BTO Flat Buyers Delaying Collection of Keys to Sell Existing Property

9 Mr Zaqy Mohamad asked the Minister for National Development since 2016 (a) whether there has been an increase in the number of BTO flat owners asking to delay the collection of keys or for a waiver of payment of holding interest because of difficulties in selling their existing property and, if so, what is the increase; (b) how many of such owners have had to cancel their BTO flats and forfeit deposits despite HDB exercising flexibility; and (c) what are the top reasons for those whom HDB have been unable to assist in such situations.

The Minister for National Development (Mr Lawrence Wong): Madam, between 2016 and the first quarter of 2017, less than 2% of Build-To-Order (BTO) flat buyers invited by the Housing and Development Board (HDB) to collect keys to their booked flats had asked for a deferment due to difficulties in selling their existing flats. Over this period, we have not observed an increasing trend in the proportion of such cases.

For these buyers, HDB already exercises flexibility and grant a reasonable time extension. The vast majority were able to sell their existing flats and complete the new flat purchase. However, a minority, or 45 buyers in particular, eventually opted to cancel their new flat bookings, pay the forfeiture and continue living in their existing flats. The main reasons for their cancellations include changes to the buyers' overall financial circumstances or they no longer wished to proceed with the new flat purchase for their own personal reasons.

Flat buyers are advised to exercise prudence in their flat purchase. If they plan to finance the new flat purchase with the sales proceeds from their existing flat, they should take into account possible changes in market conditions which may affect their plans and be realistic in their asking prices. In addition, they can make use of HDB's regular updates on the Probable Completion Date of their new flats to plan the sale of their existing flat.

Mdm Speaker: Mr Zaqy Mohamad.

Mr Zaqy Mohamad (Chua Chu Kang): I thank the Minister for the explanation and clarification. Two things. I just want to clarify whether 2% of the total number of flat applications is against the total number or is it just those who purchase from a resale flat before. A number of cases I have come across were that they were all caught because of the slow resale market right now. Some have difficulty paying the cash that they have to top up. Is there a possibility for HDB to exercise more leniency because I understand that sometimes the holding costs are quite high, at a few hundred dollars? At the same time, can we also protect buyers through better credit modelling, knowing that the market could tank after a certain period because BTO flats do take some time to complete?

Mr Lawrence Wong: Madam, to clarify, the 2% refers to this: over the course of 2016 and the first quarter of 2017, we invited several thousand people to collect their keys for their new BTO flats. Two percent of the people we invited to collect their keys appealed to defer their key collection. And of that number who appealed to defer their key collection, 45 eventually opted to cancel their new flat bookings. So, that is to clarify on the statistics.

On the assistance we can provide to such people who are in difficulties, on a case-by-case basis, in fact, as I have mentioned, HDB already exercises flexibility and grants time extension. For the most part, most of them are able to sell their flats and then complete their new flat purchase transaction, but there is that minority who chose not to. Even for that minority who chose not to, if there are financial hardships, we can look at the particular case at hand and waive the forfeiture that they have to pay.