HDB to allow singles into BTO balloting game

HDB 2-Room Flat

Your lottery winning prize

As promised quite some time ago, Minister Khaw Boon Wan announced yesterday that singles will be able to buy flats direct from the HDB starting with the next BTO exercise in July. Welcome to the great national lottery!

While many have been clamouring for this for so long, the news has so far been greeted with muted response. The cheers were dampened by the qualifying criteria and flat size restriction. The age restriction of 35 remains, which is to be expected, and income must be $5,000 or less. Also, singles are only eligible for 2-room flats.

Personally, I’m not surprised by the flat size restriction, having written a few months back about the surplus of such flats the HDB is sitting on. It makes perfect sense to satisfy the needs of some singles while at the same time help to clear up its inventory. The alternative is to stop building these flats altogether, but perhaps the HDB feels the need to have at least a certain number of it. Given HDB housing blocks’ homogeneous designs, they probably can’t build such 2-room units on one floor without having them on every other floor as well.

Some people are asking why only 2-room flats? Who would want to live in such small flats? But if singles are allowed to compete with limited 4-room and 5-room flats, you start getting complaints from the couples. So I think restricting to 2-rooms is fair when there is still a demand backlog. As for the size of the flats, I reckon 45 square metre or so is more than enough living space for a single person.

Others are asking why limit income to $5,000? The current income ceiling is $10,000 for a couple, so it’s simply halving that for singles. If you increase the ceiling to, say, $7,000 for singles, the couples will be asking why then isn’t the ceiling $14,000 for them.

So all in all, the rules are reasonable even if not fantastic. One thing we see from this announcement is that you can’t satisfy everyone. But it is still early days and the government could tweak these rules as they go along. The question now is how many singles out there are both eligible and keen on these flats?

I have yet to see any information on the minimum occupation period (MOP), but I would assume five years applies as well (this is not necessarily a given since there is no MOP for 1-room flats). As I mentioned in my earlier post, this could potentially put off many singles who has the intention to marry. If you are 35, you could be stuck with a 2.5-year wait and a 5-year holding period, so you will be 43 by the time you are allowed to dispose of your flat. We may expect further policy changes to allow such singles to dispose of their flats earlier should they marry, but they must have kids because that’s the all-important deliverable to the government!

There was also no mention of whether this counts as the precious first bite of the public housing cherry. Should it, or shouldn’t it? There may be split views on this, but it would probably count.

The announcement that should bring greater cheers is that the recently launched Parenthood Provisional Housing Scheme is now open to expectant parents, and will be extended to all married but childless couples from next year. This is great news for all couples who have more urgent need for a flat. They won’t be forced to turn to the very expensive resale market, nor pay market rate rentals that aren’t cheap as well.

But it is said that there are only 200 applications to the Parenthood Provisional Housing Scheme so far, even though the HDB has over a thousand such flats available. A case of simply not many married couples with kids but no flats? Or a stigma against rental accommodation as I wrote in another post last month?

Would you go for these rental flats?