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Minister Khaw to raise income ceiling for BTO applicants?

Minister Khaw Boon Wan gave a breakdown of the profile of BTO flat applicants for the month of May. (Screengrab from http://mndsingapore.wordpress.com/)
Minister Khaw Boon Wan gave a breakdown of the profile of BTO flat applicants for the month of May. (Screengrab from http://mndsingapore.wordpress.com/)

National Development Minister Khaw Boon Wan has hinted that there might be a need to revise the current income ceiling for Singaporeans applying for the Build-To-Order HDB flats.

In his latest blog post on Thursday, Minister Khaw gave a breakdown of the profile of BTO flat applicants for the month of May.

The data showed that among the number of first-timer applicants, more than half had applied under the HDB's Fiancé-Fiancée Scheme with the median age at 27.

The median age of those in the remaining portion which include married couples is around 34. Given the rising age of applicants, Minister Khaw said that there is justification in revising the HDB income ceiling.

In his first BTO launch last month, Minister Khaw said that nearly 14,000 Singaporeans applied for 4,000 units.

Of those who applied, 65 per cent are first-timers, meaning those who have never bought a flat directly from HDB or taken a CPF housing grant.

The minister also noted that 40 per cent of the applicants had applied under the Married Child Priority Scheme, to live near their parents.

While the ministry will be "mindful" of their intentions, he pointed out that it will not be easy considering that mature estates have limited scope for further BTO development.

"But we will try to squeeze out as many as possible," he said.

Another point he raised was the number of those who had made repeated attempts for a BTO flat but still failed to secure a home.

Around 45 per cent of the applicants who applied for such flats had made more than one attempt but the figure is lower than the one recorded in the previous quarter, where it was an estimated 60 per cent.

Although the decrease in numbers look promising, Minister Khaw said that there is "much work to do still".

"I take some comfort that the situation seems to be improving. But we have much work to do still," said the minister.

Adding that he is also "conscious" of the frustrations and anxiety of those who did not have the chance to ballot for a flat, Minister Khaw said he is "ramping up" the number of BTO launches to ease this problem.

Still, he advised couples to opt for flats in less mature estates to improve their odds.

Minister genuinely concerned?

Real estate analyst Tejaswi Chunduri at PropertyGuru.com.sg told Yahoo! Singapore that the minister is concern about home buyers and is making an effort to study the market well so that comprehensive measures can be taken to help the genuine home buyer.

According to the latest news, HDB has planned to ramp up its flat supply by a further 3,000 flats for 2011. This increases the full year's BTO supply for 2011 by about 15%, i.e. from 22,000 to 25,000 units.

In addition to this, Minister Khaw has asked the HDB to look into releasing another 1,000 unsold units from earlier sale exercises later this year. With these 1,000 flats now set to be added from the Sale of Balance Flats (SBF) exercise, 2011 will see the release of a total of 26,000 BTO units.

"The increase in the supply of BTO flats will certainly be seen as a step towards meeting the demand and supply ratio. Together with this, it will help in providing more choices for those buyers who are very choosy when selecting the flats," said Chunduri.

On the possibility of a revised in the income-ceiling, she said that it could affect the demand for private property as buyers interest would shift towards either executive condominiums or HDB flats.

"If the income ceiling for BTO flats is raised, so will the ceiling for executive condominiums (ECs). This could likely shift some buyers interest towards buying EC or HDB flats instead of private property, thereby increasing demand in this sector," she said.

However, she added that there are still chances of an increase in prices of HDB flats. The reason being there is currently a strong demand for public housing due to the shortage of supply in the resale and BTO market.

"Any increase in demand will in turn push up property prices," said Chunduri.

In his recent blog post, Minister Khaw Boon Wan gave a breakdown of the profile of BTO flat applicants for the month of May. (Screengrab from http://mndsingapore.wordpress.com/)
In his recent blog post, Minister Khaw Boon Wan gave a breakdown of the profile of BTO flat applicants for the month of May. (Screengrab from http://mndsingapore.wordpress.com/)

For readers information, "First-Timer" refers to an applicant who has never bought a flat directly from HDB, nor taken a CPF Housing Grant.

"Second-Timer" refers to an applicant who has previously bought an HDB flat directly from HDB or taken a CPF housing Grant.

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