demand, since the mainstay of new flat supply is BTO flats in non-mature estates”, said HDB’s director of estate administration and property Yap Chin Beng.
HDB’s decision comes after recent reports that some first-timers could be exploiting the system to improve their chances by accelerating their failure rate, so as to enjoy a higher chance of success by the time flats in a desirable location become available.