Early signs that BTO application rates have reduced and are stabilising: HDB

SINGAPORE: There are early indications that application rates for Build-to-Order (BTO) flats have "reduced and are stabilising", said the Housing and Development Board (HDB) on Monday (Mar 6), hours before the February sales exercise closes at the end of the day.

More than 4,400 new flats were launched for sale this round, spread across five projects in Kallang Whampoa, Queenstown, Jurong West and Tengah.

"The February 2023 sales launch also saw the lowest overall number of flat applicants, particularly first-timer applicants since the February 2020 BTO sales launch, with this number hovering around half of the number of flat applicants in some of the past 11 BTO sales launches," HDB said, referring to figures as of 11am on Monday.

For instance, a total of 12,493 applicants applied for three-room and bigger flats, of whom 7,513 were first-timers. In comparison, there were 20,252 applicants in February 2020, of whom 14,145 were first-timers, it added.

The median application rates for first-timer applicants for three-room and bigger flats is 1.8, said HDB. This is close to the application rate for the November 2022 BTO sales exercise, which had double the flat supply of this launch.  

The median application rates of 1.8 at the November 2022 launch and 2.0 at the February 2021 launch are the lowest in HDB’s quarterly sales launches in the past three years, said the agency.

FIRST-TIMERS STAND GOOD CHANCE OF SELECTING FLATS

First-timers who applied for BTO flats in the February exercise stand a good chance of being invited to book a unit, said HDB, based on figures as of 11am.

For three-room and bigger flats, all the five BTO projects across mature and non-mature estates have first-timer application rates of 1.7 or lower for one or more flat types - meaning that there were fewer than two applicants vying for each flat.

First-timer applicants have a better chance of securing a flat as they get two ballot chances instead of one, and up to 95 per cent of the flat supply is reserved for them.

For non-mature estates in particular, first-timers hoping to buy a home at Jurong West Crystal and Brickland Weave in Tengah stand a good chance of securing a flat. This is also the case for the prime location project Ulu Pandan Glades in Dover Forest, in the mature estate of Queenstown.

These projects have low application rates of between 0.2 and 1.8 across the various flat types in these two projects, said HDB, noting that the average rejection rate at the flat selection stage in the past is 40 per cent.

"Among these projects, successful applicants of Jurong West Crystal and Brickland Wave will also be able to move into their new homes earlier, as they have shorter waiting times of about 3.9 years (or 47 months) and four years (or 48 months) respectively," it added.

The exceptions, based on application rates published on HDB's website, are for four-room flats at Kallang Whampoa where there are two projects - Rajah Summit and prime location project Farrer Park Fields. There are more than 5,900 applicants thus far for the 1,422 flats on offer.    

The application rate for these flats is 2.9 for first-timers and 28.2 for second-timers.

BUYERS MAY BE WAITING FOR MORE ATTRACTIVE LAUNCHES: ANALYST

The lower number of applicants overall could be due to the less attractive location for BTO flats in non-mature estates, said Huttons' senior director of research Lee Sze Teck.

He noted that the Brickland Weave project in Tengah, for instance, is further from an MRT station. Another consideration is the location of ACS (Primary), which will move from Barker Road to Tengah and become a co-ed school from 2030.

"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)," Mr Lee said.

Some buyers may also be holding out for more attractive launches, he said, noting that in May, HDB will launch BTO flats in Bedok and Serangoon for the first time in about seven and nine years respectively.

In addition, the recent bump up in housing grants for eligible first-time buyers of resale flats may have diverted some demand away from the BTO exercise, Mr Lee added.

HDB said first-timers who have been unsuccessful in two or more attempts for BTO flats in the non-mature estates will be given an additional ballot chance at their subsequent application for a BTO flat in the non-mature estates.

"From our records, virtually all first-timer applicants of BTO flats in non-mature estates had a chance of booking a flat within their first three tries. In fact, about nine in 10 had a chance to book a flat within two tries," it added.