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Demand for subsidised HDB rental flats surges

Rise – fuelled mainly by soaring open market rents – has doubled waiting time for those in queue

SOARING rents in the open market are forcing more people to opt for subsidised HDB rental flats, but the extra numbers have doubled the waiting period.

Eligible low-income households now must wait five to 11 months to move into a rental HDB flat, compared with two to six months a year ago.

The pressure had been mounting for some time: In the financial year that ended in March, HDB’s stock of one- and two-room rental flats dropped slightly, but it had to deal with an 11 per cent increase in applications.

Most of the 3,000 or so applicants in the queue now are unlikely to get a home until the first quarter of next year, when the first batch of recently- refurbished flats comes on stream.

Members of Parliament, who have noticed the longer wait among their needy residents, have cited another factor: People who were unable to sell their flats during the property downturn are now offloading their flats to repay debts but find themselves priced out of the hot market.

An MP for Aljunied GRC, Madam Cynthia Phua, said: ‘The alternative is to rent a flat on the open market, but that is increasingly very expensive.’

Rents for HDB flats have shot up in the past year, in some cases by more than 30 per cent.

Families who have recently sold their flats are also caught by a longstanding HDB rule that requires them to wait 30 months after selling their flat before being eligible for subsidised rental homes.

Many turn to their relatives, but Pasir Ris-Punggol GRC MP Charles Chong said: ‘In cases where they have no relatives, or have conflict with the rest of their families, some end up sleeping on Changi Beach, at void decks and so on.’

The HDB allocates subsidised rental flats to families earning no more than $1,500 a month. Depending on their income and whether they have had a previous housing subsidy, they pay $26 to $205 a month for a oneroom flat, and $44 to $275 for two-room flats.

These rates are far lower than in the open market, where the median monthly rental for a two-room flat in Queenstown in the July to September period was $800.

The squeeze on rental flats is hitting applicants like Ms Jannath, 41, hard. The former cleaner, who has no savings, sold her four-room flat a few months ago to help pay for her unemployed husband’s medical bills.

The HDB helped her in June by waiving the 30-month waiting debarment period for a rental flat.

Her family must leave its four-room flat by Dec 5, but the waiting list for rental flats has meant that she has yet to get one.

Ms Jannath told The Straits Times: ‘They can give me (a flat) anywhere…I just want a shelter for the three of us.’

In March, the HDB was managing about 42,000 one- and two-room rental flats, with about 95 per cent occupied. More are coming on stream from next year.

The Board is converting three blocks in Boon Lay and Woodlands into 938 rental units expected to be ready early next year. Next year, it will also convert two blocks in Redhill to about 290 rental homes and build 976 units in Choa Chu Kang, Sembawang and Yishun.

The stock is more limited on the open market, with only about 16,000 rented out.

The HDB said: ‘HDB rental flats are…limited in stock. They are meant for poor and needy households…Those who can afford to buy or rent from the open market, as well as those with family support, should not turn to rental flats…and compete with more needy families.’

 

Source: The Straits Times 30 Nov 07

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