Friday, April 1, 2011

What is Build To Order HDB?

The Build-To-Order (BTO) is a mode of sale offered by HDB (Housing Development Board) in Singapore in which flats are built after sufficient interest has been gathered from eligible buyers (65 percent or more). Otherwise, the project will be aborted. This is one of the three schemes HDB has. Others are Executive Condominiums (EC), Design, Build and Sell Scheme (DBSS).

With BTO, HDB announces sites for new flats and interested flat buyers submit their applications within the application period. After the application period is closed, HDB conducts a computer ballot to determine the queue position to book a flat. Once this queue is constructed, HDB invites applicants to book a flat. This exercise is followed by an assessment to determine whether to build the project or not. If HDB decides to go for the project, tenders are invited for the construction of the flats. After the flats are built they are handed over to their buyers.[1]

To buy a new HDB flat you must be a Singapore Citizen or your family nucleus must have at least another Singapore Citizen or Singapore Permanent Resident.[2] There are also income ceilings to buy flats directly from HDB for example, to be eligible to buy a 3 room flat in a non-mature town or estate, your gross monthly household income must not exceed $5,000 (applicable for sales launches from Feb 11 BTO).

Currently demand for BTO is very hot. For example two BTO projects in Jurong West and Sengkang were oversubscribed by seven times at the application closed date. There are 1527 flats in these two projects. This was even after HDB released details of 10 BTO projects expected to be offered in the next two months from April 2011 onwards.

Senkang Rivervale HDB apartments
One of the reasons BTO projects are hot is that they are cheaper than HDB resale flats. For example BTO flats are around 12 to 22 percent cheaper in Jurong West. [3] HDB offers 2 room, 3 room, 4 room and 5 room flats and it seems like 5 room flats (a living room + 4 rooms + kitchen) is the most popular flat type.

[1] - Build-To-Order (HDB)
[2] - Eligibility to buy new HDB flat
[3] - Hot demand for two BTO projects, The Straits Times

Related Articles:
What is an Executive Condominium (EC)?

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