How HDB's new penalty is changing the BTO flat game

Have you ever held a seat for a friend in a crowded food court?

You know, the type of buddy who tells you "I'll come back in a few minutes," so you chope their seat despite the grumbling of people standing around, waiting for a seat. 

Then you wait. And wait. And feel more like a jerk each passing minute, as a whole host of people who need the seat glare at you. 

But your buddy comes back half an hour later, and says "Let's go, I'm not hungry after all." And you need to quickly rush off, because the people you deprived of a seat look ready to stick their chopsticks in your eyeballs.

It's kind of been that way with HDB and BTO launches.

As it turns out, a lot of people have been applying for flats just to try their luck; then backing out at flat selection. They weren't all that serious to begin with, they just wanted to "chope" their place while they browsed for better options. Never mind if it deprives someone else of a flat, because hey, they'd do it to me too. 

We can see how prevalent this attitude is from the October 2023 launch. Now that there are penalties for forfeiting your flat at selection, BTO application rates have dropped faster than my IPPT scores after I turned 38. There were a mere 9,800+ applicants, compared to over 20,000 in February this year; and this is despite Kallang/Whampoa being on the list. 

It just goes to show: balancing out the supply of flats isn't just about birth rates and numbers of units. Psychology and a keen grasp of crowd mentality also play a role. If there's one thing our government understands well, it's that housing issues seem to be 80 per cent mind games, and 20 per cent actual math. 

Maybe we should have more penalties, for those who apply without serious intent. If anyone forfeits at flat selection, they don't just become second-timers: they need to do community service, and become mediators between the most annoying neighbours in any block. That ought to drive home a message about being considerate. 

Meanwhile, I see some people are still trying to list flats that haven't fulfilled the MOP

We had two cases of this in the news, with agents listing flats that hadn't been physically occupied by the owners. Just to clarify:

The MOP is not just about the duration of ownership. You also have to live in the flat for the duration of the MOP. So if you owned the flat for five years, but didn't live in it for one year (e.g., you were abroad), then your MOP would effectively end after six years. 

Still, some sellers are willing to try their luck, and hope HDB won't notice they haven't actually been residing in the flat. But what's bewildering is that they somehow find property agents who are willing to help them. It's really amazing. 

But then I read about the penalty imposed, and then I sort of got it. A fine of $1,000 and $500 respectively, for the two cases. 

I mean, look, a $1,000 fine will stop me from chucking a Yeo's packet drink on the sidewalk; but it's barely a disincentive when the potential payoff is $8,000 to $10,000 (assuming around two per cent of a $400,000 flat.) 

Maybe the penalties need more bite, is what I'm saying.

Weekly sales roundup (Oct 2 – Oct 8)

Top 5 most expensive new sales (by project)

Top 5 cheapest new sales (by project)

PROJECT NAME	PRICE S$	AREA (SQ FT)	$PSF	TENURE
THE ARDEN	$1,214,000	657	$1,849	99 years
THE MYST	$1,539,000	700	$2,200	99 years
THE SHOREFRONT	$1,560,000	883	$1,767	999 yrs (1937)
MIDTOWN BAY	$1,644,400	484	$3,316	99 yrs (2018)
LENTOR HILLS RESIDENCES	$1,665,000	721	$2,309	99 years

Top 5 most expensive resale

PROJECT NAME	PRICE S$	AREA (SQ FT)	$PSF	TENURE
CAMELOT BY-THE-WATER	$6,710,000	3035	$2,211	99 yrs (1996)
OCEAN PARK	$5,270,000	3261	$1,616	FH
RIVERGATE	$5,150,000	1776	$2,900	FH
THREE THREE ROBIN	$4,350,000	1948	$2,233	FH
YGK GARDEN	$4,280,000	2067	$2,071	FH

Top 5 cheapest resale

PROJECT NAME	PRICE S$	AREA (SQ FT)	$PSF	TENURE
THE TAPESTRY	$723,000	474	$1,527	99 yrs (2017)
KINGSFORD WATERBAY	$730,000	484	$1,507	99 yrs (2014)
STUDIO8	$800,000	538	$1,486	FH
RANGOON 88	$820,000	581	$1,411	FH
10 SHELFORD	$840,450	431	$1,952	FH

Top 5 biggest winners

PROJECT NAME	PRICE S$	AREA (SQ FT)	$PSF	RETURNS	HOLDING PERIOD
CAMELOT BY-THE-WATER	$6,710,000	3035	$2,211	$1,930,000	15 Years
KING’S MANSION	$3,050,000	1604	$1,902	$1,460,000	20 Years
BISHAN PARK CONDOMINIUM	$1,780,000	1292	$1,378	$1,320,000	11 Years
RIVERGATE	$5,150,000	1776	$2,900	$1,300,000	17 Years
THREE THREE ROBIN	$4,350,000	1948	$2,233	$1,250,000	4 Years

Top 5 biggest losers

PROJECT NAME	PRICE S$	AREA (SQ FT)	$PSF	RETURNS	HOLDING PERIOD
1 DRAYCOTT PARK	$2,278,000	732	$3,112	-$360,000	0 Years
55 DEVONSHIRE ROAD	$1,120,000	506	$2,214	-$148,600	13 Years
2 GILSTEAD ROAD	$1,700,000	775	$2,194	-$80,000	13 Years
10 GOPENG STREET	$2,380,000	1119	$2,126	-$46,700	13 Years
88 RANGOON ROAD	$820,000	581	$1,411	$6,021	13 Years

Transaction breakdown

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This article was first published in Stackedhomes.