'Underwhelming' application rate in October BTO exercise as rules tightened for non-selection: Analysts
There were 1.6 applicants for each BTO flat on offer in October's exercise, the lowest application rate in years.
Artist's impression of 10-storey blocks at Tanglin Halt Cascadia with precinct facilities fronting the Rail Corridor bringing residents closer to nature. (Image: HDB)
- The application rate for Build-to-Order (BTO) flats in October's exercise was lower than launches in the past few years
- This is likely due to penalties being imposed on applicants who do not select a flat when invited to do so after balloting, said analysts
- There were higher application rates for five-room flats, as well as for projects in non-mature estates
SINGAPORE: Application rates for Build-to-Order (BTO) flats have dropped off significantly from previous sales exercises, after tighter rules for applicants kicked in for the October launch.
The final update at 2pm on Wednesday (Oct 11) on the Housing Board’s (HDB) website showed a total of 10,935 applicants for 6,800 flats on offer – an overall application rate of 1.6.
PropNex Realty CEO Ismail Gafoor called the application rate “underwhelming” compared with earlier launches.
The last time overall BTO application rates fell below two was in November 2017, when the application rate was 1.7 for the 4,829 flats launched then, said Mr Gafoor. Application rates for BTO launches over the last two years ranged from 2.5 to 8.1.
Analysts attributed this lack of enthusiasm to new rules penalising applicants who fail to select a flat when invited to do so.
Previously, applicants were penalised if they accumulated two non-selection counts, and were considered second-timers for a year during the balloting exercise.
From this launch, first-timers who fail to choose a flat once will be deemed second-timers for a year in the computer ballot.Â
Second-timers who accumulate one non-selection count, down from the previous two counts, will have to wait one year before they can apply for a flat again.
Under the new rules, first-timer families who have children aged 18 and below, or are married couples aged 40 and below, will get three ballot chances and enjoy higher priority in BTO and Sale of Balance exercises.
“The chief reason behind the lukewarm demand could be the penalties for non-selection of flats. Fearing being penalised, some applicants may have stayed out of this BTO exercise,” said Huttons’ senior director of data analytics Lee Sze Teck.
Analysts said another reason could be that applicants are holding out for December's BTO exercise, which includes flats in desirable locations such as Bishan and Bukit Merah.
October's launch featured BTO projects in the non-mature estates of Choa Chu Kang and Tengah, as well as projects in the mature estates of Kallang Whampoa and Queenstown.
Of the projects in mature estates, two are under the Prime Location Housing (PLH) scheme – Verandah @ Kallang and Tanglin Halt Cascadia.
PLH projects have a longer minimum occupation period of 10 years and a subsidy clawback when the first owners sell the flat.
While projects in mature estates tend to be more popular, in this launch, the application rates for projects in non-mature estates were higher, with Planation Edge I and Plantation Edge II projects in Tengah recording the highest application rates.
Mr Gafoor said that the warmer reception towards the Tengah BTO projects, with 1,010 units, is not surprising. The appeal lies in the availability of five-room flats and the projects’ shorter waiting times of about three years.Â
There were 971 applicants for 313 five-room flats in Tengah – an application rate of 3.1. In contrast, the application rate for four-room flats in the same projects was about 1.8.
“The projects are located right in front of the future Tengah Park MRT station on the Jurong Region Line which is slated to open in 2028,” he said.Â
“The Tengah BTO projects are also near several schools, including the future Pioneer Primary School, future ACS Primary, and a number of schools in the surrounding neighbourhoods in Jurong and Bukit Batok.”
The projects in Kallang Whampoa had an overall application rate of 1.4 for the 2,922 flats launched – lower than previous projects in the area.
The 973-unit Tanglin Halt Cascadia PLH project had an application rate of 1.2, which is “relatively muted” compared with past BTO projects in Queenstown, said Mr Gafoor.
Analysts also noted applicants’ preference for larger BTO flats. For example, in Tanglin Halt Cascadia, the application rate for three-room flats was 0.5 while that for four-room flats was 1.4.
“In all the eight BTO projects offered to HDB home buyers in this exercise, we noticed that the larger the flat, the greater the number of applicants,” said Mr Nicholas Mak, chief research officer at Mogul.sg.
Noting that there were no five-room flats on offer in mature estates, he said: “Home buyers who want five-room flats in the mature estates, maybe because they need the larger space, will have to buy from the HDB resale market and give this BTO exercise a miss.”
Two-room flexi flats also attracted higher demand than three- or four-room flats, with higher application rates for singles.
As in previous exercises, there is a wide gap between the application rates of second-timers and first-timers. First-time applicants are given priority in balloting.
The first-timer family application rates for four-room flats ranged from 0.9 to 1.1, while that of five-room flats was about 1.8 and that of three-room flats ranged from 0.2 to 0.9.
The second-timer family application rates for three-room and larger flat types ranged from 4.4 to 29.7.
“Many first-timer families who applied for most projects stand a high chance of securing a BTO flat,” said Mr Gafoor.
This BTO launch was pushed back from August after the results for the May BTO exercise were delayed due to system glitches.
