HDB to build more new flats for first-timers: Mah Bow Tan

Source : Channel NewsAsia – 25 Jul 2010

National Development Minister Mah Bow Tan said more new HDB flats will be built for first-time applicants, so as to relieve the pressure on the resale market.

He said this at a grassroots event celebrating the HDB’s 50th Anniversary on Sunday.

It is the last leg of a series of events HDB has been conducting in the heartlands.

The “Storeys of Our Homes” exhibition celebrates 50 years of public housing.

And with HDB resale flat prices hitting new highs recently, causing cash-over valuation (COV) to go up, Mr Mah made the promise to push out enough flats for first-time home buyers.

His advice for them is to go for new flats, where there is no COV.

“What HDB is going to do is to build more new flats for first-timers, so this will help take care of the first-timer market, and that will help to reduce some pressure on the resale flat market. So over time, the resale flat market will stabilise. I think at this point in time, there is still an imbalance,” said Mr Mah.

Mr Mah expects HDB to offer a record number of some 18,000 new flats this year.

Of these, 16,000 will be from the Build-To-Order (BTO) exercise.

And he said 95 per cent of the new flats will be for first-timers, while the remaining 5 per cent of new flats will be for second-timers.

“It is the second-timers, upgraders and downgraders who have to go into the secondary resale flat market,” Mr Mah said.

He continued: “If you are a first-timer buyer, there’s more than enough flats for you. But if you are a second-timer, obviously you have to compete in the market with the first-timers and others.

“This equilibrium in the prices will be reached at some point in time in the medium term as we push out this supply. So I would expect in another year or so, it should be able to stabilise everything.”

Mr Mah added demand for flats depends on the economy.

Singapore’s economic growth was strong in the first half of the year, but it may slow down in the second half.

However, he said three years is the “norm” waiting time for new flats.

Those who do not want to wait have other options, such as resale flats. But he added this is one reason resale flats are more expensive, as the “cost difference reflects the time difference”.