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What Happens When You Can’t Get A Good BTO Flat?

Sometimes, luck just isn’t on your side

 

Recently, we have had some friends sharing with us their Build-To-Order (BTO) journey. Some of them have been successful; others have been trying to get a queue number (or a good queue number) for some time. They are still trying.

The Story Thus Far

Over the past few BTO launches, there have been more sales of balance flat available. For some launches, balance flats even outstrip new flats launched.

Sales of balance flats typically refer to balance flats from earlier BTO sales launches. Since most of these flats are usually under construction, or close to completion, interest from potential buyers is usually higher due to the shorter waiting time.

More often than not, applicants who choose the route of applying for balance flats find themselves disappointed. The reason is simple – everyone else wants one too! Couples who are intending to get married soon do not want to wait 3 or more years for their flats to be ready.

But what can you do to improve your chances? Or what are your options if you can’t get a good BTO flat?

Go For A New BTO Launch Instead Of Balance Flats

The first thing you can do to increase your chances is by applying for flats strategically. Yes, you want a shorter waiting time, but so does everyone else.

Since each couple can only apply for one flat during each launch, what tends to happen is that people end up flocking to apply for sales of balance flats whenever it is available during a launch.

Take for example the housing estate of Bukit Panjang during the May 2016 launch earlier this year.

Units Available Application Received Application Rate
Balance Flats 32 270 8.4
New Flats 918 1710 1.9

 

You don’t need to be a math genius to figure out that your chances of getting a flat at Bukit Panjang would have been a lot higher if you applied for the new flats, rather than balance flats.

Applying for new flats give you a 1 in 2 chance of a successful application. For balance flats, your chances are much lower at 1 in 8.5.

Yes, luck does play a part. That said, there is no harm in improving your own odds.

Expand Your Range Of Choices

Singapore is a densely populated country. Everyone wants an HDB flat in a good location that is close to the city. Housing estates such as Ang Mo Kio, Toa Payoh, and Kallang are always in hot demand.

During the last sales of balance flats in May 2016, the application rates for these estates were as follow.

Estate Units Available (4 & 5 Room) Application Received Application Rate
Ang Mo Kio 39 419 10.7
Toa Payoh 20 585 29.3
Kallang 44 977 22.2

 

If you are one of those who applied for these areas, it’s not bad luck that you didn’t get your choice units; it’s simply bad strategy.

In contrast, you would have almost a 1 in 1 chance of getting a 4-room flat in Sembawang during the same launch. It shows that your chances of getting a BTO flat is largely dependent on the choice that you make, rather than your luck (or lack thereof).

Read Also: Should I Get A BTO Or Resale Flat?

Consider The Resale Market

If you are adamant about getting a flat in a popular estate without having to wait, the only other alternative would be to buy from the resale market.

The resale market works on the principle of willing buyers and willing sellers. And because it’s market driven, the simple concept of supply vs. demand can be applied here.

In mature estates such as Bishan and Marine Parade, there are more interested buyers than willing sellers, hence prices will be naturally high.

Read Also: Why We Bought A Resale Flat

Consider An Executive Condominium (EC)?

According to property consultancy firm OrangeTee, there are currently about 4,010 unsold EC units as of end-April 2016. What this means is that if you want to consider an EC instead, there would be no shortage of available units for you to purchase from.

Typically, there are two types of buyers who would consider ECs

# 1 Couples who earn a monthly income between $12,000 to $14,000

There is an income ceiling of $12,000 for couples who want to apply for a BTO flat. This means that anyone earning beyond that amount would not be eligible to apply for a BTO flat, even if they would like to.

For ECs, the income ceiling is $14,000. Hence, there may be couples that are unable to apply for a BTO flat but can opt for an EC instead.

# 2 Couples that are eligible for BTO flats but prefer ECs

Due to the current availability of ECs in different locations, there might be those who are able to afford an EC and willing to pay for it. Aside from the facilities and the fact that an EC would ultimately convert to a private condominium after 10 years, the waiting time for some of these ECs would also be shorter, compared to applying for a new BTO flat today.

For example, The Amore EC at Punggol is expected to have a TOP date (Temporary Occupation Permit) in July 2017. Skypark Residence EC at Yishun will TOP at the end of this year. Newlywed couples that have yet to find a home and have bigger budgets would find these ECs an attractive option as well.

Read Also: 4 Estates That Have HDB Prices So High That You Can Buy A Condominium Instead

Getting a great BTO number in Singapore has been compared to striking the lottery. At the same time, there is no reason for us to simply rely on good fortune, not when there are other options available that we can consider.

Having similar trouble getting a good BTO queue number? Share your thoughts with us on our Facebook page.

DollarsAndSense.sg is a website that aims to provide interesting, bite-sized financial articles which are relevant to the average Singaporean. Subscribe to our free e-newsletter to receive exclusive content not available on our website. Follow us as well on Instagram @DNSsingapore to get your daily dose of finance knowledge through photos.

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