HDB Flat Owners Who Gave Up their New BTO Flats in 2018

Mr Speaker, in 2018, about 900 Housing and Development Board (HDB) flat buyers cancelled their Build-To-Order (BTO) flat bookings, of which 25% were 2-room flexi or similar flats, 15% were 3-room flats, 38% were 4-room flats and 22% were 5-room flats.

The main reasons cited for cancelling the BTO flat bookings were either a change in housing plans, for instance, they wished to remain in their existing flat, or buy a resale flat, or a change in financial circumstances which affected the flat purchase.

Flat buyers who cancel their flat booking before signing the Agreement for Lease forfeit the booking fee, which ranges from $500 to $2,000, depending on flat type. If they cancel the flat booking after signing the Agreement for Lease, the forfeiture is 5% of the flat price. They would also need to wait a year before they may apply for another subsidised flat. These measures are in place to ensure that buyers are serious when they apply for a flat, and do not deprive others who are in urgent need of buying a flat. Nevertheless, where there are valid grounds, HDB has waived the forfeiture on a case-by-case basis.

I thank the Minister for the answers. I have three supplementary questions. Firstly, do we see a significant increase in the number of Singaporeans giving up BTO flats in 2018 compared to the past few years? And based on percentage, are there more second-timers that gave up BTO flats than the first-timers? Thirdly, are there plans to pick up the profile of Singaporeans who give up their BTO flats so that we can have a simple profile at the point of application and counsel them accordingly so as to minimise the chances of them giving up their BTO flats?

For those who give up the BTO flats, do we have a profile of whether they are trying to sell the flat, they cannot sell, or for other reasons, so that we can identify this profile and, at the point of application, counsel them accordingly?

Mr Speaker, I thank the Member for these supplementary questions. We have not seen a spike in the numbers. Every year, there will be a few who come to HDB to cancel for the reasons that I have cited. There are some second-timers who would like to give up because, as the Member Mr Ang Wei Neng has cited, they find it difficult to sell their present flat and choose not to proceed with the purchase. But these are not that many because, very often, when they have these difficulties, our first recourse is to give them more time to sell the flat. And, very often, with more time, they are able to sell the flat and then move on to their next flat that they have purchased.

So, we continue to analyse each of these cases and, as I said earlier, we are flexible. If there are genuine reasons, if there are financial difficulties, we will have different ways of helping them.

Mr Speaker, may I ask the Minister, when these flats are given up by the purchaser after they have signed the agreement, are these flats subsequently put up for sale under the Sale of Balance Flats (SBF)? Does HDB suffer losses when the flats are resold? The third question is: instead of forfeiting 5% of the purchase flat price, would HDB consider charging an appropriate administration fee, considering that HDB is not a commercial entity and, really, if there are no losses suffered by HDB, would there be a lighter penalty imposed? Otherwise, the flat buyers do suffer quite a heavy loss for losing 5% of the flat price and considering that he also has a one-year time bar imposed on him.

Mr Speaker, the flats are all put back to the Sale of Balance Flats. So, they are all eventually sold through the SBF exercise. As for why 5% and whether there are other mechanisms, at the end of the day, as I have said, we need a mechanism that ensures buyers consider very carefully the flat purchase. This is a major commitment; a major commitment for the flat buyer as a couple or as a single, and it is a major financial commitment as well. So, we want to have that in place to ensure that buyers take it very seriously and are also mindful that, when they make a flat purchase, it is a commitment on their part. If they were to apply and unwind it later, they are, in fact, depriving others who may want the flat more urgently.

So, it is not so much a loss on the Government but, in fact, they are depriving others of an opportunity to get a flat. So, we want that mechanism in place. But, as I have said, we do exercise flexibility and if there are individual cases that for some reason or another decide not to proceed with the application, they can put up the case and we will look at it on a case-by-case basis.

Minister, I am speaking for the non-first-time home owners. How does the Ministry of National Development propose to help residents who, as home owners, have genuine difficulty in selling their homes because of the Ethnic Integration policy? For instance, in Little India, where flats are more popular with a certain ethnic group and it is really hard to sell to Chinese potential buyers, some of my residents really have genuine difficulty in selling their flats, yet have to commit to purchasing their BTO flats.

Mr Speaker, I have mentioned earlier our first way of addressing these appeals is to give them more time and, very often, we find that by giving more time to complete the transaction of the new flat and to sell the existing flat, they are able to proceed. But if even after more time is given, they are still unable to proceed and they wish to not proceed with the transaction of the new flat, they decide that it is better for them to just stay with their existing flat, they do not want to sell, then I suggest that they approach HDB and we will look at their particular case and, if indeed there are genuine difficulties with proceeding with the transaction, we will consider whether or not the forfeiture may be waived.

Minister, what I want to raise is for joint applicants. What if something happens, say, if someone passes on or for whatever other reason, would HDB allow them to continue to purchase the flat, that is to say, as a result, they do not fulfil the conditions? And if they cannot, would a special waiver be given not to impose a penalty on them for such unfortunate cases?

Mr Speaker, in the event of a demise of an applicant, if the remaining applicant wishes to purchase the flat and is able to meet the eligibility conditions, certainly we will facilitate that transaction. And if in the event the eligibility conditions are not met and the applicant chooses not to proceed, we will certainly be prepared to consider waiver of the forfeiture.