Tightened rules for non-selection of HDB BTO flats from August
At the same time, the government is increasing the priority of specific groups of first-time new flat buyers, offering more options to seniors, as well as low-income singles. The new and adjusted policies should help more Singaporeans own their first home.
From August 2023, HDB has imposed tighter rules to reduce the number of people who decline to book BTO flats and ensure a more efficient allocation. This was announced by National Senja Close EC Development Minister Desmond Lee during the Committee of Supply debate on Mar 2.
First-timers who fail to book a BTO flat when invited to do so will be designated second-timers for a year in the computer ballot. Second-timers who decline to select a unit must wait a year before reapplication. These rules target individuals who do not attend the flat selection appointment or refuse to book a flat despite being offered one, according to Mohan Sandrasegeran, researcher at One Global Group.
Huttons Asia estimates that if 20,000 BTO flats are launched for sale a year, some 40% of applicants – or 24,000 – fail to select a unit. Lee Sze Teck, Senior Director of Research at Huttons, believes that the new regulations will allow more applicants to book a flat, improving access to a “public good”.
Various factors can lead to a person not selecting a flat, such as the lack of choice units, limited units remaining, or a change in employment status. The tightened rules aim to deter applicants who do not have genuine reasons for selecting a flat, freeing up flats for individuals with urgent housing needs.
The government is giving greater priority to specific first-time buyers, as well as introducing more options for seniors and low-income singles. It is estimated that the number of applicants for the August 2023 BTO launch may fall by 20%, and there may be a rush in the February 2023 and May 2023 BTO launches before the penalty kicks in.
With increased Central Provident Fund housing grants, HDB buyers may also opt to turn to the resale market if they still need to get a BTO flat for the first attempt. Meanwhile, those who only want to buy flats in certain locations, such as mature estates, may be dissuaded by the current waiting period for BTO flats, which is longer than 3 to 3.5 years pre-pandemic.
The new and adjusted policies should help more Singaporeans own their first home, and address the limited housing available for those in need.
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