News

Sengkang BTO Buyers Getting Compensation of Up to $10,500 for Completion Delay

2022-05-23 , 1:03 pm

While having delays here and there in life is never fun, especially in today’s fast-paced society, they unfortunately do happen from time to time.

And for the buyers of a Build-To-Order (BTO) project in Sengkang, it seems like they won’t be getting the keys to their units anytime near the expected date.

However, the Housing Development Board (HDB) has announced that they will be compensating buyers based on when they end up getting their keys, and hey, that’s not so bad, right?

Well, here’s what you need to know about that particular BTO project, as well as how HDB will be compensating the buyers.

Construction Work for Anchorvale Village in Sengkang Delayed (Again)

Currently, Anchorvale Village, a BTO project in Sengkang, has gone past the legal completion date.

When it was first launched in the market for sale back in November 2017, it was anticipated to be complete by the first quarter of 2022.

However, the construction process of Anchorvale Village proved to be much more challenging than that of other BTO projects, even the ones that have been delayed as well, and here’s why.

Location of BTO

Firstly, Anchorvale Village is integrated into a neighbourhood centre and is situated in a build-up site around other existing developments.

And in case you’re a westie or have no idea where Anchorvale Village is, it is located along Anchorvale Road, opposite Sengkang Riverside Park and Sengkang Sports Centre.

“The tight construction site and more complex design with the integration of commercial and residential components posed additional constraints and challenges,” HDB explained.

Delays Caused by COVID-19

In addition to that, the COVID-19 pandemic also resulted in several delays due to the stricter border rules and lack of manpower flowing in from other countries in South Asia. Malaysia’s movement control order impacted the pace of construction as well.

In order to aid with the challenges posed, HDB mentioned that it helped Ken-Pal, the construction company in charge of this BTO project, through various means throughout last year.

This included advance payments, co-sharing of costs, workforce recruitment and other measures.

“The project was able to make some headway between the end of 2021 and early 2022, and largely managed to keep to the progress milestones during those few months,” HDB added.

Weather Conditions This Year

While most of us probably enjoyed the much-welcomed rain back in March and April this year, the weather was worse news for those working on BTOs across Singapore.

Especially for those working on Anchorvale Village, as the project was in its superstructural phase at that time.

Which meant that the construction took place above ground level, and given the amount of rainfall in Singapore over the past few months, it’s not hard to see why the project ended up being delayed further.

“The pace of the precast lifting and installation works in this phase was significantly constrained by the tight construction area, which was surrounded by existing developments, with access restriction for heavy vehicles and equipment,” said HDB.

Taking all these delays into account, the total waiting time for the BTO units to be completed will last approximately 5.2 years, or about 62 months.

Current State of Anchorvale Village

The delivery possession date, which is the legal contractual date that HDB is required to hand the keys over to the unit owners, is on 31 January 2023.

HDB brought up that it carried out a “detailed evaluation” regarding the progress of the BTO project and its original timelines last month. It then concluded that the construction works will not be completed by the delivery possession date.

Right now, the completion of Anchorvale Village is predicted to be delayed for around four to six months, and construction is now slated to be complete from May to July 2023.

The project, which consists of 207 flexi and three-room units within two Housing Development Board (HDB) blocks, currently has 200 units that have already been booked by buyers.

According to The Straits Times, the unit owners were informed of the delays earlier this month through emails and letters that HDB distributed.

Value of Compensation

And here’s the part everyone’s been waiting for: How much the owners will receive.

Of course, the amount of compensation that unit owners will receive depends on when the construction of their specific unit is expected to be completed.

As for now, the homeowners-to-be who receive their keys in May 2023 will be issued compensation of anywhere between $2,270 and $4,240, while those who receive theirs in July 2023 will receive between $3,400 and $6,360.

Based on reports by The Straits Times, all affected buyers will receive the maximum reimbursement sum that they qualify for, and they will not need to submit any claims in order to redeem it.

Delays in Another BTO Project

And if you think that Anchorvale Village is the only BTO project that has run into such issues, you couldn’t be more wrong.

In fact, there was another BTO project that was unable to meet the delivery possession date even before Anchorvale Village.

Waterway Sunrise II, a BTO project in Punggol, first met difficulties in the construction process when its main contractor ended up getting involved in financial difficulties and ended up having to shut down its operations.

As of now, Waterway Sunrise II, which includes 1,014 two-room flexi, three-room and four-room units within seven blocks, is expected to finish its construction in around May to June this year, six to nine months after its initial delivery possession date.

Unit owners will receive compensation of between $700 to $10,500, and the average amount that each owner will receive is $5,000.

According to HDB, only Anchorvale Village and Waterway Sunrise II have had to delay their construction by more than one year. They are also the only two out of 98 current BTO projects to have exceeded their delivery possession date.

HDB also shared that the majority of delays for BTO projects last for six to 12 months after government support and assistance measures are implemented.

Unit Owners’ Reactions

According to interviews conducted by The Straits Times, there were homeowners who expected the delay in the construction work of Anchorvale Village.

26-year-old trade finance officer Jasmine Goh told The Straits Times that she bought a three-room unit with her fiancé and took note of the progress of the BTO project’s construction.

After discussing with another friend whose BTO also had the same completion period, the couple realised that the pace of Anchorvale Village’s construction was slower than that of other projects.

And even though they contemplated cancelling the purchase of their BTO flat due to the lengthy waiting time, they eventually decided not to as they are able to wait a little longer.

In the meantime, the couple has registered with HDB for a rental flat.

Impact of COVID-19 on the Construction Industry

While there is no doubt that most industries have faced difficulties due to the COVID-19 pandemic, the construction industry has been one of the industries that have struggled the most.

This is largely due to the greater costs and manpower shortages posed by COVID-19 border restrictions.

However, with the border rules in many countries being relaxed, many workers are able to enter Singapore, hence reducing the strain put on manpower in BTO sites.

Currently, almost all BTO sites are operating at almost their full capacity.

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Despite the improvement in terms of manpower, there are still other factors that may affect the price of raw materials and impact the global supply chain. These factors include the Ukraine-Russia conflict and the current COVID-19 outbreak in China.

“We’re monitoring these developments very closely and have been responding as appropriate to better support our contractors and suppliers,” HDB mentioned.

“With the improving Covid-19 situation and more positive outlook in the construction industry, HDB will strive to make further progress to minimise delays and deliver new BTO flats to buyers as soon as possible.”

As for the upcoming BTO projects, HDB announced previously that 5,300 BTO flats in towns such as Bukit Merah, Jurong West, Ghim Moh estate in Queenstown, Toa Payoh and Yishun will be launched for sale this month.