EFFECT OF BUILD-TO-ORDER SYSTEM ON PUBLIC RESALE FLAT PRICES AND MARRIAGE RATES

Abstract

A family would necessitate a house, some even long for a home. In Singapore, where the government has made it their agenda to provide quality and affordable public housing for the masses. The Build-to-Order (BTO) system has been the final result of housing application procedures. As such it hopes to address the housing demand and supply by building as per the demand. These BTO flats have direct implications on marriage decisions as it is a requirement to be married before the couple is allowed to collect the key. In addition, the couple would be able to enjoy a multitude of grants and schemes to purchase their home. This BTO system has a pro-marriage directive and will impact married couples that are deciding to divorce. Once these flats completes the Minimum Occupancy Period (MOP), they are up for grabs in the secondary market. Based on the basic economic theory, this influx of housing supply into the resale market may lead to negative results for the resale prices of the flats in the vicinity.

Through this quantitative research, this paper hopes to bridge the gap between the two separate topics, and to quantify the exact impacts the BTO system has on marriage and divorce rates. This includes the impact it has had on the narrative of marriage, marriage choices as well as deciding to divorce. A home is integral decision for families, couples to make. Therefore, shifts in demographic trends and the decision of the masses is an important marker for assessment.

Finally, the study of the transaction prices through the difference-in-differences method to understand the real impact of the BTO flats in the vicinity. This study covers all regions of Singapore over ten different BTO and HDB clusters.