Sunday, March 4, 2012

More Build-to-Order (BTO) flats for second-timers

Khaw Boon Wan, Minister of National Development, has recently announced in Budget 2012 that more flats will be allocated to second-timers starting from March 2012 sales exercise. Depending on the location and HDB unit type, up to 30 per cent of new homes will be set aside just for second timers:

"Minister for National Development Khaw Boon Wan announced in Parliament today several new housing measures to provide more housing options for second-timers:
a) Allocation of Build-to-Order (BTO) flat supply in non-mature estates to triple from 5% to 15% – to provide second-timers better access to affordable new flats
b) Allocation of Executive Condominiums (ECs) to increase 6-fold from 5% to 30% – to help second-timers realize their upgrading aspirations"
Source : Offering Second-Timers More Housing Options

Second timers are those prospective buyers who have already used public housing subsidy from the Government before. Mr. Khaw has been signaling that once the application rates for first timers stabilize, HDB will increase the number of units allocated for second timers. Back in January 2012, in his blog post named An Auspicious Start, he has mentioned that this condition is met:

"The first-timer application rate is currently a comfortable 1.5.  Not surprising.  This is similar to the rate of 1.6 in the November BTO.  Both are good rates; they mean that practically all will get a chance to choose a unit.

Our goal to help young couples get their first homes is coming true. We can now move on to better help the second-timers. Their application rate is currently 23.9, compared to 25.9 in the November BTO.

I hope to be able to announce some changes to BTO balloting rules for the next BTO launch in March."

According to HDB, application rates for first timers have stabilized to less than 2 applicants per unit in the recent launches. This means that almost all first time applicants can grap an HDB unit when they apply.

With the new rules, the quote for second timers in non-mature HDB estates is tripled to 15% from 5%. 70% of new HDB's released are from non-mature estates. The quote for mature estates and sales of balance flats (SBF) has not changed yet.

An important change is in Executive Condominiums (ECs) where the quote is increased six times to 30% which is effective immediately.

New HDB Second-Timer Quotes
Build-to-Order (BTO) Executive Condominium (EC)
Mature Estates Non-mature estate Sales Of Balance Flats 
Previous Quote 5% 5% 5% 5%
Revised Quote 15% 5% 5% 30%
Effective March 2012 BTO Launch March 2012 BTO Launch March 2012 BTO Launch Immediate

Will these quote changes for second-time buyers effect first-time buyers. HDB says no:

"No. The large BTO flat supply has cleared much of the backlog of first-timers waiting to buy a flat and application rates have since stabilised. In addition, HDB will be releasing another 25,000 BTO flats this year. As such, we are looking to help second-timers, while remaining confident that the needs of first-timers will be met." Source : HDB Q&A

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