SINGAPORE: Prevailing market conditions may affect prices of new HDB units offered under the Sale of Balance Flats (SBF) exercises, said National Development Minister Lawrence Wong in Parliament on Tuesday (Feb 7).
He was responding to a question by Workers' Party chief Low Thia Khiang on the pricing mechanism of units under Build-To-Order (BTO) and SBF exercises and why prices could differ for the same flat in different exercises.
Mr Wong explained that prices of balance flats may be slightly higher as they are closer to completion. The prices may also be updated if there is a change in prevailing market conditions.
"For example, when the price of comparable resale flats in the vicinity have softened since the time of the BTO launch, the prices of balance flats may be lower than their original BTO prices," said Mr Wong.
This has been HDB's practice all along, the minister stressed. "I think that's fair to all home buyers because the transaction is done at the point of sale,” he said. “And so if the market has come down, then we charge it at a slightly lower price. And this is not a new practice. We've been doing it all this while."
SBF launches give buyers the chance to apply for balance flats from earlier BTO exercises.
Mr Wong also revealed that between 2012 and 2016, two in five applicants who had been selected to choose a new HDB flat did not proceed to do so.
The top three reasons were that their preferred units had been taken up, they wanted to apply for flats in other sales exercises, or they had changed their minds and would like to consider other housing options, he said.
Mr Wong was responding to a question from Member of Parliament Gan Thiam Poh, who wanted to know what the rate of rejection was by applicants invited to select a flat under the BTO and SBF exercises.
Mr Wong added that HDB shortlists applicants up to three times the flat supply. The average time taken to complete the selection of flats in a BTO exercise is around six months, while it takes about 10 months in an SBF exercise.