BTO buyers will have to wait for more than what they expected due to the current border tightening measure imposed by the government, as an understandable answer to the effects of the pandemic. They will have to wait for a year or more before the turnover of their flats, what’s supposed to be 3 years of building time for BTO flats could now be delayed up to 5 years.
It is plain to see that citizens would want to tighten the border measures to keep the country safe for Covid-19 and to alleviate the impact it gave us, but as Singaporeans, we must also understand how this will affect our country and economy.
One of the visible effects of border tightening to the contractors is manpower shortage. Companies who wants to bring in workers from higher-risk countries will now face considerable delays in the waiting time for any entry approval that could be more than 6 months.
Now that we know, what’s causing the BTO turnover delay, what can we do now, and how does it affect our decision-making as a homeowner?
BTO Buyer
You have two options:
Wait or withdraw.
WAIT
If you choose to WAIT, one of your options as a BTO buyer is you can continue to go through the process and wait for the construction to be done.
Keep in mind, if you choose the first option, which is to wait for your BTO turnover no matter how long, you won’t be compensated for your waiting time or for the delay since the delay is caused by a worldwide situation. So, it is really up to you, the buyer whether or not you will continue with the purchase or not.
You won’t be paying anything either (aside from the deposit and stamp duties) as your BTO is being constructed, but bear in mind that what you are losing is time. Your normal waiting time before you collect the keys to your flat should be 3 years of building time, but now, it could be delayed up to 5 years. Not to mention, if you’re planning to sell it in the near future, you have to add another 5 years to that because of (MOP). That’s more or less 10 years!
WITHDRAW
Yes, you can WITHDRAW your purchase. This is the option that many young couples take. They decide not to wait for the property, give up their deposit and look for other alternatives like a resale HDB or even in the private sector. This is popular because the waiting time is shorter.
It’s because most of them see that the delay in their homes means the delay in their marriage and family planning as well.
First-time Buyer
Will you go buy a BTO or a resale flat? There’s really no direct answer as to whether you should buy a BTO or a resale HDB. Both types are good, what will affect your decision is what plans do you have in mind, based on your own situation, then you can decide what you will opt to.
Do take note of this, in a BTO HDB, since it’s a brand new unit, you are gaining the first-hand advantage because you’re buying the property at a subsidized rate. And if you are going for a resale HDB, chances are you are the second or third owner which means in terms of your profit, growth will be slower.
As mentioned above, BTO turnover has been delayed and most likely will take 5 years to be built. While in resale flats, you can have the keys in 3 months.
HDB owner
The situation will favor you especially if you already completed the MOP because, at the moment, you can sell your flat in the secondary market, the resale market which is actually booming. You can actually command better pricing in today’s sentiment.
So in today’s context, what we see is that with the delay in construction for the new properties, a good number of owners are actually going to the resale market.
Those who haven’t reached the MOP of their flats, won’t be able to take advantage of this since they have to always complete their 5 years MOP period before they can start selling their property.
The rise of buyers looking to the resale market could be a good opportunity for HDB owners whose property is more than 5 years old. This could be a good opportunity for them to sell their property and to upgrade themselves to a private property where they can actually command better pricing for their HDB.
In conclusion, we advise those buyers affected by these delays of construction to see the situation as a sign for them to explore other possibilities.
Perhaps there are other options for you to choose from than to wait for the 5 years building and construction of your BTO flat.
When you signed up for this HDB BTO, perhaps you’re thinking, this is the only way for you to have a home of your own, that this is your only option. Right now, because of the delay, it gives you more time to decide whether you should wait or should explore other possibilities in other segments of the market with a shorter turnover time. It may also help you plan your own family planning much more easily and systematically.
Reach out to us if you have more property-related questions and concerns. Will be glad to guide you step by step.
