Demand from first-time buyers down in BTO exercise

SINGAPORE — For the first time since May last year, there were more than enough new units to go around for first-time buyers in the latest Build-to-Order (BTO) exercise.

The drop in first-timer application rates from 1.4 in the previous exercise to 0.9 in the bidding that closed yesterday suggested the backlog for BTO units among this group has been cleared, said analysts, who also noted that some of these buyers might have turned to units under the Sale of Balance Flats (SBF).

The trend led one analyst to suggest that more flats could be allocated to second-timers and singles, although the bulk can be reserved for first-time buyers.

The latest BTO exercise is the third since National Development Minister Khaw Boon Wan announced in December that the Government would slow down the supply of new public flats from this year as supply and demand for public housing return to equilibrium.

Of the 3,071 BTO flats that went on sale in four projects in Bukit Batok and Woodlands for the latest exercise, demand for two- and three-room flats in Bukit Batok was lukewarm.

In comparison, four- and five-room units in the same estate were more popular, seeing 1.1 and 1.9 applicants per unit respectively.

Over in Woodlands, only four-room flats were vied for by more than one applicant.

Demand for two-room flats from unmarried buyers remained strong, although the overall application rate fell from 19.4 to 14.9. Units in Woodlands proved more popular than those in Bukit Batok — application rates were 17.5 and 13 respectively.

As for second-timers, demand eased to 1.7, from 3.3 in the previous exercise.

Meanwhile, the 3,383 leftover units on offer in 11 non-mature and 13 mature estates attracted 14,153 applicants.

In particular, one S2 Apartment at Pinnacle@Duxton was vied for by 223 house hunters. Five-room and executive flats in Tampines were also in hot demand, with 39 applications for each unit.

Analysts TODAY spoke to attributed the fall in first-timer BTO application rates to strong demand in the concurrent SBF exercise, as well as the clearing of the BTO queue for first-time buyers due to the ramped-up supply.

“Without the SBF exercise, we expect the application rates would revert to similar levels observed in the March 2014 BTO exercise,” said Mr Nicholas Mak, executive director of research and consultancy department at SLP International Property Consultants.

Describing the application rate of singles as dauntingly high, Mr Mak suggested that the Government carve out more units for this group, as well as for second-timers.

ERA key executive officer Eugene Lim also expects demand from singles to remain strong “for many more BTO exercises”.

On SBF flats, buyers are spoilt for choice as the flats are in a variety of locations and also in mature estates, said Mr Lim.

Mr Mak said the allocation ratio for SBF units — 95 per cent for first-timers — favours this group of buyers very generously and suggested that more can be made available to second-timers.

The latest exercise brings the total number of flats launched by the Housing and Development Board in the first half of the year to 13,091.

The next BTO launch will be held in July with 3,810 flats in Punggol, Sembawang, Toa Payoh, Woodlands and Yishun up for sale.