Strict policy for HDB flats applicants

The long line of Housing Board flats buyers has diminished, and it’s fading out on a fast pace.

Serious buyers are now acquiring their preferred units earlier as a bunch of “frivolous” buyers, who seemed to annoy other buyers by rebuffing the homes offered upon them, have backed out. This change has resulted to a new HDB policy, which was initiated last May, in order to prevent uninterested buyers who just waste the time of other buyers.

Since the implementation of the policy, the number of applicants has dropped, HDB says. On the other hand, the number of buyers rejecting the apartments offered to them also dropped between 14 and 50 percent, from 22 and 77 percent. This change in the applicants’ behaviour justifies the “two strikes and you're out” tactic of the HDB so as to dissuade frivolous applications. Now, applicants tend to be choosier and they are more likely to accept a flat being offered to them.

The change in the policy implies that first-time buyers who reject the flats offered to them two times or more will lose their first-timer priority, effective for a whole year. This also means that those buyers will be moved at the back of the queue.

First-time home buyer Mark Zhou said that the new policy obliged him to think twice before he applies. “I think the new rules have changed the behaviour of home buyers for the better. It makes getting a flat more efficient, and people give it more serious thought before applying”, Mr. Zhou said.

Colin Tan, research and consultancy head at Chesterton Suntec International, stated that the new rules has “shortened the whole booking process”.

Eugene Lim, associate director at ERA Asia-Pacific, said that recent data proved the effectiveness of the new policy. “Demand has stabilised due to the tweaking of rules, and also due to market sentiment. First-timers are shown to be taking their applications seriously”, said Mr. Lim.

The administrative load of HDB has also been reduced due to the change. In the past, new HDB projects had more applicants than the units they were offering, though high rejection rate left many units still vacant.

Since the new policy has been implemented, projects like the Compassvale Pearl in Sengkang are likely to expect zero unsold units. It was also formulated in order to alleviate the escalating concerns that several applications for the BTO or build-to-order projects of HDB have little connection to the real take-up rate.

At end-2007, demands for new apartments have lifted up, and continued to increase in the previous years as young couples flooded HDB to apply for homes. The homes are only constructed when an established demand level is already attained – which normally consumes about three years – and are usually more inexpensive than those homes in the resale market.