SINGAPORE: There was “moderate to healthy” demand for Build-to-Order flats launched in Rochor under the new prime area housing model, property analysts noted on Wednesday (Nov 24), with about 10 applicants vying for each four-room flat.
A total of 6,976 applications were received for 680 four-room BTO flats in Rochor, data from the Housing Board (HDB) showed. Three-room flats in the area drew far less demand, with 867 applications for 280 units.
Applications for the November BTO launch closed at midnight on Tuesday, with HDB publishing the final number of applicants at 2pm on Wednesday.
These were the first flats launched under the recently announced Prime Location Public Housing (PLH) scheme. They come with a 6 per cent subsidy clawback upon resale of the homes and a 10-year minimum occupation period (MOP). Other restrictions include an income ceiling for future buyers of resale PLH flats.
Four-room flats in Rochor were the most popular in the latest BTO launch, and were 10.3 times oversubscribed.
But such flats were not the most in-demand BTO units this year, with flats in Bukit Merah and Hougang in earlier launches being far more popular.
Four-room flats in Bukit Merah, launched in May, were 49.6 times oversubscribed, while similar sized flats in Hougang, launched in August, were 24.9 times oversubscribed.
MOST POPULAR BTO LAUNCHES IN 2021
|Project||Flat type||Units available||Number of applicants||Rate||Launch|
|Bukit Merah (Telok Blangah Beacon)||4-room||70||3,474||49.6||May|
|Hougang Citrine/Kovan Wellspring||4-room||459||11,420||24.9||August|
|Jurong East (Toh Guan Grove)||4-room||240||3,628||15.1||August|
|Hougang Citrine/Kovan Wellspring||3-room||178||1,986||11.2||August|
|Rochor/Central (River Peaks I / II)||4-room||680||6,976||10.3||November|
|Toa Payoh (ParkEdge @ Bidadari/Alkaff Breeze)||5-room||323||3,193||9.9||February|
*Only three, four and five-room BTO flats. (Source: HDB)
Ms Christine Sun, senior vice president of research and analytics at OrangeTee & Tie, told CNA the subscription rate for a four-room flat in Rochor was “moderate to healthy”.
This rate may have been impacted by the long completion period of 71 months – nearly six years – and the longer MOP.
Some applicants like the “prestige of living” near the downtown core, and may want to own flats that can “potentially enjoy good price appreciation in the long term”.
“Others may like the novelty of the whole PLH model and wish to have the first-mover advantage of being the pioneer batch to own a PLH flat,” she added.
Mr Lee Sze Teck, senior director of research at Huttons Asia, said the “potential huge gains” upon resale may “far outweigh the restrictions” for those who applied for a flat in Rochor.
“As the policies for PLH flats may be reviewed in the future to stay relevant, some applicants may have applied to get a foot in first in case the policies are tightened,” Mr Lee told CNA.
“Future PLH flats will likely stay popular as buying a property is about location. A prime location will trump other factors.”
Four-room BTO flats in Rochor drew huge demand from second-timer families, with 104.7 applications per flat. In contrast, the application rate from first-timer applicants for such flats was 5.3.
Purchasing a non-PLH flat with a shorter construction time and MOP may be a “better option” for first-time couples in their late 20s who want to see capital gain from their flat, with a view to upgrading in future, said Mr Thomas Tan, chief operating officer of ERA Singapore.
“With the policy restrictions, PLH may well be more suited for second-timers (late 30s/early 40s) who will purchase it with a view to retire, with the convenience of a central location. This is probably the reason why the second-timer subscription rates are much higher,” he added.
“WAIT AND SEE”
Given that these were the first flats launched under the PLH model, some potential applicants might want to “wait and see”, said Mr Tan.
For couples, this is a “16-year decision”, with a six-year construction time and 10 years MOP.
Mr Ismail Gafoor, CEO of PropNex Realty said demand for four-room flats in Rochor fared better than “initial expectations”.
But he added that some applicants may have hesitated to apply, “probably due to the fear of the unknown” since the PLH model is a new policy.
Whether demand will rise or fall for future PLH flats, Ms Sun said it will depend on the location and supply of the flats.
“If there are more BTO flats launched in other mature estates, especially near MRT stations, then some demand may be drawn away from PLH flats,” she added.
Mr Ismail Gafoor said demand for future flats under the PLH model will depend on location and whether the policies, such as the 6 per cent clawback, might change.
“If all else remains the same, demand may likely increase for subsequent PLH flat launches,” he added.
“It is likely that those who hesitated to apply for this round’s exercise, (applicants) may follow suit to apply for subsequent launches seeing the strong demand in take-up for this round’s exercise.”