BTO exercise: Fewer first-time applicants than flats offered

New HDB Build-To-Order (BTO) flats at Treegrove @ Woodlands. -- PHOTO: ST FILE
New HDB Build-To-Order (BTO) flats at Treegrove @ Woodlands. -- PHOTO: ST FILE

Higher demand from second-timers and singles

There were fewer first-timer applicants than flats available to them in the latest Build-To-Order (BTO) exercise offering units in Woodlands and Bukit Batok.

That means that most applicants looking for their first flat should be guaranteed one and will not have to ballot. At 5pm yesterday, there were overall 0.9 first-timers vying for each flat in the BTO exercise, which was set to close at midnight.

The last time the first-timer subscription rate fell below 1 was in last May's offer of BTO flats in Choa Chu Kang, Hougang, Jurong West, Sembawang, and Woodlands. The application rate then was 0.7 for first-timers.

PropNex Realty chief executive officer Mohamed Ismail Gafoor believes the slide in application rates could mean that supply is finally catching up with demand. The first-timer application rate dropped from 1.7 in January to 1.4 in March.

"First-timers have been very successful in the past few BTO exercises," said Mr Mohamed Ismail, who cautioned against having a glut of BTO flats for future exercises.

"Too much supply might bring down the value of the flats."

Analysts said the BTO application rates for second-timers and singles were much higher, at 1.7 and 14.9 respectively, with demand from singles continuing to remain strong.

Currently, second-timers are allocated 30 per cent of the flat supply of 2-room and 3-room BTO flats in non-mature towns like Bukit Batok and Woodlands. Singles who are first-timers get 30 per cent of the 2-room standard flat supply in these estates.

"There don't seem to be enough flats for them. Perhaps the Housing Board should relook its allocation quota, which now heavily favours first-timers," said SLP International Property Consultants head of research Nicholas Mak.

Some analysts added that the low take-up for the latest exercise, which involved 3,071 flats, is not entirely surprising given that some buyers would have been drawn to a Sale of Balance Flat (SBF) exercise, which was held concurrently.

These 3,383 flats, some located in popular mature estates such as Tampines and Clementi, can be moved into sooner than the BTO flats currently being offered.

One is a 46th floor, $769,000 unit at Pinnacle@Duxton, which was 223 times oversubscribed.

The overall application rate for the current SBF exercise including studio apartments stood at 4.2 at 5pm yesterday, compared to 2.0 for the BTO exercise. Said Mr Mak: "Whenever they couple BTO with SBF exercises, the application rate for BTO will drop."