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Fewer BTO bookings cancelled last year but higher proportion of appeals for penalty waivers

02:47 Min
About 1,700 home buyers cancelled their Build-to-Order flat bookings in 2020, due to reasons including construction delays amid COVID-19. That is a more than 30 per cent drop from previous years, but a higher proportion is appealing to get their penalties waived. Natasha Razak reports.
  • There were fewer cancellations of Build-to-Order (BTO) flat bookings in 2020, compared to the annual average from 2018 and 2019.
  • Of the 1,700 cancellations last year, about 1,300 appealed to waive penalties.
  • HDB says it acceded to around one-third of these appeals in recent years.

SINGAPORE: When a 26-year-old, who only wanted to be known as Ms Lim, bid for a Build-to-Order (BTO) flat in 2017, luck was on her side.

She managed to get a four-room unit at Eunos Court – which, at the time, was among the most popular flats on offer.

But almost four years later, she is close to giving it up.

The flat was meant to be ready in the first quarter of 2022, but amid construction delays caused by the COVID-19 pandemic, that timeline has been pushed back by another year.

With the need for space for two growing kids, aged three and four, Ms Lim said she is seriously considering cancelling her flat booking to get a private resale apartment.

“We (my husband and I) work from home so it would be good if we could have individual rooms to work in too,” she said, adding that the family currently lives with her parents.

But a key factor in her decision is whether she will be able to avoid any penalties for the cancellation.

Typically, buyers who cancel their BTO flat bookings must either forfeit their option fee or 5 per cent of the flat purchase price, and wait for a year before they can apply for subsidised housing again.

These measures are in place to ensure that buyers are serious about their purchase, said the Housing and Development Board (HDB).

But HDB announced earlier this year that it would consider waiving these penalties, acknowledging that the delays in construction may have “caused inconvenience and disrupted the life plans of flat buyers”.

“For flat buyers who need to cancel their BTO flat booking to buy a resale flat due to urgent housing needs, we will consider waiving the cancellation forfeitures, taking into consideration their individual circumstances,” it said.


In response to CNA’s queries, HDB said that around 1,700 home buyers cancelled their BTO flat bookings in 2020.

This was lower than the annual average of 2,500 cancellations in 2018 and 2019, or 2,300 cancellations a year between 2010 and 2019, it noted.

The main reasons for cancellations included “a break-up of their fiance-fiancee relationship, a change in housing plans, or a change in financial circumstances which affected the flat purchase”, it said.

Specifically, out of the 1,700 cancellations last year, about 1,300 appealed to waive the penalties for cancellation – below the average 1,450 appeals received each year in 2018 and 2019, said HDB.

The Housing Board also said it acceded to around one-third of the appeals for waivers of cancellation forfeitures each year.

This is the outcome Ms Lim hopes to achieve should she cancel her booking – but she will first have to nail down some details.

The process requires her to provide the location of the new unit she intends to buy, along with plans on how the purchase will be financed, she said.

“But we are not able to provide this due to the current situation, where it’s very hard to go for house viewings … We haven’t been able to go around and source for a unit.”

Ms Lim added that she is not comfortable making an offer for another unit until she can be certain she can cancel the BTO flat and have the penalties waived for doing so – making it a “neither here nor there” situation.


Huttons Asia’s senior director of research Lee Sze Teck noted HDB did not provide information on when the cancelled flats were originally booked.

But he suggested that there could have been fewer cancellations last year as those affected by construction delays could have booked their flats from as early as 2016.

“These BTO projects in 2016 and 2017 are likely to be in advanced stages of construction and most contractors tend to deliver earlier than the stipulated delivery date. Hence these groups of buyers are affected to a lesser extent,” he said.

He added that HDB tapered the supply of BTO flats in 2018 and 2019, which could also have accounted for fewer cancellations in 2020.

PropNex CEO Ismail Gafoor suggested that many buyers may have chosen to stick with their BTO bookings last year due to a combination of pandemic-related factors.

“The BTO applicants who were thinking about switching over to HDB resale flats found it tough to do so owing to (viewing restrictions amid) the pandemic situation, as well as rising resale prices and increasing cash over valuation trend,” Mr Ismail said.

He also pointed out that while there were fewer cancellations last year, the proportion of those who appealed against the waivers increased from 58 per cent in 2018 and 2019, to 76.5 per cent in 2020.

“We are of the opinion that the delay in constructions of BTO flats and loss of jobs for some people during the pandemic could be the underlying reasons for the cancellations, hence the higher proportion of appeals,” said Mr Ismail.


Views were mixed on whether these cancellations would have a substantial impact on the resale market.

Mr Mark Yip, Huttons Asia’s CEO, said that “in normal circumstances”, the numbers may not have an impact, given that they are a small percentage of the entire year’s transaction volume.

“However, during this period where the construction delay-induced shift in demand is high, every single buyer who switches to the resale market adds to the competition.

“The HDB resale volume in 2021 is estimated to be between 27,000 and 29,000 units, the highest yearly transaction level since 2010,” he said.

On the other hand, Mr Ismail noted that “previous years have proven that even with higher volume of cancellations (2,300 to 2,500 per year), it did not hugely impact the resale market”.

He expects cancellations in 2021 to be “largely similar” to last year’s, given that resale prices are still rising.

At the same time, Mr Yip said "it is reasonable to expect more buyers to appeal in the coming months".

This is due to HDB’s recent public announcements that it may consider waiving cancellation penalties, coupled with the larger supply of BTO flats in 2020, he said.


The local construction industry remains one of the hardest-hit sectors in the ongoing pandemic, said HDB, adding that it is working with stakeholders to keep construction work on track.

In the meantime, it is also helping affected buyers who are unable to find alternative housing arrangements.

As of end-June, it has helped about 320 such households with interim rental housing, HDB said.

Source: CNA/cl(cy)