Saturday, May 24, 2008

HDB Revises Flat Application Rules (part I of III)

Recent launches of Build-to-Order flats have seen an overwhelming number of applications, especially those in mature estates, leading to speculation that there is a shortage of new flats. But HDB said, on the contrary, the bulk of applicants often do not end up making a purchase.

Right. Let's see.
1) The policy change targets first-time applicants.
2) As of my writing this post, after applications opened on 22 May (day before in Singapore time), there are 1226 applicants for 1485 apartments in Compassvale Pearl and Punggol Sapphire. Presumably the demand will be comparable to previous times. I haven't applied for BTO in a while, but the last time I applied for mature estates flats, there were >10,000 applicants.
3) Presumably many of these applicants are first time applicants.
4) There are 1226 couples (mostly first-time? Maybe HDB has some stats they'd like to release to us) watching HDB's site like eagles, waiting for new sites. There will be more applicants, since the application closes on 5 June.
5) Ie, > 1,000 people queueing eagerly for a flat. No shortage? Right.
6) At this moment, another page of the HDB site shows 1691 flats for sale - 1485 under the BTO and the rest for bi-monthly sale. Ahh... 206 flats unsold, including 196 in the wonderful Jurong West locale. Of course there's no shortage.

There's no point talking about shortages versus those unsold flats. As one of those people looking for a flat, I can tell you - the prices of those JW flats are going to have to be much lower before people are going to want to buy them. Any househunter is going to look at a house and compare its value to him and the price he wants to pay for it. Rather than saying that those unsold flats (and the 30% in Coral Spring) reflect picky homeseekers, maybe HDB should look at those unsold flats and ask itself, why those flats can't be sold to 1000 over people looking for homes? Basically, value < price! And part of that crappy value includes things like : far out in the middle of nowhere; lack of facilities; far away from MRT station; 2nd floor above the !#$%^ hawker centre; surrounded by industrial factories; and the list goes on.

Even though JW is sooooo far away, I might move into a JW flat if it was sufficiently lowly-priced. If you have excess goods, slash the price!

Yes, I know the valuers give a price to the flat based on many factors, but if a valuer prices something at $x and no-one wants to buy it at that price, even with HDB subsidies, well that tells me the valuer is wrong!

Put it simply - there's a shortage of HDB flats which new owners find have a higher value than the price HDB is charging. There's a small glut of HDB flats in JW (and presumably the 30% in Coral Spring) which new owners find are lower value than the price HDB charges.

Put it another way - HDB is selling flats, and when it can't sell some of the lousier sets in its collection it calls buyers picky. So to force-sell those units, it's trying to scare first-time applicants that they'll lose their privileges if they reject some of the lousier, unwanted sets they offer up.

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