Shortening Waiting Time for HDB BTO Flats in Support of Marriage and Parenthood Objectives

7 Ms Denise Phua Lay Peng asked the Minister for National Development to encourage marriage and parenthood, whether the Government will consider (i) advance construction of more HDB BTO projects to shorten the waiting period of first-time applicants and (ii) extension of the Parenthood Provisional Housing Scheme to couples awaiting their BTO flats and whose household income is between $7,000 and $14,000, instead of only to those earning $7,000 and below.

8 Ms Foo Mee Har asked the Minister for National Development what specific measures can the Government implement to shorten the waiting time for new HDB BTO projects to less than three years going forward.

The Minister for National Development (Mr Desmond Lee): Mr Speaker, may I take Question Nos 7 and 8 on today's Order Paper together, as both relate to Build-to-Order (BTO) flats with shorter waiting times?

Mr Speaker: Please do.

Mr Desmond Lee: Thank you, Sir. Since 2018, HDB has been offering BTO flats in some projects with shorter waiting times of around three years or less. This is achieved by bringing forward the construction works for specific sites that are ready for development. To date, close to 11,000 BTO flats with shorter waiting times have been offered, of which around 7,200 were offered between 2020 and 2022, that is, during the pandemic.

The pipeline of shorter waiting time flats has been impacted during the pandemic due to construction delays and disruptions as well as higher BTO demand.

To meet the strong housing demand, HDB has ramped up the supply of BTO flats to 23,000 flats per year in 2022 and 2023, or a 35% increase from last year, and is also prepared to launch up to 100,000 new flats from 2021 to 2025, if needed. Where possible, we also endeavour to launch more BTO projects with shorter waiting times, subject to site and infrastructure readiness.

While waiting for the completion of their new flats, most flat buyers continue to stay with family members or relatives, or rent on the open market. The Parenthood Provisional Housing Scheme (PPHS) provides an additional temporary housing option for eligible households.

Given the limited supply of PPHS flats, the income ceiling of $7,000 was introduced in August 2021, along with some other criteria, to prioritise those who are less able to afford renting on the open market. The income ceiling of $7,000 is pegged to the typical income ceiling for 3-room BTO flats in the non-mature estates. It is also well above the median monthly household income of PPHS applicants, which was $5,700 before the income ceiling was introduced and $4,400 in the past year since the income ceiling was put in place.

While we are on track to double the supply of interim flats for PPHS between 2021 and 2023, the supply remains limited. As such, we will retain the income ceiling so as to continue prioritising those who are less able to afford renting on the open market.

Households whose incomes exceed the $7,000 ceiling but who need help with temporary housing due to exceptional circumstances, such as high medical expenses or other needs, may approach HDB. HDB will consider their requests on a case-by-case basis.

Mr Speaker: Ms Denise Phua.

Ms Denise Phua Lay Peng (Jalan Besar): I thank the Minister. My questions are directed towards promoting the national objective of marriage and parenthood. Would MND consider, one, a different type of BTO, a "Build-then-Order", instead of Build-to-Order scheme, so that flats can be built in advance for registered married couples, for example, applying for the first time, in order to encourage marriage and parenthood?

I know that building in advance creates stock inventory and it might be costly, but if we could ringfence this for marriage and parenthood, on which the nation is already spending quite a bit of money, it might be well worth it. So, that is my first supplementary question.

My second supplementary question is whether the Minister would consider helping young couples beyond the "between $7,000 and $14,000" bracket, which is the eligibility for applying BTO flats, to help them get a rental flat on an interim basis. This is, again, based on what we know about the market that many young couples are renting flats before they get their BTOs. If they live with their parents, they might also be delaying parenthood. So, again, all the questions are directed towards promoting marriage and parenthood. For consideration, please.

Mr Desmond Lee: Mr Speaker, the Member asked for a "Build-then-Order" model. In fact, I have just described the shorter waiting time model which has been in place since 2018, where we launch construction and then launch the project. So, as a result, applicants can get their flat under three years. The construction disruptions and delays during COVID-19 had affected some of that pipeline. Nevertheless, as I have said, even during COVID-19, we launched some 7,200 shorter waiting time flats from 2020 to 2022. We will work towards launching more of such shorter waiting time flats, with waiting times of three years or less, subject to site and infrastructure readiness. That is something we are committed to do.

But in addition to that, we have the Sale of Balance Flats exercise and the Open Booking of Flats exercise by HDB, and, of course, resale flats, which are available with grants for eligible buyers. And at this point in time, while resale prices have gone up, with measures to moderate demand, we hope to manage the price increases in the resale market as well to ensure affordability for first-time home buyers.

As for the Member's request to raise or remove the income ceiling for PPHS, I have explained earlier why we need to maintain this for the time being. Demand has been high, particularly because of the construction delays caused by COVID-19. We recognise that there are housing needs – HDB is prepared, even if the income ceiling is above $7,000, to look at individual circumstances to see how we can help them.

We will double the supply of PPHS flats by the end of this year and early next year. But supply remains limited. We have been using some of the SERS units, some of the unsold units, we have also taken some rental flats – and you see there is a trade-off there – we have also taken over staff apartments from the Polytechnics and repurposed them for PPHS during this period.

So, to provide support for those who may have even greater difficulty affording rental in the interim, we maintain the income ceiling as well as the priority for married couples with children below the age of 18.

Mr Speaker: Ms Foo Mee Har.

Ms Foo Mee Har (West Coast): Thank you, Speaker. I would like to ask the Minister two supplementary questions. The Minister just alluded to HDB's attempt to complete within three years. Can the Minister give some guidance exactly what percentage of future launches will likely fall within the three-year timeframe, just so to give us a guidance?

Secondly, given the increasing risks around supply chain disruptions due to geopolitical tensions, I would like to ask the Minister to comment about the strategies the Government would adopt to build stockpiles of building materials to avoid delays and how the Government intends to buffer against price variations.

Mr Desmond Lee: I thank the Member for her questions. HDB's mission remains the same even through COVID-19 and even as we continue to deal with the after-effects on the construction sector and on development of properties in general arising from the last two years' pandemic. In fact, to ensure affordability and accessibility, we have been doing a couple of things.

Firstly, by increasing subsidies to ensure that BTO flat prices remain stable, even amidst the property price increases across the board.

Secondly, we have been ramping up the supply of flats, as mentioned, the ramp-up of BTO supply between 2021 and 2025 of 100,000 flats, if necessary.

Thirdly, in August this year, we channelled an even greater percentage of the BTO stock towards first-timer home buyers. We have also put in property cooling measures to moderate demand in the resale market.

Lastly, of course, is tackling the issue of construction delays. HDB has been working very closely with the contractors and their supply chain to manage overall construction delays and there has been progress made on that front. We need to expedite construction, but will do so safely and without compromising the quality of flats.

The Member alluded to supply chain disruptions. In fact, in the last two years, HDB and all developers and contractors have been affected by supply chain disruptions because a lot of materials come from abroad – construction material, parts and even manpower to help us construct. And during the pandemic and emerging from COVID-19, HDB continues to work very closely with our contractors, helping them to obtain the manpower that is necessary, helping them to stabilise prices of steel and concrete through HDB's schemes to support the contractors, and working very hard with our local supply chain to ensure greater domestic resilience, whether by stockpiling offsite, stockpiling in Singapore or working more closely with our prefabrication plants to have the capability to churn out more components for HDB flats. Through standardisation and good design, we can achieve that.

Recently, in the HDB awards, I announced more efforts by HDB to try out new methods of construction that will allow it to drive even greater productivity and, hence, be more resilient to supply chain disruptions that may come in the future.

As for the Member's question about the percentage of shorter waiting times for flats, as I have said earlier, we have delivered 7,200 over the last two years. There has been an impact because BTO demand has been high and also because there have been disruptions to construction. And we work hard to raise the quantum of shorter waiting time flats even as we continue to grapple with the after-effects of COVID-19.

Mr Speaker: Mr Murali Pillai.

Mr Murali Pillai (Bukit Batok): Mr Speaker, Sir, I would like to ask a supplementary question of the hon Minister in relation to the PPHS supply. The Minister mentioned that the supply is still quite tight. The Government's decision to double the PPHS units is most welcomed. My question is in relation to the number of applicants who satisfy the current criterion of salary ceiling of $7,000 or below. How many people who satisfy the salary ceiling still cannot get the PPHS units and what options are there for them?

In this regard, I had, in my Question No 38 set down in the Order Paper for today, made two suggestions. One is in relation to support for applicants who cannot rely on their families to get rental flats from the public rental market. The other one is in relation to some form of grant to enable them to get the rental flat on their own.

Mr Desmond Lee: I think the Member has asked a question which is actually further down the line. But, since he has already asked it, I am just wondering whether to wait till then or give him a sneak peek into the answer I am going to give him.

Since August 2021, 1,930 families were eligible for PPHS and had applied for the scheme. About 580 of them were invited to select a PPHS flat, of whom about 330 selected and were allocated such a flat and 250 did not select a flat when invited to do so, which suggests that they did not like the options that were made available to them or they had other housing options. The remaining 1,350 applicants were unsuccessful in their ballot.

Both prior to the imposition of the income ceiling and the other measures and, even now, with the measures in place, on average, we see about 47% of PPHS applicants who decided not to make a selection when they are invited to do so. But, of course, that means others further down the queue will then be invited and that ensures that the flats are occupied.

Mr Speaker: Mr Vikram Nair.

Mr Vikram Nair (Sembawang): Sir, I thank the Minister for the answers to many of the burning questions that are being faced by people looking for HDB flats.

One suggestion I had previously made was to look at the supply of resale flats and how we can have more of that in the market because, with more resale flats in the market, that would lower the retail price and, hopefully, get more first-timers looking to the resale market. And the suggestion I previously made was to look at reducing or waiving the Minimum Occupation Period (MOP) period for resale flats.

To be fair, I think the answer I was given then was that that may not be a viable solution because those who sell resale flats will go back into the market. So, would the Minister consider waiving or reducing the MOP for those who sell resale flats but do not intend to go back into the market, say, for those who are moving to stay with their children or maybe even upgrading to private property?

Mr Desmond Lee: The MOP is intended to reinforce the owner occupation intent for public housing. Whether it is five or 10 years or somewhere in between, we have to strike a balance because, ultimately, there is a minimum period where you need to occupy your flats. And then, people's life stages may change. With children on the way, they may need more space, they may need to move closer to a school or they may have other arrangements.

So, when people need to sell their flats within MOP, generally, we do not waive, but we do look at individual requests on a case-by-case basis to understand the circumstances they face in deciding whether to grant the waiver of MOP or not. And, in fact, that will, in a way, serve to cater to the groups of people who need to move during that period.

But whether we will do so in order to increase the supply of resale flats in the market, I am not quite so sure. When you shorten the MOP, you may see that there will then be demand in other parts of the market.