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Build HDB flats in advance of demand
20 Jul 2017 (348 views)

Singapore has a unique system of building public flats. It is called the BTO system. This is a stupid system, designed by a stupid goverment.
 
Why do I say so?
 
Under this system, the buyer must book the flat and wait for 3 1/2 years for the flat to be ready.
 
 
Why can't the HDB build the flats earlier, so that they will be ready for booking when the buyers need them, e.g. to get married?
 
Okay. The HDB does not want to take the risk of building flats that go empty. Is that so?
 
Surely, it is easy to predict the demand for flats and to build them early? Each year, there are 27,000 marriages. 80% will need a HDB flat. We need to build 20,000 flats a year. The remainder will be provided by private housing.
 
When a HDB owner upgrades to private housing, their flats will be available for resale. We also have to build flats for immigrants.
 
If the government builds 20,000 flats a year, it will surely be taken up. If there is a slow takeup rate due to economic recession or other factors, it will be temporary. It is all right to keep the flats vacant for one or two years. Private developers have to take this risk anyway.
 
We should start building more flats earlier in anticipation of demand. We should discontinue the "stupid" BTO system.


Build HDB flats in advance of demand
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Singapore has a unique system of building public flats. It is called the BTO system. This is a stupid system, designed by a stupid goverment.
 
Why do I say so?
 
Under this system, the buyer must book the flat and wait for 3 1/2 years for the flat to be ready.
 
 
Why can't the HDB build the flats earlier, so that they will be ready for booking when the buyers need them, e.g. to get married?
 
Okay. The HDB does not want to take the risk of building flats that go empty. Is that so?
 
Surely, it is easy to predict the demand for flats and to build them early? Each year, there are 27,000 marriages. 80% will need a HDB flat. We need to build 20,000 flats a year. The remainder will be provided by private housing.
 
When a HDB owner upgrades to private housing, their flats will be available for resale. We also have to build flats for immigrants.
 
If the government builds 20,000 flats a year, it will surely be taken up. If there is a slow takeup rate due to economic recession or other factors, it will be temporary. It is all right to keep the flats vacant for one or two years. Private developers have to take this risk anyway.
 
We should start building more flats earlier in anticipation of demand. We should discontinue the "stupid" BTO system.