Build-To-Order (BTO) projects are usually the first step for Singaporeans when it comes to owning a home.
But with it comes a long wait time of about four to five years.
Some of us may have also heard horror stories of couples waiting for a whopping seven years.
With wait times already this long, delays only make matters worse.
But, should we be pointing fingers?
In this article, we will be exploring the causes of BTO delays, what is being done to help those affected and what we can expect going forward.
Sengkang BTO Delay
The most recent delay affects buyers of the Anchorvale Village BTO project in Sengkang.
Here’s what happened.
The Anchorvale Village BTO was launched in November 2017 with an expected completion in Q1 2022.
After a series of delay announcements from the Housing Development Board (HDB) since 2020, the completion date will now be pushed back more than a year to May – July 2023 .
Causes of Sengkang BTO Delays
The Sengkang BTO delays boil down to two main factors, the pandemic and tough weather conditions.
Before we get our pitchforks out, let’s not forget that these are things that aren’t within anyone’s control.
The pandemic brought along a swath of problems that these BTO projects have to deal with.
For one, the closing of borders meant a manpower crunch in the construction industry and there was a complete halt of construction during Circuit Breaker.
Ongoing supply chain disruptions have not helped the situation either.
As most of us know, having limited resources and people at work means one of two things…
Missing the deadline or having to work overtime.
But despite Singapore’s construction workers putting in their best efforts, weather conditions have made it extremely tough and dangerous to work in as well.
Will HDB Compensate For BTO Delays?
Based on the contractual agreement between buyers and HDB, you will be compensated should the delay extend beyond a project’s Delivery Possession Date (DPD), which is the contractual date HDB is required to deliver possession of the new flat.
Under the COVID-19 (Temporary Measures) Act (COTMA), flat buyers whose flats are delayed beyond DPD can seek reimbursement for qualifying costs incurred for the period of delay, by submitting proof of out-of-pocket expenses incurred. The reimbursement amount is subject to the prescribed formula and capped at 70% of 10% of 60% of the new flat price for each year of delay
Source: Ministry of National Development
Since the latest round of delays for the Anchorvale Village BTO are well beyond the DPD of 31 January 2023,
HDB will pay a compensation sum of S$2,270 to S$6,360, depending on the length of the delay beyond DPD.
BTO Delay Compensations
| Anchorvale Village | Waterway Sunrise II | |
|---|---|---|
| Original completion date | Q1 2022 | Q1 - Q2 2021 |
| New completion date | May - July 2023 | Q4 2022 - Q1 2023 |
| Delay period | 14 - 19 months | 19 - 24 months |
| DPD | 31 January 2023 | 31 March - 30 June 2022 |
| Compensation amount | $2,270 - $6,360 | $700 - $10,500 |
| Delay period after DPD | 4 - 6 months | 3 - 12 months |
| Number of BTO units | 207 | 1,014 |
Out of the 98 BTO projects currently under construction, only two have incurred a delay of more than one year.
The reimbursements amounts will be paid in a lump-sum one-off payment and buyers will not need to submit any claims.
Many netizens have echoed that these compensations were simply not enough to offset costs of alternative housing such as renting a place.
A quick search on HDB’s website shows that a three-room HDB flat would cost about $1,780 – $2,300 per month.
Even if we were to take the highest compensation amount of $6,360 for a delay period after DPD for six months,
It would only offset $1,060 of rent per month.
However, there are also other forms of assistance available to those in urgent need of housing.
HDB has increased the stock of flats for rental under the Parenthood Provisional Housing Scheme (PPHS),
And will consider offering Interim Rental Housing (IRH) on a case-by-case basis.
Can I Cancel My BTO Order?
If you’re exploring other options due to BTO delays, there is an option for you to cancel without any penalties.
Afterthoughts
With ongoing supply chain disruptions and the aftermath of a pandemic, it is impressive that HDB has managed to complete even more projects in 2021 than the pre-COVID period.
Despite their efforts however, some BTO delays were inevitable.
That said, could more be done to aid those affected?
Perhaps.
As we try to manage our expectations given the situation, we can also start discussing how else we can better manage the current situation.
Have an opinion to share about the recent BTO delays? Head on over to the Seedly Community and discuss!
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