Couple loses S$50,000 for breaking up after getting executive condo
Image of depressed woman sitting on the bed at home, illustrating a story on a couple losing money for breaking up after securing an executive condo.
A couple share their story of losing S$50,000 for breaking up after getting executive condo under HDB's fiance/fiancee scheme. (PHOTO: Getty) · Twenty47studio via Getty Images

SINGAPORE — Picture this: you are young and in love with your partner. You decide to commit to building a life together by buying a home.

After all, land is scarce, property prices can appreciate rapidly, and wait times for completion take years. Securing a Housing and Development Board (HDB) Build-To-Order (BTO) flat or Executive Condo (EC) unit early seems like the smart thing to do.

But not all relationships end with a "happily ever after", and in Singapore, breaking up can have serious financial consequences – especially when a joint application has been made for a public housing flat.

Such was the case for Jane Chang, who requested for her name to be changed, and her then-partner, whose break-up cost them a whopping S$50,000. The couple had been dating for 18 months before deciding to apply for an EC under the fiance/fiancee scheme. Securing a public housing unit under this scheme implies that a marriage proposal would come at some point before collecting the keys, as being legally married is a condition for eligibility.

Like many young Singaporean couples, the plan for them was to secure a flat and then get married before the completion of the unit, which was expected in four to five years. The couple also wanted to seize the opportunity to invest in what they thought was "a good, profitable buy" at the time, after considering the unit's pricing and the unit's location in Canberra.

At the time of application, Chang was 24 years old, and her ex-boyfriend was 26. Six months after signing the sales and purchase agreement, the relationship was over.

Speaking to Yahoo Finance Singapore, Chang said, "You think you know it all at that age, but actually you don't."

Getting cold feet

Buying a home triggered doubts for Chang. Did she really want to spend the rest of her life with her then-partner?

"It wasn't the fear of commitment. It was the fear of committing to this person. I realised that I didn't want to get married to him," said Chang.

While ECs are a hybrid of public and private housing, these units are subject to HDB eligibility conditions when first purchased. ECs cater to those who earn above the HDB income ceiling but are priced out from private condominiums. A 3-bedroom EC unit typically costs between S$800,000 and S$1.2 million.

Couples who apply for these units but break up before collecting the keys stand to lose a lot more than if it were a regular BTO flat. That's because EC units are priced higher than an average BTO flat (which generally does not exceed S$500,000 for a 3-bedroom unit) and are sold by private developers who reserve the right to forfeit a sum equal to five per cent of the sale price if the transaction does not go through.