Housing Development Board Build HDB flats in advance (instead of build to order)
The Housing and Development Board introduced the Build to Order (BTO) system in 2001. 

The purpose of the BTO system was to make sure that there is sufficient demand for the HDB flats before construction starts. 

The waiting period for the BTO flats is 3 to 4 years. 

The BTO system has the following disadvantages:

a) When a couple decides to get married and apply for a HDB flat, they have to wait 3 to 4 years before they can start a family. Some couples may start earlier and stay with their parents, but many will wait for their flats to be ready.

b) To reduce the waiting time, many couples decide to get married before they are sure of their lifetime partners. This has led to a high rate of divorce. 60% of couples who married between 20 and 25 end in divorce.

I suggest that HDB revert to the previous system of building the flats based on projected demand. When the flats are near completion, they can be sold to people on the queue. If there is a steady supply of flats already under construction, the waiting time could be reduced to perhaps one year.

There is the risk that during a period of low demand, the flats may be unsold for a few years. This risk is small. With the strong demand for HDB flats, there should be a ready market of buyers at any time.

Being a monopoly of public housing, the market risk for the HDB is virtually nil.

Tan Kin Lian
 

Add Comment

---