Tuesday, 26 September 2023

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Shrinking demand for HDB BTO flats: Based on fact and figures?

By S Y Lee and Leong Sze Hian
We refer to media reports that about 1,900 HDB flats, or 8 per cent, have been cut from the original supply of 24,300 units this year, in order to “respond appropriately” to shrinking demand.
The reduction of supply is mainly in the bigger flats: three-roomers and larger. Instead of 18,600 units, as announced last December, there will be only 16,700 flats.
But this is still more than the estimated 15,000 new Singaporean family formations annually, according to a Ministry of National Development (MND) spokesman.
In a written Parliament reply, National Development Minister Khaw Boon Wan said MND has had HDB clear the backlog of first-time applicants.
The number of two-room flats and studio apartments remains unchanged, at 5,000 and 700 units respectively, to cater to demand from low-income families, singles and the elderly.
MND’s spokesman said the first-timer application rate had eased to an average of 1.7 applicants a flat last year, and ranged between 1.0 and 1.7 for the first half of this year.
Discrimination against single mothers?
After we had read the above news, we had an unwed single mother with a 9-year-old son who came for financial counselling in Ang Mo Kio on Friday night. We understand that she has talked to the HDB,National Trades Union Congress (NTUC) Women’s Development Secretariat and her Member of Parliament (MP) more than a dozen times over the last 5 years or so, to appeal for a Built-To-Order (BTO) flat.
She has been repeatedly told that an unwed single mother with a child is not eligible for a BTO flat.
She has however been told that if she re-marries, she would be eligible immediately.
She is now staying with her 67-year-old mother who works as a cleaner for about $1,000 a month. Her mother would like to sell her HDB flat and live with her daughter and grandson if her daughter can get a BTO flat because the physical demands of being a cleaner is rather difficult.
As an unwed single mother with a son, she is unable to form a family nucleus with her mother who is in her second HDB flat, to buy a BTO flat.
Her son has been undergoing treatment at the Institute of Mental Health (IMH), and she had appealed with a doctor’s letter that it is preferred that for medical reasons – she and her son stay in separate rooms, in her appeals for a flat.
Why do we discriminate against unwed single mothers and their children? In this connection, are we not in breach of the Convention Against All Forms of Discrimination Against Women (CEDAW) and the Child Rights Convention (CRC) – which we understand Singapore to be a signatory to?
Why should a woman be discriminated against just because she is an unwed single mother? And is it right for a child to be discriminated against just because he is the son of an unwed single mother?
Are single fathers subject to this discriminatory policy too? We don’t think so – because as we understand it there are no unwed single fathers – only unwed single mothers
Demand is based on the number of family formations?
We find it rather incredulous that we can come to the conclusion that demand is dropping and, therefore, are reducing the number of BTO flats.
Using the “But this is still more than the estimated 15,000 new Singaporean family formations annually” as the logic for coming to the conclusion that demand is well catered for, is arguably erroneous, because it is not only newlyweds who need BTO HDB flats.
Have we forgotten about the 113,000 new citizens (who may already be married) granted in the last 7 years, who may buy HDB BTO flats after getting citizenship?
What about the demand from the following categories of Singaporeans:-

  • Second timers
  • Third timers who are not eligible
  • Those who are unable to obtain a Housing Loan Eligibility Letter (HLE) because of insufficient income or too many dependants relative to income
  • Divorcees with children who may have to wait out the 30 months waiting period after they disposed of their matrimonial HDB flat
  • Buyers who are unable to obtain a bank loan (bankrupts, discharged bankrupts, ever have bad credit history, ever sued for financial debt, loan quantum less than $100,000. monthly income less than $2,000, etc.) – and are also unable to qualify for an HDB loan because of the two-times maximum or inability to meet the second HDB loan requirements of 50% of the previous flat’s sales cash profits and the entire CPF plus accrued interest from the previous sale to be available for the second flat purchase.
  • Those who put their name in their parents’ HDB flat in order to help them buy or pay when they have difficulty to pay their mortgage
  • Those who have to wait out their 30 months waiting period after selling an HDB or private property
  • Those who had their HDB flats compulsorily acquired or were in prolonged arrears on a previous HDB flat
  • Those who have an interest in private property in Singapore or overseas (of as little as 1% share which can come from an inheritance)- who have to dispose of their interest and wait out a 30 months period before they can apply.
  • Those who are over 55 years old who can only use half of their Retirement Account to pay for the HDB flat
  • Unwed single mothers with children

Statistics please? 
Why not give us the statistics as to how many there are in the above categories, especially the second timers’ statistics?
For all the categories that are subject to a 30 months waiting period before they can apply – the total period until their flat is ready may be as long as around 5 to 7 years plus.
Before the BTO system was introduced, we understand that the statistics on how many applicants in total who were queuing for HDB flats was available. Why not resume this practice again?
Same report ends with “demand not met”?
By the way, don’t you find it someone ironic that the subject news report ended with “Resale flat prices have been increasingly attractive for photographer Ted Chen, 30, who was unsuccessful in three Build-To-Order (BTO) applications over two years. Of the declining applicant-to-BTO ratio, he said: “I wouldn’t raise my hopes up because it hasn’t flatlined to a one-to-one ratio yet.”
Does this mean that there may still be many like this Ted Chan, who is still unable to get a BTO flat? So, the demand may still not be satisfied yet?

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