SINGAPORE: The response to the February launch of Build-To-Order (BTO) flats has been “measured” and this could be due to the less attractive locations of the developments in the non-mature estates, analysts said.
Buyers could also be “holding back” for the flats in mature estates coming up in the May launch, they added.
“Some potential BTO applicants will ‘save their bullets’ to apply for the next BTO projects,” said Mr Nicholas Mak, head of research and consultancy at ERA Realty Network.
Applications for 4,428 new flats in the latest BTO sales exercise ended at 11.59pm on Monday and the final results were updated at 2pm on Tuesday (Mar 7).
There were 16,993 applicants in all, resulting in an overall application rate of 3.8 times. For first-timer families, the application rate for three-room and larger flats ranged from 0.6 to 3.4, with most projects garnering 1.5 to 2 times the number of applicants for one flat.
For second-timer applicants, however, the rate went up as high as 45.7 for each four-room unit at Ulu Pandan Glades, a Prime Location Housing (PLH) project in Queenstown.
First-timers stand a better chance of snagging a flat as they have more ballot chances and up to 95 per cent of BTO flat supply is reserved for them.
CEO of PropNex Realty Ismail Gafoor said that the overall application rate is “quite measured” compared with recent BTO launches.
With the exception of the November 2022 launch, which posted an application rate of 2.5 times due to the bumper supply of 9,655 new flats on offer, the other three BTO launches in February, May and August 2022 had application rates of between 5.8 and 7.8 times.
Some analysts said that the less attractive locations of projects in the non-mature estates could have have been a factor this time round.
The location of Jurong West Crystal in this launch is not as attractive the previous Lakeside View BTO launched in May last year, said Mr Mak.
He added that Brickland Weave in Tengah is “at the edge of Tengah town”, and not within a comfortable walking distance to the nearest MRT station, which is still under construction.
Mr Lee Sze Teck, senior director of research at Huttons pointed out that the application rate for Brickland Weave was below the typical 3 times for BTOs in Tengah in 2022.
“The uncertainty over the 1km distance to ACS (Primary) may be another reason. Some buyers were probably holding out for the May 2023 Tengah BTO launch which is right next to ACS (Primary),” he said.
But the demand for the projects in mature estates remained high, said Mr Mak.
The most popular projects in this launch were Farrer Park Fields, a PLH project, and Rajah Summit in the mature estate of Kallang Whampoa. The application numbers for the two were combined.
Overall, the application rate for the three new BTO projects in the mature estates was 4.4 times. The overall subscription rate for previous comparable BTO projects in the same towns was 3.2 times.
“With the promise of more BTO supply to come, some buyers may want to wait for other projects that may better meet their needs,” said Mr Ismail, pointing to flats that will be launched in Bedok and Serangoon during the May 2023 BTO exercise.
The last time HDB launched a BTO project in Bedok was in November 2016 and for Serangoon, it was even longer ago, in January 2014, he said.
“We anticipate there’ll be pent-up demand for these upcoming flats in Bedok and Serangoon, as well as strong interest for five-room units there.”
Another reason was that a recent bump up in housing grants for eligible first-time buyers of resale flats may have diverted some demand away from the BTO exercise, analysts said.
During Budget 2023, it was announced that eligible first-time buyers would get up to S$30,000 more in grants for resale flats.
“Taken together, this suggests that the ramping up of BTO supply and measures to help first-timer families own their first homes is starting to work through the market, leading to a stabilisation of the application rates,” said Mr Ismail.
