Monday, July 18, 2011

Better to release more BTO flats per launch

National Development Minister Khaw Boon Wan on Monday said the key is to push out more flats per launch and a wider range of units, so that buyers are less likely to face the disappointment of being unable to select a flat.

Making his first official visit to the HDB Hub in his capacity as National Development Minister, Mr Khaw spoke with flat applicants to understand their concerns. Affordability and availability of flats were some issues that came up.

One applicant said: "We heard from a lot of friends who said that maybe you would be rejected by HDB a few times."

Writing in his blog on Sunday, Mr Khaw said that based on earlier Build-To-Order (BTO) project launches, almost all applicants get a chance to select a flat, if a project has about two applicants per unit offered. This, as almost one in two successful applicants drops out during the selection process. However, the chance of selection drops when the subscription rate rises. The solution is bigger launches.

Mr Khaw said: "Previously, when HDB released a small launch, in fact it is worse. Each time you release a few hundred units, everybody would rush for those few hundred units, and many will get disappointed for sure. That is why I move away from monthly launch, and do a combined launch.

"I do not think we would do any in August. I am trying to combine with September to have a bigger launch, so 4,000 units, or even bigger units...I think that will do a lot to calm the market and reduce disappointment."

Mr Khaw also dismissed talk that BTO flat prices have dropped significantly since he took office.

Prices for units launched this month started from S$137,000 for a three-room flat, S$217,000 for a four-room flat and S$274,000 for a five-room flat. The starting prices were S$166,000, S$264,000 and S$335,000 for the same flat types in May's launch of 4,000 new flats. Mr Khaw said many factors are at play, including location.

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