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Just days into his new job as National Development Minister, Mr Khaw Boon Wan has instructed the Housing and Development Board (HDB) to build flats “ahead of demand” – a significant change in policy from the “Build To Order” (BTO) approach which has been in place for the past 10 years.

Mr Khaw’s announcement coincided with HDB’s launch of six BTO projects – the largest number launched at once. In addition, he confirmed that the number of BTO units this year would be increased from 22,000 to 25,000 units, by bringing forward projects scheduled for early next year.

Writing on his blog “Housing Matters”, Mr Khaw said: “Given robust demand, I told them proceed to build, knowing that the orders will definitely come.”

While his approach may appear to be one shunned by his predecessor Mah Bow Tan, Mr Khaw made it clear that the directive to “build ahead of demand” would only apply to “this period of demand backlog”.

Under the Registration for Flat System in the ’90s, the Government was building some 30,000 flats annually. But the system had its flaws, with Mr Mah saying on numerous occasions in Parliament that it was difficult to discern how much of the demand was genuine.

At one point, the Government was left with 31,000 unsold flats and it took the HDB five years to clear its stock of unsold flats.

Mr Khaw said the Government could return to the BTO approach “after we have stabilised the situation”.

The six BTOs would bring 4,000 flats into the market, in Tampines, Punggol, Pasir Ris and Woodlands.

Welcoming the news, Mountbatten Member of Parliament Lim Biow Chuan said it “shows that policies must adapt along the way”.

“While a number of MPs had suggested to Mr Mah to build a buffer stock of flats, Mr Mah had been ‘cautious’ as he had been questioned many times in Parliament over the excess supply of unsold flats,” Mr Lim said.

ERA Realty Network’s key executive officer Eugene Lim noted that the move would also allow Singaporeans to take possession of their flats faster.

Property firm Cushman and Wakefield’s vice-chairman Donald Han said HDB prices would be “affected if there is an oversupply” but demand would still remain in mature estates. “Market demand is very picky, people want good locations and good choices,” he said.

With the HDB planning to ease the S$8,000 income ceiling on flats -something hinted by Mr Mah during the General Election – Mr Khaw also pledged to “sustain the new pace of building” into next year in anticipation of strong demand.

He said: “One priority is to help young couples own their own homes as soon as possible, so that they can start their family and have babies. This is a national priority – promoting marriages and births – and MND must facilitate it to its best ability.”

There are some 15,000 first marriages among Singaporeans annually and 70 per cent of new couples get their first homes through the BTO system.

Source : Today – 28 May 2011