Help for Potential BTO Flat Owners Affected by COVID-19-related Construction Delays

2 Miss Cheryl Chan Wei Ling asked the Minister for National Development in view of the constant start/stop in construction works with the surge in number of COVID-19 cases (a) whether the previous estimated timelines of HDB BTO project completions are expected to be lengthened; and (b) if so, whether further help will be given to the affected flat owners.

3 Mr Seah Kian Peng asked the Minister for National Development given the continued high demand for BTO flats coupled with the delay in completion of various ongoing BTO projects, whether the Ministry will consider bringing forward various planned BTO projects or consider building more BTO flats than currently planned.

The Minister for National Development (Mr Desmond Lee): Mr Speaker, Members have shared concerns about the impact of the ongoing pandemic on our Housing and Development Board (HDB) Build-to-Order (BTO) supply, the progress of construction work and waiting times for ongoing projects. Let me address these concerns and set out what we are doing to keep our HDB BTO programme on track and to support affected homebuyers.

Mr Speaker: Minister, you are taking Question Nos 2 and 3 together?

Mr Desmond Lee: Yes, Mr Speaker, my apologies. If I may have your permission to take Question Nos 2 and 3 together?

Mr Speaker: Yes, please.

Mr Desmond Lee: Thank you. First, Mr Seah Kian Peng had asked if HDB will build more BTO flats or advance planned projects in view of demand. We recognise that demand for public housing has remained strong and that is why we had adjusted our supply. We had launched 14,600 flats in 2019. We increased that to 16,800 in 2020. We are on track to launch 17,000 BTO flats this year in 2021. Next year, we will increase the BTO flat supply even further and launch more than 17,000 flats. We are finalising the details and will announce our plans for 2022 when ready.

Second, there have been concerns over the waiting times for BTO flats, as raised by Miss Cheryl Chan. Some have said that waiting times have risen to six to seven years. That is not the case. Let me start with ongoing BTO projects. The average waiting time for ongoing BTO projects, including delays brought about by the pandemic, has remained between four and five years. Thus far, Government’s support and assistance measures have helped to keep the pandemic-induced delays to our BTO projects to a year or less, except for one project which had already experienced project difficulties unrelated to the pandemic. The total wait time for any given project has been kept under six years.

For BTO projects launched last year and this year, the estimated waiting times range from three to five and a half years. For example, Hougang Citrine launched in August is expected to be completed in three years. Alkaff Breeze in Bidadari launched in February has a wait time of just over three years. And Garden Court @ Tengah, launched last November, has a waiting time of about three and a half years.

There are some projects that will take longer, such as Queen’s Arc – launched in August this year – expected to take longer at about five and a half years. There are a few projects like Queen’s Arc, where the waiting times are longer. This is because the conditions of the site are difficult, and construction will take longer, or these are projects with very high storey-heights, very tall blocks, which require more construction time. These have caused some people to worry that all new BTOs will take six to seven years. But these are in the minority. By and large, barring further unexpected developments, most flat buyers can expect to move into their flats within four to five years after booking their flats.

Third, the recent news on Greatearth’s insolvency may have added to the anxieties of home buyers waiting for their flats to be completed and some are concerned whether this puts the completion of their homes at risk. To try to minimise the impact on home buyers, HDB has brought new contractors on board, within a month, to take over Greatearth’s affected projects. Unfortunately, this will still add a further two to three months' delay to affected projects, but we are working closely with the new contractors to bring the projects back on track. We are watching the progress of all BTO projects closely and have stepped up efforts to detect emerging issues earlier and resolve them.

Fourth, existing home buyers may be concerned about further delays to ongoing projects given the impact of COVID-19 on the construction industry. With tightened border controls over foreign workers, disruptions in the supply of building materials and stringent worksite public health measures, there have been manpower and material shortages and a slowdown in work, which have affected public and private construction projects.

To try to mitigate the pandemic’s impact on our public housing programme, HDB has rolled out extensive assistance to help contractors complete ongoing projects in a timely manner.

To tackle manpower shortages, HDB has worked with firms to safely recruit workers from various countries and co-shared the increase in manpower costs. HDB has also worked with contractors to explore ways to speed up construction without affecting safety and quality. To minimise work stoppages due to COVID-19 transmission, we have implemented Antigen Rapid Testing, or ART, on top of Rostered Routine Testing (RRT) at worksites. This allows members of the construction workforce who have been infected to be picked up and treated early, and close contacts quarantined swiftly. Worksites can then continue operating as long as workers are on the ART regime.

To help with the higher cost of materials, HDB has extended the period of protection against steel price fluctuation and supplied contractors with more concreting materials at protected prices. This is in addition to the extensive Government support provided through the Job Support Scheme (JSS), construction restart grants, legislative interventions, advance payments, sharing of prolongation costs and manpower cost increases, and foreign worker levy rebates.

While the pandemic has inevitably caused delays to both private and public sector construction projects, including BTO projects, we will continue to do our best to minimise the extent of the delays.

HDB has also taken steps to support affected home buyers. We have helped some flat buyers secure interim accommodation and will be increasing the supply of flats under the Parenthood Provisional Housing Scheme (PPHS) by 800 units over the next two years. For low-income households with no family support and no other housing options, HDB will consider offering Interim Rental Housing, or IRH on a case-by-case basis. Flat buyers who face delays that exceed their Delivery Possession Date, or DPD, will be compensated at the amount and for the period as set out in the COVID-19 (Temporary Measures) Act, or COTMA, which applies to all developers. We will also consider waiving flat booking forfeitures and the one-year wait-out period based on the flat buyers’ circumstances, such as for flat buyers who choose to cancel their BTO flats due to BTO delays and buy a resale flat to meet urgent housing needs.

Even amidst the ongoing pandemic, we are committed to delivering public housing to Singaporeans. With these measures, we will press on to keep our BTO programme on track and support buyers who may be affected by the delays.

Mr Speaker: Miss Cheryl Chan. No more than two supplementary questions, please.

Miss Cheryl Chan Wei Ling (East Coast): Thank you, Mr Speaker, just one. I want to thank the Minister for detailing all the measures that are put in place to ensure the BTO projects will continue in construction, and also to clarify the dates because I have heard a lot of feedback on this aspect.

The question I want to ask the Minister is, just now he mentioned that progressively there will be more BTOs that will be pushed out, even beyond 17,000 over time. Given the fact that there is also a very vibrant resale market currently, how is the Ministry going to balance between the resale market, just to make sure that the prices are still healthy, and also the future BTO flats in place?

Mr Desmond Lee: I thank the Member for the question. We continue to keep a close eye on the property market in general, both the private sector as well as the HDB resale market. There are a range of reasons why demand for housing is high.

First, of course, this is the Echo Boomer generation, family formation rates, marriage and the desire for housing and their own homes, is one.

Second, the pressures of the pandemic, work from home, changes that we have to adapt and adjust to, have caused people to want more space, in general. And so, both first-timers as well as even second-timers wanting a bigger place.

Thirdly, interest rates, being as low as they are, have enabled people to be able to consider housing options.

Then, the stresses and strains on the construction sector, the delays in both BTO as well as private housing projects, have caused some people who need homes to consider the resale market, both in the HDB resale as well as the private resale market for private properties.

And the social trends that have been taking place over the years and decades: the desire for more space for more privacy, for more nuclearised families, rather than three-generation families, more singles desiring their own homes and own spaces. These, of course, add on to the desire by people to have homes and exacerbated by this pandemic.

So, for the first-time home buyers, we will be pushing out even more BTO flats next year and in future years, to ensure that their housing needs are met. As I have said earlier, we will push out more than 17,000 flats next year, more than what we have launched or are going to launch this year.

At the same time, for the resale market, we have provided significant grants to help people afford homes in the resale market, if they need to. And for those who cannot wait longer for the BTO flats to move to a resale flat because of urgent family needs, we will consider their appeals for waiver of forfeiture for their BTO flats on a case-by-case basis and be sympathetic to their housing needs.

Mr Speaker: Mr Seah Kian Peng.

Mr Seah Kian Peng (Marine Parade): Sir, first I want to thank the Minister for the mitigating measures that will be introduced. I also welcome the news that there will be more flats that will be built in the coming years; the Minister mentioned more than 17,000. I am quite sure I am not alone in this House but many of us, each week, we continue to receive many requests and appeals from residents, telling us that they just cannot get their flat early enough; they cannot even have a chance of getting a flat.

I believe that the desired outcomes for all of us must be that we want to give couples their first flat as early as possible. So, we need to continue to shorten the waiting time. Four, five years – can it be shorter? Because there is really a lot of pent-up demand.

So, 17,000 now; my first request is, what is the maximum that we could go up to, in order to meet the pent-up demand? Because demand clearly outstrips supply right now. How can we shorten the waiting time?

There are also concerns by residents that whilst waiting for their flat, some of them, their income ceilings may exceed the limits and, therefore, they are disqualified. How do we deal with this?

Finally, again, another concern is that as they wait for the flat, the price of the flat will start to also go up. Their affordability level could be in question. So, my plea to the Minister is that – I do not have the figures obviously, but I am quite sure demand far outstrips supply – let us increase the supply as much as possible to reduce the waiting time and fulfil residents and couples' desire for a flat earlier rather than later.

Mr Desmond Lee: Indeed, the Member's points are well taken. As I said earlier, we will increase the supply of BTO flats next year, a number larger than the 17,000 we have launched this year. We have been increasing the BTO flats' supply for some years already. For example, in 2019, it was 14,600. Last year, it was 16,800. This year, 17,000. Next year, it will be more than that.

We balance that against the supply in the resale market. As I said, the demand is high for a whole variety of reasons. But we have to keep an eye on the overall ecosystem of housing, both public and private, BTOs and resale, to ensure that the overall housing ecosystem remain stable while meeting the aspirations of Singaporeans.

Mr Speaker: Mr Liang Eng Hwa.

Mr Liang Eng Hwa (Bukit Panjang): Thank you, Sir. Sir, the Minister in his reply mentioned about the PPHS earlier on, that young couples who are still waiting for the flats may want to consider PPHS. But from my indications, from the appeals that we have received, it seems that rental flats under PPHS are not so forthcoming and there is still some amount of waiting there as well. So, can I ask the Minister what is the availability of the rental flats under the PPHS scheme and whether there is enough to meet the demands or requests from new home buyers?

Mr Desmond Lee: The PPHS provides home buyers with an option if they wish to stay on their own before their flats are ready; these are for married couples especially with children. The demand for PPHS has grown significantly because of the pandemic arising from the BTO delays as well as the desire for more privacy and, therefore, while waiting for their flats, they want to get PPHS.

To make sure that we target the PPHS supply to those who need such housing because of their limited housing options, we made some moves in August this year to target such support to those with household income of below $7,000 and prioritising those with children. So, that way we hope to ensure that those with more urgent housing needs while waiting for their BTO flats can get support. For those with no family support and no housing options, we have other alternatives such as Interim Rental Housing (IRH). We continue to see how better we can support families who have been impacted by the delays during this period.

Mr Seah Kian Peng mentioned earlier, if I can take this opportunity to address him, he did ask a question that I omitted to reply, which is with regard to the income ceiling as well as those who may feel that with a longer wait for housing, the risk of them busting the income ceiling is there. We have made some changes to income ceiling in the last few years and continue to review the household incomes of home applicants to ensure that it meets the needs of Singaporeans.

And when people apply for the flats, they book their flats, they get the Housing Loan Eligibility (HLE) as well as their grant eligibility at the point of application. Therefore, the delays in waiting for flats that they have already booked, there will be less impact on that front.