Wednesday 18 December 2013

HDB to bump up supply of smaller flats next year

By Janice Heng, The Straits Times, 17 Dec 2013

THE supply of larger flats will shrink next year, but more smaller units will be offered, said National Development Minister Khaw Boon Wan.

There will be fewer three-room, four-room and five-room flats as the Housing Board slows down after three years of ramped-up supply.

But more two-room flats and a "steady stream" of studio apartments will be offered, he said yesterday in a blog post.

The reason, he said, is varying demand between families and singles for the Build-To-Order (BTO) flats.

Singles were first allowed to apply for new flats in this year's July BTO launch, and there were 58 of them chasing each available flat. It came down to 27 for each unit last month.

"Being a new housing scheme, the application rates for singles were especially high," said Mr Khaw, who had announced the reduction of BTO supply earlier this month.

In contrast, demand from families has largely been met. Three years of bumper BTO launches have "cleared much of the backlog" of such applicants, he said, noting that the housing market has stabilised.

There were 2.4 first-timer applicants for each available flat in January, falling steadily to 1.3 per flat last month. For second-timers, the rate fell sharply from 14.9 to 2.7 over the same period.

As for studio apartments, demand stabilised at an average of 2.1 applicants per unit this year.

This data "will help shape our housing taper for 2014", he said, adding that exact details will be finalised and announced soon.

For two-room flats, the plan remains to offer 5,000 next year, as announced in September. This is about twice as many as this year.

Offering fewer large flats makes sense to avoid over-supply, said PropNex chief executive Mohamed Ismail Gafoor.

But he and other experts said more could be done to tackle the differences in demand.

Half of all new two-room flats could be made available for singles, up from 30 per cent now, said ERA Realty key executive officer Eugene Lim.

And more larger flats could be allocated to second-timers and single parents, said SLP International Property Consultants head of research Nicholas Mak.

But some buyers are concerned about getting a flat with the slowdown in supply.

Industrial designer Seth Yang, 26, was unsuccessful when he applied for a four-room flat with his girlfriend earlier this year. The first-timer plans to try again next year, but the upcoming slowdown has lowered his hopes: "It feels like we'll have less of a chance."

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