[Singapore] Build Ahead of Order

May 27, 2011

Artist impression of Costa Ris at Pasir Ris

One priority is to help young couples own their own homes as soon as possible, so that they can start their family and have babies. This is a national priority – promoting marriages and births – and MND must facilitate it to its best ability.

Currently, 70% of new couples get their first homes via HDB’s BTO (Build-to-Order) flats. The rest get theirs in the resale market. This is not bad, but I think there is scope to do more.

I think we should strive to have the vast majority of new couples start off their first set of homes in HDB, preferably via the BTO route. There are about 15,000 first marriages amongst Singaporeans a year.

HDB has ramped up BTO development, with monthly BTO launches totalling 22,000 flats this year. Indeed, the May BTO is launched today, offering close to 4,000 flats in Tampines, Punggol, Pasir Ris, and Woodlands.

Artist Impression of Tampines Greenleaf

I have told HDB to do more.

First, to tender as soon as architectural drawings and tender documents are ready. Currently, a tender is called only after 70% of orders have been confirmed; hence “build to order”. Given robust demand, I told them to proceed to build, knowing that the orders will definitely come. In other words, build ahead of demand, during this period of demand backlog. We can return to normal BTO approach, after we have stabilised the situation.

Second, to ramp up capacity at HDB, and to bring forward projects scheduled for early next year. For example, if we can bring forward the projects planned for the first quarter of 2012 by a couple of months, it will be helpful. HDB confirmed that it will be able to raise the number of BTO units from 22,000 to 25,000 units this year.

Third, for next year, we should sustain the new pace of building. As we intend to ease the $8,000 income ceiling on HDB flats, we can expect additional demand and we have to prepare for that.

But even as we ramp up the pace, we will ensure that the quality of finish, workmanship and worksite safety remain good. We must also ensure that the industry can rise to the challenge, without causing a cost spiral, which will not benefit the buyers.

Decades ago, HDB rose to the challenge of housing Singaporeans against a third world setting, and today, more than 80% of Singapore’s population are proud home owners.

With more resources and capabilities, I am confident HDB will rise to the new challenge of housing Singaporeans in a first world setting.

The task is huge, and expectations high. We will do our best not to disappoint. But we do need some time to work through the constraints. I plead with Singaporeans to bear with us.

Via: http://mndsingapore.wordpress.com/2011/05/27/build-ahead-of-order/