Stricter penalties for couples who don't select BTO flat after balloting

Buyers are encouraged to book a flat when invited to do so.

Ilyda Chua | March 02, 2023, 03:40 PM

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Tighter rules for the non-selection of new flats will kick in with effect from the August 2023 Build-To-Order (BTO) Exercise.

With this, buyers who do not book a flat when invited to do so will accumulate more non-selection counts, which come with more stringent rules for future flat applications.

This measure will help allocate flats more efficiently so that those who need a home can secure their flats as quickly as possible, said Minister for National Development Desmond Lee in his Mar. 2 Committee of Supply speech.

Tightened rules

Under the tightened rules, buyers who accumulate non-selection counts will be categorised as follows:

  • First-time buyers who accumulate one non-selection count (down from the current two) will be deemed second-timers for a year in the computer ballot.
  • Second-time buyers who accumulate one non-selection count (down from the current two) will have to wait one year before they can apply for a flat again.

This means that both first- and second-time buyers only need to pass over a BTO flat once before being subject to the non-selection deterrents.

However, Lee also acknowledged that buying a home is a large financial decision.

"So we want to be fair to applicants who have very limited options, say when they are invited to select their flat," he said.

As such, the non-selection count will be waived for applicants with 10 or fewer BTO flats to choose from, or five or fewer Sale of Balance Flats (SBF) to choose from.

HDB may also decide to waive the non-selection count in the event of extenuating circumstances, Lee added.

Striking a balance

Lee noted that despite higher application rates for BTO sales exercises in recent years, about 40 per cent of flat applicants do not book a flat when invited to do so.

"There is probably a range of reasons. For some, the remaining flats may be out of budget. For others, they might be considering other housing options, or prefer flats with specific attributes, for specific reasons.

"Understandably, some would rather give up the opportunity to select a flat now, and wait longer for a better flat," said Lee.

"But whatever the reason, such applicants do crowd out other homebuyers who may have more pressing needs."

He added that some applicants are rather selective, wanting only flats on high floors.

With the tighter rules, the Housing Development Board hopes to strike a balance between considering the interests of applicants with urgent housing needs, while being fair to successful balloters.

As such, "we encourage applicants to apply for flats only if they really intend to purchase one," Lee said.

Photo via ZR Lin/Unsplash