Shorter waiting time: New class of flats likely to be popular, say analysts

Construction of HDB flats in Sengkang.
Construction of HDB flats in Sengkang. PHOTO: ST FILE

One Build-To-Order (BTO) site is in the far eastern side of Yishun, while the other two in Sengkang and Sembawang are several kilometres away from the nearest MRT stations and town centres.

But with a wait time of 2 1/2 years, compared with the current three- to four-year period, these Housing Board flats will likely be popular despite their relatively far-flung locations when they are offered for sale next year, property analysts told The Straits Times.

Chief executive officer of PropNex Realty Ismail Gafoor said: "We can expect 50 per cent more subscription for flats in these three sites (than in typical BTO flats in the same locations)."

He was reacting to HDB's announcement yesterday about the pioneer batch of BTO flats that home buyers can expect to get sooner.

A total of 1,000 units in the three sites will be launched next year, and be ready as soon as 2020.

ERA Realty key executive officer Eugene Lim explained that the unique attributes for this new class of BTO flats - shorter waits and higher priority for first-timer applicants - make them ideal for home buyers who need a flat quickly to start their families and are less picky about locations.

At least 95 per cent of the four-room or bigger flats will be set aside for first-timer applicants, up from the current quota of 85 per cent in non-mature estates.

"(The shorter wait times) would make them more attractive to prospective home owners who are not so particular and have more urgent housing needs," said Mr Lim. "Given their combination of affordability, shorter waiting time and higher probability of success, they are expected to be popular."

DOUBLE APPEAL

You now have a new category of BTO flats that are not only faster to complete, but come with HDB-contracted finishes that can put some private developers to shame. It is a big deal.

INTERNATIONAL PROPERTY ADVISOR CHIEF EXECUTIVE KU SWEE YONG

They will also come with floor finishes, internal doors and sanitary fittings, similar to those of current BTO buyers who pick these furnishings as an option under the Optional Component Scheme (OCS).

This will reduce the renovation works required and enable home buyers to move into their new flats sooner, HDB added.

Two-room Flexi flats, meant for elderly buyers, will continue to come with elderly fittings and furnishings.

 

The HDB statement said: "Home seekers who prefer the flexibility of choosing their desired finishes and fittings under the OCS can apply for other BTO projects with the typical waiting time."

But a shorter wait time could mean a possible premium in cost over typical BTO projects, though a HDB spokesman said the difference "is not likely to be significant".

International Property Advisor chief executive Ku Swee Yong said these subsidised BTO flats should be priced far lower than resale HDB flats, which is what most home buyers with an urgent need for flats would go for.

Mr Ku said: "You now have a new category of BTO flats that are not only faster to complete, but come with HDB-contracted finishes that can put some private developers to shame. It is a big deal."

Prospective BTO home buyers such as Mr Pooi Ching Kwek, 29, said they will be casting an eager eye over these units when they are offered for sale in the later half of next year.

The National University of Singapore researcher said: "I am willing to pay extra to move in faster, so long as there is no compromise to the infrastructure such as the recent lift and rubbish chute issues."

But he added that the shorter wait time might not be suitable for every young couple as it means less time saving up for marriage or renovation costs.

Tax auditor Cherish Goh, 26, said: "Personally, I think the current waiting time of four years is okay as it gives me more time to work and save up first before moving into the new flat."

A version of this article appeared in the print edition of The Straits Times on July 20, 2017, with the headline 'New class of flats 'likely to be popular''. Print Edition | Subscribe