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HDB introduces the Build-to-order system 15th Apr 2001

On 15 April 2001, the Housing Development Board (HDB) launched its pilot Built-To-Order system (BTO) as the mode of sale for its new flats. The pilot scheme involved 2,500 new flats at four sites at Sengkang and Sembawang. It was fully implemented in January 2002, replacing the Registration for Flats System (RFS).[1] The BTO is one of two ways in which HDB sells new flats, the other being Sale of Balance Flats (SBF).[2]

The property boom in the mid-1990s resulted in high demand for new flats, leading the HDB to build more flats. When the Asian Financial Crisis struck in 1997, demand fell sharply and left the HDB with 31,000 unsold units that eventually took more than five years to sell.[3]

The previous RFS scheme allowed buyers to select the broad geographical zone of their desired flat location. However, the exact location as well as the cost of the flat was only made known when buyers were invited to select their flats. Buyers were unable to predict their flat’s completion date and some buyers did not have means to pay the downpayment when their flats were completed earlier than anticipated. Some buyers were also unhappy with the final location of their flat. The BTO system addressed this by letting buyers know upfront when their downpayment was expected and giving them the flexibility of selecting the location and type of flat desired.[4]

Under the BTO system, potential buyers apply to ballot for a chance to select a flat in proposed sites. Successful applicants then participate in a booking exercise where they can select their preferred location and flat type. A downpayment is required to secure a booking, to ensure that each booking is backed by a committed buyer. After the booking exercise, the HDB assesses the demand for each BTO project and starts construction only if demand exceeds 70 percent. Flats are usually ready for occupation in three years.[5]

One of the advantages of the BTO system is that the HDB is able to build according to real demand.[6] Further, applicants are provided with detailed information on the flats beforehand, which allows them to make informed decisions.[7] However, the disadvantage is that not all applicants will be able to get a flat.[8] The HDB has received feedback from disappointed first-time applicants who were unsuccessful in getting a BTO flat, particularly in mature estates.[9] In response, the HDB has since adjusted the priority system to allow first-time applicants a greater chance in their subsequent ballot as well as increased the number of flats set aside for first-time buyers.[10]

There is a wide variety of BTO flat types available, ranging from studio apartments; 2-room flexi; 3-, 4-, and 5-room flats; and 3Gen flats.[11] There are priority schemes in place to help interested buyers obtain their flats, such as the Parenthood Priority and Multi-Generation Priority Schemes.[12]

References
1. Singapore. Housing and Development Board. (2001/2). Annual report (pp. 6, 10). Singapore: Housing and Development Board. Call no: RCLOS: RSING 711.4095957 SIN-[AR]; Lim, L. (2002, May 19). HDB scraps queue system for its flats. The Straits Times, p.1,; Chua, C. (2001, March 22). Get ready for the where-when-what flats. Today, p. 1. Retrieved from NewspaperSG.
2. Housing and Development Board. (2015, October 6). Modes of Sale. Retrieved on 24 October 2015 from HDB website: http://www.hdb.gov.sg/cs/infoweb/residential/buying-a-flat/new/modes-of-sale
3. Mah, B. T. (2011). Reflections on housing a nation: A collection of commentaries (pp. 29–31). Singapore: Ministry of National Development. Call no.: RSING 363.585095957 MAH
4. HDB’s built-to-order system to start in Q2. (2001, March 22). The Business Times, p. 10.; Tan, C. (1989, June 18). Easier for buyers to pick right flats. The Straits Times, p. 1; Today, 22 Mar 2001 p. 1. Retrieved from NewspaperSG.
5. Mah, 2011, p. 31; Housing and Development Board, 6 Oct 2015.; Fewer HDB flats to be built this year. (2001, August 21). The New Paper, p. 6.; Today, 22 Mar 2001 p. 1; Rashiwala, K. (2001, April 16). HDB build-to-order 5-room flats to cost $206,000--$275,000. The Business Times, p. 8, Retrieved from NewspaperSG.
6. Mah, 2011, p. 32.
7. Mah, 2011, p. 32.
8. Mah, 2011, p. 32.
9. Mah, 2011, p. 33.; Cheam, J. (2009, October 26). What do HDB numbers say? The Straits Times, p. 2. Retrieved from NewspaperSG.
10. Mah, 2011, p. 31.; Cheam, J. (2009, November 17). Higher, 95% of flats reserved for first-timers. The Straits Times, p. 7. Retrieved from NewspaperSG.
11. Fernandez, W. (2011). Our homes: 50 years of housing a nation (p. 61). Singapore: Published for the Housing Development Board by Straits Times Press. Call no.: RSING 363.585095957 FER
12. Housing and Development Board. (2015, September 15). Priority Schemes. Retrieved on 24 October 2015 from HDB website: http://www.hdb.gov.sg/cs/infoweb/residential/buying-a-flat/new/priority-schemes

 

The information in this article is valid as at October 2015 and correct as far as we are able to ascertain from our sources. It is not intended to be an exhaustive or complete history of the subject. Please contact the Library for further reading materials on the topic.

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