Discussion: What Happens When Your BTO Flat Gets Delayed

The pandemic has affected several industries with the issues on foreign labour, safe distancing measures and outbreaks. Among those industries, the construction sector has been one of the hardest-hit industries.

This has led to delay in projects across the construction sector, including Build To Order (BTO) projects. Presently, the average wait time has since extended from 3 to 4 years to 4 to 6 years. With increasing housing needs to be met and a fixed housing supply, some BTO owners are turning to the rental and even resale market for housing solutions.

Taking a deep dive into this topic, the DollarsAndSense team sat down together to have this lively discussion on The DollarsandSense Podcast with our Business Editor, Dinesh Dayani, as the host, Managing Editor, Timothy Ho, and Editor, Angela Koo. If you are interested, you can listen to the entire episode below.

Here is a transcript of the discussion, edited for clarity.

Read Also: Why It Doesn’t Make Financial Sense To Give Up Your HDB BTO Flat Due To Construction Delays

Renting During BTO Construction Delays

Dinesh: “Let’s say you don’t go for a subsidised rental flat. You could pay slightly higher at the market rate and get an older four-bedroom flat. You don’t have to go for prime HDBs or even private property rental. You can get an affordable rental and wait it out until your Eunos Court BTO flat is ready. You may pay slightly higher but then again, you’re sitting on paper gains. So, maybe that might offset in a few years.”

Angela: “I say it depends on your living situation. Some Singaporeans can afford the rental, which is what I think more Singaporeans are doing. They might choose to move out and pay the rent, but it depends on your personal situation.”

Tim: “So, if you are looking to rent as a short term solution, there are other problems that might arise as well. The first problem is that you also don’t know exactly how long do you need to rent? Is it one year? Is it two years? That puts an element of uncertainty of what the rental period would be.

Renting is definitely an option, whether it’s from the market or HDB. However, this kind of temporary solution for housing comes at a cost and it is not the permanent solution people are looking for.”

Odds Of Getting A Rental Flats

Angela: “Realistically, the odds of getting a rental flat it’s really low, I think right now they have like 300 units available with plans to double. So that’s about 600 to 800 units at most. If you thought that the HDB BTO flats are oversubscribed, you haven’t looked at the subscription for the rental flats. Because 800 flats are not enough for the number of people in a single HDB launch. A single launch in one estate is easily over a thousand units. Plus, in a year, there are four BTO launches, and each launch can easily be four to seven estate projects.”

How Big Of An Impact Do You Think Minimum Occupation Period Should Be In Consideration?

Tim: “I think it may be even more so than we think. For most Singaporeans, when you first got your BTO flat in 2017 you may not have any kids but now you may have two kids. By the time you are done serving your MOP, maybe your second kid would be in Primary 1 if you don’t get your keys soon for your BTO flat.

So, I think it is going to be a factor. Many parents may want to try to live near a school where their kids may get priority for entry. And if your kid is already going Primary One, then you can’t sell your flat and choose to buy a resale flat near an area you wanted your kids to attend school at.

Most Singaporeans purchase their first homes in locations that may never be their first choice in the first place. They just happened to be an “okay location”. The government always encouraged Singaporeans not to be so choosy, especially with our BTO flat so I can see why. However, once you have kids and they’re going to primary school, that becomes a real issue, a real challenge, especially if you’re still serving MOP and you can’t sell.”

The Discussion Continues – With You

Listen to our full podcast episode as we also share our thoughts on one of the comments left on our article – Why It Doesn’t Make Financial Sense To Give Up Your HDB BTO Flat Due To Construction Delays.

If you have a topic you’d like the team to cover next, drop us a message at [email protected].

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